[Congressional Record Volume 157, Number 157 (Wednesday, October 19, 2011)]
[Senate]
[Pages S6766-S6767]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORNYN (for himself, Mr. Crapo, Mr. Rubio, Mrs. Hutchison, 
        and Mr. Burr):
  S. 1738. 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 2011. This legislation would repeal the 3.8 
percent surtax on investment income that was included in the Health 
Care Reconciliation Act of 2010 (P.L. 111-152, signed into law by the 
President last year. I am pleased that Senators Crapo, Rubio, 
Hutchison, and Burr are cosponsors of this legislation.
  We know that taxpayers will likely face the largest tax increase in 
history when the 2001 and 2003 tax relief acts expire at the end of 
2013. If Congress does nothing, the highest tax rate for individuals 
will rise from 35 percent to just under 40 percent; taxpayers in the 
lowest 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 aware of these expiring provisions, many 
are likely not fully aware of another unpleasant surprise that will 
arrive on the first day of 2013. The Health Care Reconciliation Act 
that was jammed through the Senate along partisan lines includes a 3.8 
percent surtax on the dividends, rents, and interest earned by certain 
taxpayers. Enacting this permanent tax hike was a mistake then and is a 
mistake now.
  The Institute for Research on the Economics of Taxation--a nonprofit 
economic policy research and educational organization recently told the 
Senate Finance Committee that the 3.8 percent surtax would reduce 
capital formation, which would lower productivity and wages and that a 
3.8 percent surtax would lower GDP by about 0.9 percent and would 
actually result in lower revenue coming into the government's coffers.
  Simply put, increasing taxes on investment income is a job killer and 
increases uncertainty at a time that the national unemployment is more 
than 9 percent. 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 in 2013. And dividends taxes would more than double to more 
than 43 percent.
  We should not pile more taxes on the backs of working families and 
job creators. This will not help create jobs and will not make the tax 
code more pro-growth. We know the key to job creation is to 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 2015 the 
economy will need to grow 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 six of my colleagues on the other side of the 
aisle supported my motion.
  Not only will the Economic Growth and Jobs Protection Act of 2011 
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 will protect 
economic growth, jobs and the retirement savings of taxpayers. Mr. 
President, I ask unanimous consent that the text of the bill and a 
letter of support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1738

       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 2011''.

     SEC. 2. REPEAL OF UNEARNED INCOME MEDICARE CONTRIBUTION.

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

                                              National Association


                                             of Manufacturers,

                                                 October 18, 2011.
     Hon. John Cornyn,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Cornyn: On behalf of the National Association 
     of Manufacturers (NAM)--the nation's largest industrial trade 
     association--thank you for your leadership in introducing 
     ``The Economic Growth and Jobs Protection Act of 2011,'' to 
     repeal the 3.8 percent surtax on ``investment income'' 
     currently scheduled to go into effect beginning in 2013. The 
     NAM strongly supports the passage of this legislation.
       As you know, the Health Care and Education Reconciliation 
     Act of 2010 (P.L. 111-152) imposes a new 3.8 percent surtax 
     on the dividends, rents and interest income earned by certain 
     taxpayers. This new surtax, if implemented, will discourage 
     savings and investment. If not repealed, this surtax will 
     come on top of increases on dividend taxes that are scheduled 
     to accelerate from today's current rate of 15 percent to a 
     top rate of 39.6 percent at the beginning of 2013. Combined 
     with this surtax, dividends taxes could more than double to a 
     total of 43.9 percent.
       Manufacturers strongly support the repeal of this 
     burdensome tax that would increase the tax on savings and 
     investment and reduce the amount of capital business owners 
     have available to invest in their companies. Such a tax will 
     ultimately result in the loss of vital funds needed for 
     business operations and job creation.
       Thank you for introducing this legislation. At this time 
     while our nation is working to emerge from recent economic 
     challenges,

[[Page S6767]]

     further increasing taxes on investment income is the wrong 
     approach and simply adds to a tax system that is already 
     anti-growth. We look forward to working with you and your 
     staff to advance this important legislation.
           Sincerely,
                                  Dorothy Coleman, Vice President,
                                Tax, Technology & Domestic Policy.
                                 ______