The "American Option" Stimulus

The U.S. Senate is now debating a “stimulus package.” Senators will be voting on amendments from all Members, which contrasts with the restrictive debate that the House political leadership imposed when they advanced their stimulus bill last week.

Many different ideas and alternatives are coming forth in the Senate. Last week, for example, Senator Jim DeMint (R-SC) unveiled what he calls the “American Option” stimulus plan – one focused on bringing tax certainty and relief to small business owners and all taxpayers.

As Senator DeMint describes the option, it would “defuse the 2011 tax bomb” by stopping tax increases that will hit small business owners and taxpayers in 2011. Specifically, the bill:

• PERMANENTLY REPEALS the Alternative Minimum Tax (AMT) – “once and for all.”

• Maintains the 15% capital gains and dividend rate – permanently.

• Permanently kills the death tax for estates under $5 million, and cuts the tax rate to 15% for those above.

• Permanently extends the $1,000-per-child tax credit.

• Permanently repeals the marriage tax penalty.

• Would permanently simplify itemized deductions to include only home mortgage interest and charitable deductions.

In addition, the bill proposed to:

• Lower the top marginal income rate for small businesses from 35% to 25%.

• Simplify the tax code to include only two other brackets – 15% and 10%.

• Lower the corporate tax rate from 35% to 25%.

On his website (www.demint.senate.gov) Senator DeMint goes into greater detail about the “American Option” plan. He also summarizes the major flaws connected with massive spending in both the House and Senate plans. As he points out, the “de-stimulus” approach currently making its way through Congress would:

• Cost taxpayers $1.2 trillion -- the largest spending bill ever enacted by Congress.

• Create over $10,000 in debt for each American family to be paid back in higher taxes for generations.

• 80 percent of the spending will not occur until 2010 or later.

• Joint Committee on Taxation staff testified that no jobs could be guaranteed to be created under the Democrat plan.

Wow, that last point is pretty amazing. An economic stimulus plan is supposed to stimulate economic activity – and I think that includes job creation. At least that is what the American public seems to be expecting.

Karen Kerrigan, President & CEO