September 27th, 2007
Washington, DC - Congressman Ron Paul has introduced legislation that would ease the tax burden on some of America ’s hardest workers – those in the service industry.
The Tax Free Tips Act of 2007 H.R. 3664 would exempt tips and gratuities from federal income and payroll taxes. Tips often compose a substantial portion of the earnings of waiters, waitresses, and other service-sector employees. However, unlike regular wages, a service-sector employee usually has no guarantee of, or legal right to, a tip. Instead, the amount of a tip usually depends on how well an employee satisfies a client. Since the amount of taxes one pays increases along with the size of tip, taxing tips punishes workers for doing a superior job!
Not only that, but the IRS estimates how much in tips an employee should have received and taxes them based on that, whether they actually received that amount or not. This should stop.
“Many service-sector employers are young people trying to make money to pay for their education, or single parents struggling to provide for their children. Oftentimes, these workers work two jobs in hopes of making a better life for themselves and their families. The Tax Free Tips Act gives these hard-working Americans an immediate pay raise. People may use this pay raise to devote more resources to their children’s, or their own, education, or to save for a home, retirement, or to start their own businesses,” stated Congressman Paul.
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September 26th, 2007
Madame Speaker, I rise to help millions of working Americans by introducing the Tax Free Tips Act. As the title suggests, this legislation makes tips exempt from federal income and payroll taxes. Tips often compose a substantial portion of the earnings of waiters, waitresses, and other service-sector employees. However, unlike regular wages, a service-sector employee usually has no guarantee of, or legal right to, a tip. Instead, the amount of a tip usually depends on how well an employee satisfies a client. Since the amount of taxes one pays increases along with the size of tip, taxing tips punishes workers for doing a superior job!
Many service-sector employers are young people trying to make money to pay for their education, or single parents struggling to provide for their children. Oftentimes, these workers work two jobs in hopes of making a better life for themselves and their families. The Tax Free Tips Act gives these hard-working Americans an immediate pay raise. People may use this pay raise to devote more resources to their children’s, or their own, education, or to save for a home, retirement, or to start their own businesses.
Helping Americans improve themselves by reducing their taxes will make our country stronger. I, therefore, hope all my colleges will join me in cosponsoring the Tax Free Tips Act.
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September 20th, 2007
Mr. Chairman, the situation facing us now in the mortgage industry has its roots in the Federal Reserve’s inflationary monetary policy. Without addressing the roots of the current crisis, any measures undertaken to improve the situation will be doomed to fail.
As with asset bubbles and investment manias in past history, the fuel for the current housing bubble had its origins in monetary manipulation. The housing boom was caused by the Federal Reserve’s policy resulting in artificially low interest rates. Consumers, misled by low interest rates, were looking to consume, while homebuilders saw the low interest rates as a signal to build, and build they did.
One of the primary means the Federal Reserve uses to stimulate the economy is manipulation of the federal funds rate and the discount rates, which are used as benchmark rates throughout the economy. The interest rate is the price of time, as the value of a dollar today and the value of a dollar one year from now are not the same. Just like any price in the market, interest rates have an important informational signaling purpose. Government price fixing of the interest rate has the same deleterious effects as price controls in other areas.
Reduction in the interest rate has two major effects: it encourages consumption over saving; and it makes long-term, capital-intensive projects cheaper to undertake. Under Chairman Greenspan’s tenure, the federal funds rate was so low that the real interest rate (that is the nominal interest rate minus inflation) was negative. With a negative real interest rate, someone who saves money will literally lose the value of that money.
The Federal Reserve continued and still continues to increase the money supply. After ceasing the publication of M3 last February, private economists have calculated that M3 has risen at an annual rate of almost 12%, which is faster than we have seen since the 1970’s.
Millions of Americans now find themselves stuck in a financial quandary that is not their fault. The result of manipulation of the interest rate, money supply, and mortgage markets are the recently popped housing bubble.
Further regulation of the banking sector, of mortgage brokers, mortgage lenders, or credit rating agencies will fail to improve the current situation, and will do nothing to prevent future real estate bubbles. Any proposed solutions which fail to take into account the economic intervention that laid the ground for the bubble are merely window dressing, and will not ease the suffering of millions of American homeowners. I urge my colleagues to strike at the root of the problem and address the Federal Reserve’s inflationary monetary policy.
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September 12th, 2007
Washington, DC - Congressman Ron Paul has signed on as a cosponsor of legislation that would ease the tax burden on America ’s parents, struggling with child care expenses.
The Right Start Child Care and Education Act of 2007 is a comprehensive reform that increases the existing child care tax credit to $5,000 (from $2,400) for the first child and $10,000 for the second. It also increases the current business tax credit for providing child care services at work from $150,000 a year to $225,000. And it creates the “Right Start Child Care Professional” tax credit to encourage college graduates to choose child care as a profession.
Between the income tax, sales tax, property tax, gas tax, capital gains tax, the cost of regulatory compliance and various licenses and fees, an average of 52% of national income goes to government in one form or another. According to Americans for Prosperity, Texans work more than half the year just to pay for government.
The Dependent and Child Care Tax Credit has been increased only once in the last 25 years. Yet, inflation and child care costs are on the rise and have become the next largest expense after mortgage or rent for most families with young children.
“With a mountain of taxes to pay, having one parent stay at home is no longer a viable option for many Americans. The least the government can do for parents making these difficult decisions is to ease the tax burden on them and make it more economical for places of employment to provide on-site child care. Repealing all income taxes is my ultimate goal, but this bill, which allows American parents to keep more of their own money, is a step in the right direction.” Stated Congressman Paul.
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September 6th, 2007
Washington , DC . Congressman Ron Paul took action today to shield American homeowners from an outrageously unfair IRS tax policy by cosponsoring The Mortgage Cancellation Relief Act.
H.R. 1876 bars the IRS from considering partial mortgage forgiveness as income subject to taxation.
Under current law, only two categories of individuals pay taxes when selling their principle residence: those who have been able to realize a capital gain of more than $250,000 ($500,000 on a joint return) and those who lose the equity in their home and are forced to pay taxes if the lender forgives some portion of the mortgage debt.
“In these difficult times with the credit crunch and housing market downturn, some homeowners are finding it more and more difficult to avoid foreclosure and stay in their homes. If the bank allows a homeowner leeway and renegotiates with them in lieu of foreclosure, the IRS should not victimize the homeowner for doing the best they can to pay their debt.” Stated Congressman Paul.
Now is not the time to increase the tax burden on struggling homeowners. Strict reins must be put on the IRS by Congress to limit as much as possible the damage it does to the taxpayer and to the American dream.
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September 4th, 2007
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Congressman Paul’s Statement in Opposition to H.Res. 552<br />
Madame Speaker, I rise in opposition to H.Res. 552, “Calling on the Government of the People’s Republic of China to remove barriers to United States financial services firms doing business in China.”
Attempting to force the hand of the Chinese government by requiring them to open their markets to US financial services firms is akin to playing with fire. Politicians today fail to realize just how deeply our profligate fiscal and monetary policies of the past three decades have left us in debt to China. The Chinese government holds over one trillion dollars in reserves, leaving the future of the dollar highly vulnerable to the continued Chinese demand.
While I am in favor of unencumbered free trade, free trade cannot be enforced through threats or by resorting to international protectionist organizations such as the WTO.Even if the Chinese are recalcitrant in opening up their markets, it is not the role of the United States government to lecture the Chinese government on what it should or should not do in its own economy.
H.Res. 552 is a blatant encroachment on the sovereignty of the Chinese government. Were the Chinese government to pressure us into allowing greater access to the US market for Chinese financial services firms, or to pressure us into allowing the sale of firms in strategic sectors of the market, we would justifiably resist this pressure.
Diplomatic efforts cannot work through blustering language and vague retaliatory threats. It requires an awareness both of the many benefits of trade with China and the fact that our current trade imbalances are largely the responsibility of our trade policies.We must understand that China is not a 98-pound weakling who can be bossed around. If we treat other countries with respect and as equal partners, we might be pleased to find that our requests receive a more attentive ear.
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