Make All Tax Reductions Retroactive

March 5, 2001

The Honorable David Dreier
Rules Committee
H-312 Capitol
Washington, DC 20515

Dear Mr. Chairman:

I am writing to urge all members of the Rules Committee to support a Rule making in order the amendment offered by Representatives Jeff Flake and Mike Pence on H.R. 3. Their amendment would make all of the tax-rate reductions included in H.R. 3 retroactive to January 1, 2001 rather than only applying retroactivity to the new, lowest rate as provided for in the Ways and Means Committee bill.

During the President’s recent address to the Congress he stated that, “I want to work with you to give our economy a jump-start by making tax relief retroactive.” He also said, “in my plan no one is targeted in or targeted out.” Selectively making only one of the several tax rate reductions retroactive violates both presidential requests and suspends the very-much needed reduction in the cost of capital investment in our sagging economy.

Since President Bush first formulated his tax plan more than a year and a half ago, circumstances have changed substantially. The economy has slowed dramatically with recession a real possibility, while budget surplus projections have more than doubled and appear all but impervious to a typical cyclical downturn. So, while there may be strong arguments for increasing the size and scope of the president’s tax rate reduction proposals, there is no good reason to put limits on them as the current Ways and Means Committee bill does.

The House deserves the opportunity to vote on the Flake-Pence amendment to make across-the-board tax rate reductions retroactive across-the-board. Therefore, I encourage the distinguished members of this committee to vote yes on the offered amendment making all tax-rate reductions contained in H.R. 3 retroactive to January 1, 2001.

Very sincerely yours,

Jack Kemp

cc: House Republican Members