Cantor-Doolittle

Taxpayer Rebate

And Responsibility Act

**Taxpayer Rebate and Responsibility Act**

**"Rebates would ensure that increased spending - even on so-called
one-shot items - resulting from a surplus would not become benchmarks
for increased spending in budgets to come, government spending without
end, amen**."

> The Richmond Times-Dispatch (11/27/97)

**[Explanation]{.underline}**

American families have always known the best way to spend their hard
earned money. It is important that Congress encourages taxpayers to take
an active role in overseeing how Washington spends their money. The
Taxpayer Rebate and Responsibility Act would return at least 50%, and up
to 100%, of any federal surplus to the taxpayers.

The policy would be simple. When the Federal government enjoyed a
surplus, it first would send a stipulated percentage into debt
repayment, and then rebate the rest to the taxpayers.

Under this plan voters would think anew about supporting absurd new
entitlement programs. At the start of each fiscal year, Congress should
determine the size of the expected non-Social Security, non-Medicare
surplus. Congress should then announce how large the expected surplus
tax rebate would be for the typical taxpaying family.

For the first time in decades, fiscal conservatives would actually have
a tool to gin up political support for trimming frivolous spending
whenever and wherever possible. Voters would be given a financial
incentive to keep the government\'s budget under a microscope and to
repel spending for grants to the Pillsbury Dough Boy or obscene art
exhibits. Every dollar saved would be an additional dollar to be passed
back to income taxpayers in the form of a bigger rebate check.

This rebate would effectively end election year pork-barreling because
the marble-plated parking garages and the snow pea research funds would
translate into fewer dollars available for a big rebate check every
year.

In effect, this legislation will return hard earned dollars to America's
working families and cause Washington to remain accountable for its
spending habits.

**[Why Rebates are a Good Idea]{.underline}**

Rebates boast numerous virtues:

-   They implicitly thank the individuals responsible for the surplus

-   They recognize that the government does not have first claim on the
    wealth the citizenry generates.

-   Rebates would not tie the hands of future Presidents or Congress

-   Tax rates would remain steady and predictable

-   If it is essential for the government to spend more than projected
    revenues, then elected leaders should summon the moxie to hike
    taxes - and submit themselves to the mercy of the electorate.

Number range CHAPTER**[What Does the Bill Do?]{.underline}**

-   Gives a rebate to every taxpaying American during years of budget
    surplus.

    **[How Does it Work]{.underline}**

-   This legislation would guarantee that a minimum of 50%, and up to
    100%, of any non-Social Security and non-Medicare surplus be
    returned to taxpayers with tax liability.

-   The Secretary of Treasury would have the discretion to release the
    other 50% of the surplus towards the rebate.

    **[Why This Legislation is Important]{.underline}**

-   It creates truth and accountability in budgeting.

-   It allows the American taxpayers to hold Washington accountable for
    gross misspending of their hard earned tax dollars.

-   It creates an incentive for American taxpayers to be more attentive
    to how their money is being spent in Washington.

-   It returns hard earned tax dollars to American families who surely
    can spend it better than Washington.

    **[Why Should We Pass This Legislation Now and Not Wait Until There
    is a Surplus?]{.underline}**

-   This legislation is designed to curb irresponsible spending.

-   There is no better time to begin curbing irresponsible spending than
    a time of deep deficits.

-   If we wait until Congress returns to surplus, there will be no
    motivation on the part of Congress to be more diligent with the
    spending of taxpayer dollars.

![](media/image1.png)

Number range CHAPTER***Frequently asked questions***

**Q. How much will this cost?**

A. We expect that there is no cost to the Federal Government this year.
In years of surplus, the cost would be directly related to the size of
the surplus.

**Q. What about paying down the national debt?**

A. There is flexibility for the Secretary of the Treasury to designate
up to half of the surplus to pay down the debt.

**Q. Who does it affect?**

A. This legislation affects all taxpaying Americans and their families.
Any one person who has a tax liability will benefit from this
legislation.

**Q. How would it be done?**

A. After a surplus is certified by the Office of Budget Management,
rebate checks will be mailed to every American who had a tax liability
in the individual tax year of the budget surplus year.

**Q. When do checks go out?**

A. The Department of Treasury should be prepared to issue the checks in
January of the following fiscal year.

**Q. What if the surplus is small?**

A. There is a protective clause in the legislation that would stop the
rebate if the cost of administering the rebate is greater than the
surplus itself.

**Q. Does the rebate apply to business too or just individuals?**

A. The rebate only applies to those filing individual or joint returns,
including S Corporation returns. Those filing C Corporation returns are
not eligible.

**Q. What is the committee of jurisdiction?**

A. The legislation would be referred to the House Committee on Ways and
Means.

*Taxpayer Rebate and Responsibility Act Dear Colleague*

**Let the Taxpayers Keep the Change -- Not the Government**

Co-sponsor the Cantor-Doolittle Taxpayer Rebate and Responsibility Act

\"Some say that a growing federal surplus means Washington has more
money to spend. But they\'ve got it backwards. The surplus is not the
government\'s money. The surplus is the people\'s money.\"

-- President George W. Bush

Dear Colleague:

When you go to the grocery store, do you tell the cashier to keep the
change? Of course not! So why should we let the federal government keep
the change?

Our legislation will send rebate checks back to taxpayers when the
government has a surplus. Under the plan, when the federal government
enjoys a surplus, the Treasury Secretary will be required to send a
minimum of 50 percent, and up to 100 percent, of the U.S. government's
surplus back to the taxpayer in the form of a check. At the Secretary's
discretion, a certain percentage of the surplus, but no more than 50
percent, could be used to repay the national debt or fund another
priority. The Taxpayer Rebate and Responsibility Act, when enacted, will
not only return the surplus to taxpayers, but will also provide for
responsible debt reduction.

Under this plan, citizens will be given a financial incentive to keep
the government\'s budget under a microscope. Voters will force Congress
to reexamine new entitlement programs and demand greater accountability
of our tax dollars, without affecting the normal budget and
appropriations process. It is important that we give taxpayers better
opportunities to take active roles in overseeing how Washington spends
their money. We owe them this.

While a rebate is not feasible this year, the time to act is now. There
is no better time to begin curbing irresponsible spending than a time of
deep deficits. If we wait to pass Cantor-Doolittle, there will only be
more excess spending in Washington and no motivation on the part of
Congress to change.

**American families have always known the best way to spend their hard
earned money. Let's give them more of a chance to do so -- sign on to
the Cantor-Doolittle Taxpayer Rebate and Responsibility Bill and give
the taxpayers their change.**

If you would like to sign on to this legislation, please contact Shimmy
Stein (Rep. Cantor) at 5-2815 or Kara Dougherty (Rep. Doolittle) at
5-2511.

***Sample Press Release***

> ![](media/image2.png)**United States House of Representatives**
>
> **Washington, D.C.**

**FOR IMMEDIATE RELEASE** **CONTACT:**

**February , 2004**

**Lawmaker \[Name\] Cosponsors Legislation to Return Surplus to
America's Families**

*Rebate checks will allow Treasury to return surplus to taxpayers*

**Washington, DC**-- Today Congressman \[NAME\] cosponsored the Taxpayer
Rebate and Responsibility Act. This legislation would guarantee the
minimum of fifty percent, and up to one hundred percent, of the surplus
left over at the end of the fiscal year be returned to taxpayers with
tax liability. American taxpayers will receive their rebate through a
refund check during the fiscal year.

"When you pay for groceries, you don't tell the cashier to keep the
change\--why are we letting the government keep the change year after
year? We need to return the surplus back to the American taxpayers who
are overpaying in the first place," said Rep. \[Name\]. "This yearly
rebate option will allow American citizens to become more involved in
what Congress is doing with their money."

This legislation would guarantee that half of the non-Social Security
and non-Medicare surplus left over at the end of the fiscal year would
go to taxpayers with a tax liability, as long as the surplus is larger
than the refund administrative costs would be. The Secretary of Treasury
would have the discretion either to release the other fifty percent of
the surplus to taxpayers or pay down the national debt.

**[Highlights of the Taxpayer Rebate and Responsibility
Act]{.underline}:**

-   This bill gives a rebate to every taxpaying American during years of
    budget surplus.

-   This legislation would guarantee that minimum of 50%, and up to
    100%, of any non-Social Security and non-Medicare surplus be
    returned to taxpayers.

-   The Secretary of Treasury would have the discretion to release the
    other 50% of the surplus towards the rebate.

\--###\--

***Sample Editorials***

**REBATES EVERY SUMMER?**

**The Washington Times**\
**Stephen Moore\
August 02, 2001, Thursday, Final Edition**

![](media/image3.png){width="3.5in" height="2.1902777777777778in"}

Republicans have struck political pay dirt with the tax rebate checks
that are now being delivered to the mailboxes of American taxpayers.\
\
For weeks now tax cut skeptics have been ridiculing these tax rebates as
financially irrelevant to most families, but I\'ve yet to meet anyone
who isn\'t eagerly awaiting their \$300 to \$600 check from the IRS. At
parties, on talk radio, and in casual telephone conversations, all
anyone wants to talk about is how they\'re going to spend their
windfall. CNN\'s Web site chat room is filled with wild and innovative
ideas for blowing \$300 for anyone who is interested.\
\
Economists are busily debating what the financial impact of these checks
will be. But it\'s really irrelevant what people do with the money -
whether they use it to pay down credit card debt or to buy a new car
stereo system - it\'s their money, they should do with it what they
please. The point is that these checks are a deserved and appreciated
down payment on the Bush tax cut.\
\
The popularity of these rebate checks got me to thinking. Why not send
out an automatic tax rebate check every year that Uncle Sam runs a tax
surplus? The size of the rebate check could be made conditional on how
much of the surplus was not frittered away by congressional
appropriators and their voracious spending appetites each year.

In other words, the promise of tax rebate checks could be the ultimate
check and balance against the stampede of federal expenditures.\
\
At the start of each fiscal year, Congress should determine the size of
the expected non-Social Security tax surplus. Congress should then
announce how large the expected surplus tax rebate would be for the
typical taxpaying family. Under this new law, discretionary federal
spending should be permitted to grow no faster than the rate of
inflation (CPI growth) each year. If economic growth came in faster than
expected, federal revenues would be higher and the rebate checks would
be more generous. If Congress raced through its own appropriations speed
bumps, the surplus checks would be correspondingly smaller.\
\
My suspicion is that the prototypical soccer mom, who may not care a
whit about politics, would be hopping mad that the rebate check she was
counting on from the IRS to help pay the plumber\'s bill or for summer
camp tuition, won\'t be coming this year because it was intercepted by
the profligate spenders in Congress who found other uses for the money.\
\
Herein lies the ingeniousness of the automatic annual rebate plan.\
\
For the first time in decades, fiscal conservatives would actually have
a tool to gin up political support for trimming frivolous spending
whenever and wherever possible. Voters would be given a financial
incentive to keep the government\'s budget under a microscope and to
repel spending for grants to the Pillsbury Dough Boy, obscene art
exhibits, or the Bud Shuster moving sidewalk in Pennsylvania. Every
dollar saved would be an additional dollar to be passed back to income
taxpayers in the form of a bigger rebate check. Election year
pork-barreling would lose its \"free lunch\" appeal because the
marble-plated parking garages and the snow pea research funds would
translate into fewer dollars available for a big rebate check every
July.\
\
Under this plan voters would think anew about supporting absurd new
entitlement programs, such as the Kennedy plan for prescription drug
benefits for seniors. Young voters who want the rebate check to help
payoff their student loans would be butting heads with seniors who want
yet another multi-billion-dollar taxpayer hand-out for free Viagra
pills. If voters were aware that Congress\' prescription drug benefit
plan for seniors, with its gargantuan \$300 billion price tag, might
mean some \$100 a year off their tax rebate check, worker enthusiasm for
this new freebie entitlement might start to wane.\
\
Congressional budget hawks like Sen. Phil Gramm, Texas Republican, would
have a field day with this new automatic tax rebate plan. Mr. Gramm
could announce, \"Gee, I\'d like to support this \$50 billion plan to
replenish the IMF, but I can\'t because it would mean that Texans would
only get half the rebate check they\'re expecting in \'02.\"\
\
As the attached chart shows, federal appropriations have risen more than
25 percent over the past four years. My forecast for this year is a 7
percent to 9 percent growth in appropriations leading to our first \$2
trillion annual budget.\
\
This comes on the heels of last year\'s 10 percent spending rampage.\
\
Economist Larry Kudlow calls this phenomenon the \"curse of the budget
surplus\" - because there\'s no longer a rationale to spend tax dollars
frugally. But the Automatic Tax Rebate plan turns a curse into a
taxpayer blessing. Surpluses mean bonus tax rebate checks in the mail.
What\'s obvious from recent spending trends on Capitol Hill is that any
plan that can create a political constituency for smaller government,
would make a lot of economic sense these days.\
\
The Automatic Tax Rebate plan would also heighten the political appeal
of slashing tax rates and ultimately reforming the federal IRS tax
code.\
\
The experience of states like Colorado that have similar automatic
rebate plans is that state legislators will cut taxes if they realize
they can\'t spend surplus dollars on ribbon cutting ceremonies back
home. Where\'s the joy in collecting tax dollars in the first place if
you\'re effectively prohibited from spending them?\
\
Finally, there is economic justice imbedded in this plan. Tax surpluses
belong to the people, not the politicians. I believe it was H.L. Mencken
who once called the federal spending process an advanced auction on
stolen money. Under this rebate plan voters would be reminded that the
federal dollars that Congress lavishes on us with such generosity is
simply money stolen from us in the first place.\
\
Stephen Moore is president of the Club for Growth.

**REBATES**\
**Richmond Times Dispatch**

**EDITORIAL**

**November 27, 1999, Saturday, CITY EDITION**

Virginia\'s economy continues to flex its muscles. Strong growth
generates the revenues - i.e., the taxes - that fill the state\'s
coffers. The economic outlook allows Virginia to proceed with phasing
out the car tax, and to meet other worthwhile budget goals.\
\
The robust economy also argues for automatic rebates.\
\
When the state shows a surplus, the taxpayers deserve to benefit
directly from the bounty their hard work creates.\
\
Bulletin: On Election Day, voters in Washington State approved a
referendum that not only cut car taxes but imposed restrictions on
future tax hikes as well. Although the state\'s political and business
establishment threw its weight against the proposal, the package won
handily. Washington enjoys a surplus. The reluctance to rebate the
surplus to the taxpayers contributed to the referendum\'s landslide.
And\...\
\
\...Jesse Ventura says he decided to run for governor of Minnesota in
large part because his state\'s politicians neither rebated a surplus
nor offered significant tax relief.\
\
Virginia is cutting the car tax, and the sales tax on food. The news is
good.\
\
Rebates would make it even better.\
\
During the 1999 session, Henrico Delegate Eric Cantor proposed a
constitutional amendment to authorize automatic rebates. The legislation
passed the House of Delegates, but fell to parliamentary maneuvering in
the Senate. Virginia\'s calendar works against a constitutional
amendment in next year\'s session, but the General Assembly presumably
could enact a rebate bill regarding the immediate surplus, and leave the
constitutional amendment to future sessions.\
\
Rebates would ensure that increased spending - even on so-called
one-shot items - resulting from a surplus would not become benchmarks
for increased spending in budgets to come, government spending without
end, amen.\
\
Automatic rebates reflect sound policy and simple fairness. And, as the
examples of Washington and Minnesota suggest, they also reflect prudent
politics.

**REBATE THE SURPLUS**\
**Richmond Times Dispatch**

**EDITORIAL\
June 24, 1999, Thursday, CITY EDITION\
**

Virginia appears headed toward another budget surplus. Even now polls
probably are dreaming of ways to use the extra cash. Some will call for
specific tax cuts, others for special appropriations. There\'s a better
way: automatic rebates.\
\
The policy would be simple. When the state enjoyed a surplus, it first
would squirrel a stipulated percentage in the rainy day fund, and then
rebate the rest to the taxpayers. Rebates boast numerous virtues. For
starters, they implicitly thank the individuals responsible for the
surplus. They also recognize that the government does not have first
claim on the wealth the citizenry generates.\
\
Rebates would not tie the hands of future Governors and legislators. Tax
rates would remain steady and predictable. (The arguments for tax cuts
are strong, but not identical to the ones for rebating a surplus.) A
surplus occurs because the government has taken in not only more than
anticipated but more than officials deemed necessary. If it is essential
for the state to spend more than projected revenues, then elected
leaders should summon the moxie to hike taxes - and submit themselves to
the mercy of the electorate.\
\
Spending fuels demands for additional spending. Even so-called one-shot
appropriations drawn from a surplus set new benchmarks for spending in
the future. Certain programs will expect to see extra dollars again;
other programs will demand a bonus slice from the next surplus pie.\
\
During the Assembly\'s 1999 session, Henrico Delegate Eric Cantor
proposed a constitutional amendment to make rebates automatic when the
state\'s budget runs a surplus. The legislation passed the House, but
fell to a parliamentary ploy in the Senate. Another surplus will
reinforce an already compelling case for rebates. When the Assembly
convenes next year, the rebate amendment will deserve the honor of being
named bill No. 1.