September 15, 1999

The Honorable William Jefferson Clinton

President of the United States

The White House

1600 Pennsylvania Avenue

Washington, DC 20500

Dear Mr. President,

Walking down the street in any American town it is clear that small business is the engine that drives the American economy. However, as Congress has seen and heard from small business owners across the nation, Congress also understands that small business growth can only continue if government stops punishing individuals for working hard, creating jobs and saving.

Now you have the opportunity to show America’s small business owners that you also understand that onerous regulations and burdensome taxes cripple and often criminalize honest hard-working Americans. With your signature on the Taxpayer Refund and Relief Act, we can give the men and women who drive our economy what they have been asking for – real relief.

The Taxpayer Refund and Relief Act provides relief and spurs economic growth through:

• The American Community Renewal Act. The ACRA, which will provide significant tax relief and regulatory relief to help America’s poorest neighborhoods revitalize their communities. ACRA has been a top priority of the Small Business Committee, and it will foster significant small business growth in our nation’s struggling communities.

• Increased health care insurance opportunities for the uninsured and the self-employed. The Taxpayer Refund and Relief Act includes a SETRA priority that will allow small business owners to deduct 100% of the health insurance costs – sooner rather than later – beginning in 2000 instead of 2003. This provision is a catalyst that will make health care affordable for the 5 million Americans in self-employed families without healthcare.

• FFARRM Accounts. TRRA includes Farm, Fisheries, and Risk Management Accounts beginning in 2000 to allow the family farmer – the first true small business owner in America and the majority small business – to defer 20% of their annual income in FARRM accounts for up to 5 years to help them in downturns and bad years.

• Death Tax Repeal. TRRA repeals the death tax by reducing its rates to zero by 2009. The death tax causes the destroys the ability to pass family businesses from one generation to the next. This will help thousands of families to continue the legacy of their family farm or small business well into future generations.

• Capital gains tax relief. Expected to offer $35 billion in tax relief, the measure reduces the individual capital gains tax rates from 20 percent to 18 percent and from 10 percent to eight percent (for taxpayers in the 15 percent individual income tax bracket). The capital will allow for improvements and investments to be made in new equipment and advances.

• Improved health care options. TRRA includes measures to make health care and long-term care more affordable and accessible. The bill provides a 25% deduction in 2002 phasing up to 100% by 2006 for individual health insurance premiums and long-term care insurance premiums; provides an additional exemption (currently $2,750) for individuals who care for elderly family members at home; allows employers to offer long-term care insurance in "cafeteria" plans; and expands the dependent care credit.

• Increased meal expense deduction for business to 60%. An important small business priority, the tax relief bill gradually increases the meal deduction to 60% by 2007.

• Increased small business expensing. Current law allows taxpayers to expense up to $19,000 of the cost of tangible trade or business property and equipment. The Taxpayer Refund and Relief Act allows expensing up to $30,000 beginning in 2000.

• Reduced payroll taxes by repealing Federal Unemployment (FUTA) Surtax. In 1976 Congress temporarily enacted the 0.2% surtax to repay government loans from the federal unemployment trust funds. Although Congress fully repaid the loans in 1987, it has continued to extend the temporary surtax. The Taxpayer Refund and Relief Act includes a SETRA provision to repeal this unnecessary surtax in 2004, thereby reducing payroll taxes on small employers without affecting Social Security.

In a previous Presidential radio address discussing the impact of tax cuts for American families, you stated that a tax cut package, "should give as many families as possible the chance to receive the dividends of economic growth." You also said that, "Congress must make sure it is fair to working families." The Taxpayer Refund Relief Act is the answer to your request. I urge you to sign this important legislation so that America’s small business owners – the #1 employer in America – can continue to grow and prosper.

Sincerely,