[Congressional Record Volume 156, Number 118 (Thursday, August 5, 2010)]
[Senate]
[Pages S6887-S6888]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORNYN (for himself, Mr. Crapo, and Mr. Roberts):
  S. 3712. A bill to rescind the 3.8 percent tax on the investment 
income of the American people and to promote job creation and small 
businesses; to the Committee on Finance.
  Mr. CORNYN. Mr. President, today I am introducing the Economic Growth 
and Jobs Protection Act of 2010. This legislation would repeal the 3.8 
percent tax on investment income that was included in the Health Care 
Reconciliation Act of 2010, P.L. 111-152, signed into law by the 
President earlier this year. I am pleased that Senator Roberts and 
Senator Crapo are cosponsors of this legislation.
  We know that taxpayers already face the largest tax increase in 
history when the 2001 and 2003 tax relief expire at the end of the 
year. Unless Congress acts, in less than 150 days: the highest 
individual tax bracket will rise from 35 percent to just under 40 
percent; people in the lowest tax bracket will see a 50 percent tax 
increase, from 10 percent to 15 percent; the marriage penalty will 
increase; the child credit will be cut in half; and taxes on capital 
gains and dividends will increase. In other words, every taxpayer will 
pay higher taxes to Washington.
  But while taxpayers may be concerned about the upcoming tax shock, 
many may not be aware of another unpleasant surprise that will soon 
follow. The Health Care Reconciliation Act that was jammed through the 
Senate along partisan lines includes a $123 billion tax on the capital 
gains, dividends, rents, and interest earned by certain taxpayers. 
Enacting this permanent tax hike was a mistake then and is a mistake 
now. It will discourage savings and investment; it will reduce 
productivity and will depress wages and the standard of living for 
millions of Americans. According to the Institute for Research on the 
Economics of Taxation--a non-profit economic policy research and 
educational organization, 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 a 3.8 
percent investment tax.
  Simply put, increasing taxes on investment income is a job killer and 
increases uncertainty at a time that the Chairman of the Federal 
Reserve has told Congress that the economic outlook is ``unusually 
uncertain.'' 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. In fact, the top tax rate on 
capital gains will eventually be 23.8 percent as the rate bounces back 
to 20 percent from 15 percent. And the top tax rate for dividends will 
eventually rise to 43.4 percent.
  Why do we want to pile on the backs of working families and job 
creators with more taxes that do nothing to create jobs at a time that 
the national unemployment rate remains 9.5 percent and where in some 
States, such as Nevada, there is record unemployment? We know the key 
to job creation is to

[[Page S6888]]

grow the economy and allow small businesses to flourish, invest and 
create jobs.
  In fact, according to the Federal Reserve Bank of Boston, we will 
need several years of very strong growth to reach 5 percent 
unemployment. For example, to reach 5 percent unemployment by the end 
of 2013, the economy would need to average 5 percent per year. To reach 
5 percent unemployment by 2015 would still take growth of 4.2 percent a 
year. This is just one reason, that during the health care debate I 
offered a motion that would have directed the Senate Finance Committee 
to report the bill back without the 3.8 percent tax on the investment 
income. Although my attempt to strip out this job-killing tax fell 
short, I want to take this opportunity to note that 6 of my colleagues 
on the other side of the aisle supported my motion.
  Not only will this legislation protect jobs and the investment 
security of taxpayers, it will also make sure that Congress restores 
one of the President's campaign promises. On September 12, 2008, then-
candidate Obama promised the American people that, ``Everyone in 
America--everyone--will pay lower taxes than they would under the rates 
Bill Clinton had in the 1990s.'' But when combined with the President's 
budget proposal, this additional tax on investment will raise taxes on 
many Americans higher than they were under the rates President Clinton 
had in the 1990s.
  I ask that my colleagues support this legislation that will repeal 
this job-killing tax on small business investment, and thus will 
protect economic growth, jobs, and the retirement savings of taxpayers. 
Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3712

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Economic Growth and Jobs 
     Protection Act of 2010''.

     SEC. 2. REPEAL OF UNEARNED INCOME MEDICARE CONTRIBUTION.

       Section 1402 of the Health Care and Education 
     Reconciliation Act of 2010 (Public Law 111-152) and the 
     amendments made by such section are repealed.
                                 ______