Washington, D.C. – U.S. Senator Mike Enzi, R-Wyo., and Senate colleagues worked late into the night to pass a job growth package that Enzi believes would put money back into the pockets of taxpayers and provide much needed resources for businesses to draw on in order to create more jobs for those who need them.
The Senate voted 51-49 to pass the Jobs and Economic Growth bill, S. 1054,Thursday night. Enzi supported the bill which stemmed from the fiscal year 2004 budget resolution. In the resolution, the Senate Finance Committee was directed to complete an economic growth plan limited to $350 billion.
"This bill is an economic growth package that should stimulate the market and start providing jobs," said Enzi, a member of the Senate Budget Committee. "The Finance Committee faced a tough problem. They had to find a way to provide real economic growth without busting the budgetary constraints set forth by Congress last month. I believe they came up with a workable compromise that will provide some, if not all, of the relief necessary to encourage investment by individuals and corporations and create jobs."
Small Businesses Benefit
Enzi was particularly pleased with two provisions regarding small business and agriculture that would encourage economic growth.
One provision would increase the allowable amount for small business expensing from $25,000 to $100,000, which Enzi said could directly benefit America's 22.4 million small businesses.
Another provision would repeal the Special Occupational Tax and extend the applicable period for a taxpayer to replace livestock sold because of drought, flood, or other weather-related conditions.
"These provisions mean thousands and thousands of employers will have more money to reinvest in their company, hire more people, and create more jobs. That means putting more Americans back to work," said Enzi.
Investment Encouraged
Vice President Dick Cheney cast the deciding vote on an amendment that would eliminate taxes on investor stock dividends that are paid out of already-taxed corporate income. Enzi supported the amendment, which passed 51-50.
"It's a fairness issue. I've heard from many Wyomingites, many of them seniors, who put money in the stock market. They don't want to pay tax on dividends that the company has already paid tax on. It gives people less to invest," said Enzi. "This bill gives people more to invest and this helps our economy as a whole."
The dividend proposal would exclude 50 percent of dividend income from taxes in 2003 and 100 percent in 2004 through 2006. After 2006, all dividend income would be taxable again.
Disproportionate Share Hospitals (DSH)
The growth package also includes a provision based on a bill Enzi cosponsored that would increase DSH allotments to extremely low DSH states. DSH funding is allocated to each state to help cover some of the cost of hospital services for those hospitals that serve a large number of uninsured, Medicaid or indigent patients.
Enzi's amendment would allow states with DSH expenditures less than 3 percent of the state's total Medicaid spending to increase their federal DSH allotment to 3 percent of total Medicaid spending. This could provide an additional $7.3 million in Medicaid funding to Wyoming hospitals in fiscal year 2004, based on projected Medicaid expenditures. Wyoming's hospitals could receive an additional $37.1 million over the next five years, and over the next 10 years, the additional funding could total $68.3 million.
Homeland investment
Enzi supported an amendment offered by John Ensign, R-Nev., that would encourage American companies to reinvest their earnings from foreign subsidiaries back into the U.S. The Senate agreed to add the measure to the growth package. The amendment would lower a toll tax on dividends from foreign subsidiaries from 35 to 5.25 percent. Enzi was an original cosponsor of a similar bill earlier this year.
The Joint Committee on Taxation has estimated the economic benefits of the amendment could bring into the U.S. an additional $135 billion of foreign earnings the year following its enactment.
A written statement by Enzi that will appear in the Congressional Record follows.
Statement of Senator Mike Enzi
S. 1054, the Jobs and Economic Growth Bill
May 14, 2003
Once again we have a challenging task before us. We have to draw a roadmap that will lead to economic growth, development and future sustainability. We have to come up with a package that is fair to all taxpayers. One that eliminates complexity instead of creating more of it. Unfortunately, this is much easier said than done. So far, we've all been talking about it. In fact, as I've listened to my colleagues speak throughout the day, I've been struck by the unusual tenor of this debate. We have Democrats claiming they want to eliminate tax increases and Republicans saying we need to use tax increases to offset other provisions. While I have serious reservations about voting for a package that appears to rob Peter to pay Paul, I believe the Finance Committee has crafted a bill that will lead to the creation of new jobs. And, that's what this debate should be about.
In April, the number of unemployed people in this country rose to 8.8 million. 8.8 million! That's 8.8 million Americans without jobs and without paychecks - but still with plenty of bills to pay. That kind of economic chaos sends ripples throughout the economy. It affects more and more people until we do something to stop it. Until we take action to stem and control the problem so that the economy can regain its strength.
The strength of our economy lies in our workforce, so we have to put into place a plan for growth that will actually encourage the creation of new jobs. I think this plan is a good step toward that goal, and I believe the tax relief provided in this plan will put money back into the pockets of taxpayers and provide much needed resources for businesses to draw on in order to create more jobs for those who need them.
That's what I would like to talk about for a moment - the employers, the small business owners, the entrepreneurs. I am a strong supporter of the President's dividend proposal, and I am extremely disappointed we've been forced to reduce it in the Senate. I would hope we could eventually reach an agreement here and with our colleagues in the House to restore that proposal.
Nearly every week, I go back to Wyoming, and small business owners and local residents from around my state want to talk about the unfairness of our tax policy when it comes to the double-taxation of dividends. In fact, I have a stack of over three hundred letters from constituents representing different age groups and different income levels supporting the full elimination of the double taxation on dividends.
Although some of my colleagues continue to misrepresent to the American people that this provision would only help the rich, I think it's important to remind everyone that families, single people, married couples, college students, working mothers, single dads, senior citizens, and everybody in between are all unfairly burdened by the loss of spendable cash that results from the double taxation of dividends. We should not be surprised by that. After all, it is not just corporate executives who receive dividends.
If we eliminate the double-taxation on dividends we will put money back into the pockets of hardworking taxpayers, and we will also create jobs for working Americans across the country. Studies have shown that the President's dividend proposal could create as many as 400,000 new jobs. That would provide enough jobs for over four-fifths of Wyoming's population. That's a lot of jobs.
I would prefer we pass a dividend proposal that completely eliminates this unfair double taxation, but I understand why my colleagues on the Finance Committee had to come up with a new dividend plan. They were faced with a tough problem - staying within the budgetary constraints set forth by Congress while still providing real, economic growth. I believe they came up with a workable compromise that will provide some, if not all, of the relief necessary to encourage short and long-term investment by individuals and corporations. Under this plan, individuals will have more money to reinvest in their portfolio, and companies will be more likely to use equity financing to fund future growth.
Other important components of this bill are the small business and agricultural provisions, as well as the section that will increase the allowable amount for small business expensing from $25,000 to $75,000. Small business is truly the backbone of our economy, the engine that makes it go, and we have to create an environment that encourages rather than discourages growth. As corporations struggle to meet income projections and cost reductions, small businesses are the ones providing jobs and putting food on the tables for our working families.
As many as 22.4 million small businesses could directly benefit from provisions like the increase in small business expensing. Other employers will benefit from provisions like the repeal of the Special Occupational Tax and the extension of the applicable period for a taxpayer to replace livestock sold on account of drought, flood, or other weather-related conditions. These provisions mean thousands and thousands of employers will have more money to reinvest in their company, hire more people, and create more jobs. That means putting more Americans back to work.
This package should be about jobs; and I support the tax relief provisions, because I think they will create the jobs that will increase the flow of revenues that will bring this economy out of its current slump.
However, I want to make it clear that I am concerned about the high number of revenue provisions that are included in the bill. An economic growth package should not simply shift the tax burden from one person to another. That's not the way to create a more fair tax system. Despite my concerns, I will vote for this package because we need an economic growth package now. I encourage my colleagues to join me in supporting this plan to put more Americans back to work and help our families get back on their feet again.
