WASHINGTONÃ¯Â¿Â½U.S. Sen. John Cornyn, R-Texas, today introduced the Economic Growth & Jobs Protection Act of 2010, legislation that would repeal the harmful tax on investment income that was included in the Democrats' health care law.
Sen. Cornyn's bill is cosponsored by Sens. Mike Crapo, R-Idaho, and Pat Roberts, R-Kansas.
During debate on the Health Care Reconciliation Act in March, Sen. Cornyn offered an amendment to remove the 3.8 percent tax on the savings and investments earned by certain taxpayers on a variety of investments, but the measure was defeated and the new investment tax remained in the bill, which was ultimately signed into law.
"This is an onerous investment tax that will land directly on the backs of small businesses and those who are saving for their retirement. It was a bad idea when it was slipped into the health care bill earlier this year, and it's an even worse idea today as millions of Americans continue to look for work.
"I hope my Democratic colleagues who supported this proposal previously will urge others to join us in opposing this tax increase on savings and investment that will impair job creation, capital formation, and small business expansion. As our nation's number-one job creators, small businesses cannot afford another misguided policy to stand in the way of their financial recovery."
Background on Sen. Cornyn's legislation:
-It would repeal the 3.8 percent tax that was included in the Health Care Reconciliation Act.
-This $123 billion tax (over seven years) will soon be imposed on capital gains, dividends, rents and interest earned by taxpayers.
-This permanent tax hike will discourage savings and investment; it will reduce productivity; and it will depress wages and the standard of livings for millions of Americans.
-Taxpayers, including small businesses, are already scheduled to get hit with the largest tax increase in history in less than 160 days if Congress fails to act and maintain current tax policy.
-According to a forecast by the Institute for Research on the Economics of Taxation, a 2.9 percent tax would depress economic growth by 1.3 percent and reduce capital formation by 3.4 percent. The damage on job and economic growth would be even greater from the new tax on investment.