The House Republicans Propose A Stimulus Alternative

There is no pride of authorship, President-elect Barack Obama said last week. His economic team is open to and all ideas, regardless of progenitor.

So -- the Republican Study Committee in the House has come out with an all-tax, no spending variant.

They'd cut marginal income tax rates across the board by five percent, increase the child tax credit to $5000, make the 15% capital gains and dividends tax rate permanent, repeal the AMT on individuals, repeal the law requiring mandatory withdrawals from IRAs and 401Ks for seniors; make all IRA and 401(k) withdrawals penalty free during 2009.  (Obama agrees with this last idea.)

For businesses and entrepreneurs, they'd allow businesses to either fully deduct the cost of their new assets from their tax returns;  they'd cut the top corporate tax rate bracket by ten percentage points; end the capital gains tax on inflation; extend the "carryback" period for operating losses to seven years. (Obama wants this extended back five years.)

There's be no "trillion dollar spending spree" -- "not one penny" of new spending. "Borrowing from one part of the economy and redistributing it to others will not grow the economy." Indeed, they'd cut one percent of discretionary spending across the board -- exclusive, of course, DoD and veterans benefits.