Isakson Criticizes Elimination of Expanded Tax Credit for Homebuyers

Votes Against $3.56 Trillion Budget Resolution

U.S. Senator Johnny Isakson, R-Ga., today criticized House-Senate conference negotiators for the Fiscal Year 2010 Budget Resolution for removing language authored by Isakson that would have provided for a $15,000 tax credit to individuals who purchase a home in the next year. Isakson voted against final passage of the $3.56 trillion Budget Resolution, which passed by a vote of 53 to 43.

It was the second time this year that a House-Senate conference committee has deleted Isakson’s expanded $15,000 homebuyer tax credit after it had won overwhelming approval by the Senate.

“I would like to thank the Senate for its wisdom in adopting the $15,000 credit, express my deep disappointment in the conference committee for dropping it and encourage our president and the leadership of our country to give a second thought to what this credit could do,” Isakson said. “The greatest stimulus in the world is not a gift of money. It is an incentive for American families to invest and restore confidence in the United States economy.”

On April 1, the Senate unanimously passed Isakson’s amendment to the Fiscal Year 2010 Budget Resolution that would have created a deficit-neutral reserve fund to provide for a $15,000 nonrefundable federal income tax credit for the purchase of a principal residence during a one-year period. It would also have ensured that there was room available in the Fiscal Year 2010 budget for a homebuyer tax credit to be passed at a later date.

On Feb. 4, 2009, the Senate unanimously approved an amendment by Isakson to the economic stimulus bill would have provided a direct tax credit to any homebuyer who purchases any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. During conference negotiations between the House and Senate on the final version of that bill, Isakson’s $15,000 tax credit for all purchasers of any home was removed. Instead, House and Senate negotiators made only small modifications to the first-time homebuyer tax credit that was enacted in 2008 as part of the Housing and Economic Recovery Act of 2008.

Isakson has pushed hard for a non-repayable tax credit for homebuyers because he knows that it will work. In the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction. Interest rates rose, the economy slowed and America was left with a three-year supply of vacant homes. Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson, who was in the real estate industry in Atlanta at the time, says the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

Senator Chuck Grassley (R-IA) Delivers Weekly Republican Address

"I'm Senator Chuck Grassley of Iowa. I serve as the senior Republican on the Senate Finance Committee, which handles all tax legislation.

"The President of the United States has the pleasure of leading the country in the best of times, but the responsibility for digging us out of the worst.

"He has to govern in the present and build confidence for the future.

"Right now, Americans need jobs. They want Washington to fix only what it can, without destroying opportunities for the next generation.

"The President's programs don't connect all the dots.

"His plans fail to recognize that Americans are not an endless source of tax dollars to pay for government spending.

"The President's proposed budget raises taxes. For the vast majority of people who earn less than $200,000, raising taxes on higher earners might not sound so bad.

"Yet a lot of small businesses are in that category. The landscaper or the general contractor with a dozen employees could land in the bull's eye.

"Tell these business owners their taxes will go up. Odds are, they'll cut spending. They'll cancel orders for new equipment, cut health insurance for their employees, stop hiring, and lay people off.

"These small businesses happen to create 74 percent of all new private sector jobs in the United States.

"Meanwhile, the President's budget includes a tax increase on more than half of small businesses with 20 or more employees. Businesses of that size account for two-thirds of the small business workforce. The tax increase is equal to 20 percent of the marginal tax rate paid by those small businesses.

"Ask people what number of jobs they're willing to sacrifice right now. To a person, they'll tell you zero.

"The Administration also wants to cut the tax deduction for giving to charity. Even the Tax Policy Center, a left-leaning think tank, says this would mean $9 billion less for philanthropy.

"The Administration's proposal to reduce the carbon production could amount to an average hidden tax increase of around $3,000 per household a year. In effect it's a national sales tax on energy.

"All of these tax increases would be the biggest tax increase in history.

"That's not all: Even if every one of these tax increases goes on the books, this budget still nearly triples the national debt by 2019.

"The President and his allies in Congress want to spend too much, tax too much, and borrow too much.

"Somebody has to pay -- if not the middle class now, then later. Eventually the middle class gets hit.

"Meanwhile, if taxes get too high, people drop out of the workforce and pay less taxes.

"So higher taxes don't bring in more money.

"Government spending is a pretty inefficient way to create jobs anyway. Economists say the new stimulus bill will cost $787 billion to create or save 2.5 million jobs -- one million fewer than promoted by the Administration and congressional supporters. It amounts to $315,000 for each job created or saved.

"It's very simple. The government doesn't create wealth. It expends wealth.

"No wonder then the public is skeptical about Washington trying to fix the economy with one massive spending bill after another. It's hard to convince taxpayers that more deficit spending is the answer.

"There's evidence that the President and his people understand this, even if their budget doesn't show it. They say they don't want to raise taxes until 2011 because the economy is too weak.

"Well, if the President admits that tax increases hurt the economy, that will be true in two years as it is true today. Americans need leadership, and they need confidence now. They need their President and their elected representatives to connect all the dots. Jobs are hard-won. The government should first, do no harm. Thank you for listening."

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Americans wisely turning against stimulus plan

By Lynn Westmoreland

It seems like every other day an old friend or business partner calls to let me know that they’re declaring bankruptcy or going out of business.

We can all agree that the United States needs a federal stimulus plan to give our crippled economy a jolt. Our economy shrank 3.8 percent in the last quarter. Jobless claims have mushroomed to 626,000. Stock portfolios and retirement plans have lost 30 percent or more of their values.

But Americans have figured out that the $816 billion plan that passed the House with no Republican votes carries as much danger to the republic as it does hope. In fact, polls show support rapidly declining; today, just 37 percent of Americans favor the current stimulus legislation, down from 45 percent just two weeks ago. That’s startling, considering that Americans are increasingly nervous about huge job losses, business failures and home foreclosures.

Americans are turning against the bill because they know we can craft a much better bill that will simultaneously cost less and create more jobs.

But first, let’s discuss the price tag. The House-passed version totals $816 billion. Once you factor in the finance charges on borrowing that money, the total crests over $1 trillion.

It’s almost useless to discuss a trillion-dollar figure because it’s a number we can’t really comprehend. We’re more likely to get incensed by the government wasting $25,000 than $25,000,000,000 because one number we can understand and the other one is basically inconceivable. This is a problem.

One way to put this in perspective is comparisons. Liberals have complained for years over the cost of the wars in Iraq and Afghanistan. Well, Nancy Pelosi’s stimulus bill costs more than both those wars combined. Put another way, if you spent $1 million every day since the day that Jesus was born, you would have spent less than this one piece of legislation appropriates.

Even without this new spending, the federal deficit would top $1 trillion and our debt has soared to $11 trillion. This has real-world consequences. We risk further devaluing our currency and scaring off foreign investors who have seen Uncle Sam as a “safe” place to keep their money.

The Democrats’ stimulus plan focuses more on fulfilling liberals’ pent-up wish list over the eight years than it does with creating or saving jobs. In Georgia, we desperately need transportation infrastructure but spending on those job-creating projects is only 6 percent of the bill.

Instead, the bill spends hundreds of millions and often billions on items such as facelifts for national parks, buying new cars for the federal fleet and repairing federal buildings. Those may all be great but won’t stimulate the economy. Plus, we’re setting a dangerous precedent by spending billions to bail out states’ Medicare and Medicaid shortfalls; I fear this will become a permanent expectation.

Republicans are offering an alternative plan that reduces spending, allows families and businesses to keep more of their own money and actually creates MORE jobs than the Democratic plan. The Republican plan lowers tax rates for individuals, families and small businesses; it removes taxes from unemployment income and extends that insurance for a year.

The GOP plan would pan out better for Georgia, too. The House Ways and Means Committee estimates the Republican plan would create 186,000 jobs in our state while the Democrat plan would yield only 113,000.

In a survey sent to 3rd District constituents in my e-newsletter (sign up at www.house.gov/westmoreland), respondents preferred the taxpayer-friendly Republican version by a 9-1 margin. I know my district is more conservative than most, but the rest of the United States is moving toward our position of more timely, targeted and fiscally responsible stimulus.

Lynn Westmoreland (R-Grantville) represents Georgia’s 3rd Congressional District.
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Sen. Seabaugh Appointed to Senate Local Tax Collection Study Committee

State Senator Mitch Seabaugh (R-Sharpsburg) has recently been appointed by Lieutenant Governor Casey Cagle to serve as a member on the Senate Local Sales Tax Collection Study Committee. Sen. Seabaugh will work with a group of eight committee members, consisting of fellow legislators and local officials from across Georgia to examine the tax collection rates of cities and counties.

“As costs are sharply rising throughout the economy, many families and individuals are struggling financially,” Sen. Seabaugh said. “My goal for this study committee is to find ways for local governments to cut costs to taxpayers by allowing them to choose how their taxes are collected.”

Currently under Georgia law, the state revenue commissioner collects local sales and use taxes on behalf of cities and counties, and subsequently charges them one percent of the amount collected, regardless of the total cost of collection. The study committee will look for ways for local governments to individually determine how their taxes will be collected, so that they could be charged a lower rate than the one percent charged by the state.

“Senator Seabaugh will be a valuable asset to the Local Sales Tax Study Committee,” said Lt. Gov. Cagle. “He is dedicated to his constituents and has worked diligently in the Senate. I look forward to learning more about the findings of this study committee.”

Governor Announces Healthcare Reform to Insure More Georgians

1/30/08 Georgia Governor Sonny Perdue announced in a press conference today his support of health insurance reform legislation that will be filed by Senator Judson Hill and Representative Mickey Channell . The legislation will insure more Georgia citizens by expanding the availability and affordability of High Deductible Health Plans and Health Care Savings Accounts in Georgia.

“Insuring more Georgia citizens is our goal with this reform legislation,” said Governor Sonny Perdue. “More insured citizens means lower costs for all taxpayers, and preventative care means a healthier population. This legislation will incentivize small business owners to provide low cost health insurance to employees and their families.”

“This is a market-based solution focused on empowering individuals and rewarding them for making healthy choices. This plan will make affordable health insurance more accessible for the uninsured and working families,” said Senator Hill. “I have been working on this issue for years with various health care leaders, so I greatly appreciate the Governor's leadership that will make policy ideas a policy reality for our families.”

“This legislation makes a real difference for Georgia’s families and would make quality, affordable healthcare coverage affordable for nearly half a million Georgians,” said Representative Mickey Channell. “By harnessing the power of the free market, we’ll see more Georgians able to purchase and maintain their own healthcare coverage.”

A High Deductible Health Plan (HDHP) is a health insurance plan that offers consumers lower premiums and higher deductibles than a traditional health plan. A Health Savings Account (HSA) allows consumers to set aside funds for future qualified medical health expenses on a tax-free basis.

The health insurance reform legislation announced today has several provisions to make HDHPs paired with HSAs more affordable and available in the Georgia insurance market. The legislation will incentivize small businesses to provide HDHPs with HSAs. According to the Center for Health Transformation, approximately 500,000 Georgians could become insured if the reform legislation is passed through the 2008 Georgia General Assembly.

Provisions of the health insurance reform legislation include:

Insurance Regulation Changes:

Rebates for Behavior Modifications: Allows for rebates for consumers who have HDHPs with HSAs when they make behavior modifications, such as smoking cessation, weight loss or controlling diabetes and blood pressure. The rebate could be deposited into the consumer’s HSA or be demonstrated through a lower deductible.

Reduced Restrictions on Reimbursements to Non-Preferred Providers: Gives flexibility to insurance companies to reimburse at lower rates when a patient chooses an out-of-network provider. This flexibility allows the insurance company to offer lower premiums to the consumer.

Remove Restrictions on Health Reimbursement Arrangements (HRA): HRAs are arrangements that allow an employer to reimburse an employee for certain medical expenses. This legislation would allow companies that provide HRAs to reimburse employees using pre-tax dollars.

Premium Tax Exemption:

Currently HDHPs are subject to state and local premium taxes. This legislation would remove state and local premium taxes in Georgia, saving consumers $11.4 million in 2009 in state tax savings alone.

Income Tax Deduction:

Allows consumers to deduct HDHP premiums from state income taxes, if they are not already deducting premiums from federal income taxes. This would apply to consumers who purchase an HDHP insurance plan as an individual, or through an employer.

Small Business Tax Credit:

Allows employers with 50 employees or less to take a tax credit of $250 per employee that enrolls in a HDHP through a Section 125 plan.

In August 2007 Governor Perdue unveiled the Health Insurance Partnership (HIP), a program that incentivizes small businesses to provide health insurance to employees under 300 percent of the poverty level by sharing the costs between the employee, employer and the state and federal government. The regulatory and tax proposals announced today compliment the HIP program by stretching state and federal dollars further, resulting in more insured Georgia citizens.

Governor Perdue also recognized the efforts of Senator Hill and Representative Channell to bring together the Georgia Hospital Association, Medical Association of Georgia, Georgia Health Underwriters Association and the Center for Health Transformation to put together the ideas that he endorsed today.