May 24, 2010

House bill would eliminate federal income tax on first $35K of all Americans’ earnings

Filed under: Uncategorized — Greg in cheeseland @ 8:21 am

A bill was introduced in the House last week that would eliminate the federal income tax on the first $35,000 of all Americans’ earnings. The bill proposes to compensate for the loss in revenue by cutting $159 billion in supplemental war funding.

H.R. 5353, known as the War is Making You Poor Act, is sponsored by Florida congressman Alan Grayson (D-8th District). The bill is co-sponsored by Reps. John Conyers (D-MI), Walter Jones (R-NC), Dennis Kucinich (D-OH), Barbara Lee (D-CA), Ron Paul (R-TX) and Lynn Woolsey (D-CA).

In a speech on the House floor on May 20, Grayson stated that the bill would do three things. Firstly, it forces the pentagon to pay for the wars out of the $549 billion already allocated in the defense budget. Secondly, it enables 90% of the savings from $159 billion in supplemental war spending to cover the cost of a tax cut that would make the first $35K of every Americans’ income ($70K for married couples) free from federal income tax. Thirdly, it ultimately reduces federal spending and the deficit because the remaining 10% would be applied to that, and rather than borrowing money to pay for wars that have no financial return of investment, the money saved by taxpayers can be spent to help stimulate the economy.

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