Jobs and Growth Relief Reconciliation Act of 2003
The main aim of this paper is to convince the New York state senator to propose changes and reinstate the Jobs and Growth Relief Reconciliation Act of 2003. This was a law that was introduced and sponsored to the congress by Thomas William M. on the 27th of February 2003. The bill-Tax cut bill- was then put under consideration by the House Ways and Means committee and later passed from the lower house on the 9th of May 2003. It was later on approved and passed by the United States of America Senate on 15th May 2003. The joint conference committee reported this bill on May 23rd, that same year and the bill was agreed in the house on the same date. It was later signed into law by the then president of the United States of America, George Bush, on 28th May 2003.
This law which included; capitals gains, estate taxes, cash dividends and individual rates was scheduled to be in force only up to 31st December 2010 unless further legislation was made to make it permanent. However, the law was never changed and, therefore, was removed on January 1st 2011.This paper proposes to the senator that, this particular law should be reinstated and changed to make it permanent to benefit the majority of American citizens. This is considering the fact that, the cost of living in the whole world has escalated and with the tough economic times still on. Most Americans will benefit from the capital gains, dividends and individual rates that are provided for in the law and Growth Tax Relief Reconciliation Act (JGTRRA).
Other provisions in the JGTRRA included; increasing changes in federal taxes that had been passed in the year 2001 in the Economic Growth and Tax Relief Reconciliation Act of 2003. It also reduced the amount of tax on capital gains and dividends and increased the amount that a particular individual was exempted as the Alternative Minimum Taxes. Alternative Minimum Tax is the least amount of income that is to be taxed on an individual. These were laws that if made permanent would be of great benefit to most investors since they would be optimistic about investing more in financial markets because of the advantages of the lower taxes on dividends as well as capital gains from their respective companies.
The higher amount that was considered for exemption for minimum taxation would also benefit the increasing number of the poor and lower job classes in America as it will give most of them more spending power which will improve their living standards. It will also benefit the nation since more expenditure by the public means increased trade activities which increase revenues collected by both the local, state and federal governments.
The Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) increased the rate in percentages that items could be depreciated as well as the amount taxpayers were willing to expense according to section 179. This made it possible for taxpayers to deduct the whole cost of an item from their own income even without depreciating the amount given. This was a very big incentive to all the business owners who could carry out their businesses with the hope gaining realistic returns on their investments even with the tough economic environments that we are going through as a nation, despite being the world’s largest economy. It will also increase the economic growth rate which has been on a slide in the last couple of years.
This particular law was also responsible for the faster rate of implementation of other tax laws that had been passed in 2001. Maximum decreases in the tax rates, that had initially been planned to be put into force in the year 2006, were immediately enacted to be in use in the tax year of 2003. It also led to the increase in child tax credit to the level of 2010. Other changes saw the marriage penalty reliefs increased to the 2009 level, as well as, increasing the threshold where alternative minimum tax was applied. These are the radical changes that kept the American economy afloat during the economic depression in 2008. These are the laws that should be made permanent so as to keep the economy prepared in case the tough times persist. This law will continue creating jobs for the unemployed Americans since it aims at creating jobs, enhancing economic growth and providing tax reliefs. In the last one year, many big companies sent a portion of its labor force parking; this was after JGTRRA was discarded by the government. This shows that the JGTRRA was playing a big role in ensuring that most Americans maintain their jobs as well as creating more job opportunities.
Job-creation legislation would probably be the most important thing that the American people need today. The number of the unemployed citizens has been on the rise due to the increasing number of people losing jobs and the higher rate of population increase as a result of births, immigration and dual citizens. Such a law would definitely prevent this nation from falling into further economic and financial crisis as it will prevent more government expenses on catering for the unemployed population as well as reducing the rate of crime and other dangers that emanate from unemployment. This should be a priority for the senate as it may be disastrous in the long run. The job creation issue will be a key issue in the presidential elections this year and should be addressed as early as now so as to avoid it from being a campaign strategy by some politicians.
The JGTRRA was also aimed at enhancing economic growth and economic development. It successfully created a friendly environment for the essential activities for economic growth. These include; individual tax reliefs, higher minimum tax, lower taxes on dividends and capital gains. However, to pass such effective laws that can catapult an economy to high economic levels, and then give it a deadline, will be ineffective. This law should be brought back into force as soon as possible to help this nation through these tough times without imposing a deadline. The senator should take this proposal to the congress as early as in the congress’ next session so as to change that law’s terms to make it a permanent law. This will boost the growth and expansion of the economy through creating more jobs, improving the taxation system used by the revenue authorities as well as creating a friendly atmosphere for business for all citizens and investors though the incentives provided for in this law.
References
Alexander, K., & Alexander, M. D. (2005). American public school law (6, illustrated ed.). London: Cengage Learning.
United States Government Printing Office. (2003, May 23). JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT OF 2003. Retrieved January 17, 2012, from http://www.taxpolicycenter.org: http://www.taxpolicycenter.org/legislation/upload/JGTRRA-2003.pdf
