House RSC Wants New Tax Cuts

While Senate Democrats continue to argue that the best recession antidote is to pass legislation aimed directly at the housing market’s woes, Republicans are offering an alternative, albeit an unsurprising one: a second dose of stimulus via tax relief for “job creators,” i.e. businesses.

The conservative Republican Study Committee is pushing a package, dubbed the “Economic Growth Act of 2008,” of permanent business tax incentives. This includes immediately cutting the top corporate income tax rate to 25 percent from 35 percent, allowing all firms to deduct costs of assets in the year they’re purchased (“immediately expense” in tax talk) and lowering corporate capital gains rate to 15 percent from 35 percent.

“History shows us that the best way to provide an economic turnaround, preserve jobs and spur economic growth is to ensure that job creators face a lower tax and regulatory burden,” the RSC argues.

President Bush struck a similar theme in his press conference today, telling reporters Congress could alleviate the current uncertainty by making his 2001 and 2003 tax cuts permanent.

He criticized the housing bill Senate Democratic leaders are pushing as a bailout for Wall Street rather than a helping hand to struggling homeowners. His administration has promised to veto the legislation in its current form. Bush also brushed off the continuing discussion among Democrats and various industry lobbyists that there needs to be a second stimulus package.

“Why don't we let stimulus package one, which seemed like a good idea at the time, have a chance to kick in?” Bush said.

Senate Majority Leader Harry Reid (D-Nev.) told reporters Wednesday that he plans to work on at least one other stimulus package that could include Dem priorities such as extending unemployment insurance.

But they made a deliberate decision to move a housing-only measure first “because that is the engine that is driving the economy down.”

Lobbying sources say a cloture vote to proceed to the housing legislation is expected this evening. It remains unclear if its sponsors have collected the 60 votes they need to overcome this first procedural hurdle.