It looks like the impending expiration of the 2001 and 2003 Bush Tax Cuts has finally generated (overdue) conversation on Capitol Hill. While most people tend to think some of the cuts will be extended, there is still doubt concerning which relief provisions and brackets will be addressed. NTU released an issue brief a couple weeks back outlining ten reasons to extend tax relief and stop hikes, and we continue to maintain the position that a failure to extend cuts would virtually guarantee a double-dip recession – a liability our nation simply cannot afford.
We are big fans of Representative Tom Price and the great work he has done on many important issues. His op-ed on Townhall.com, entitled “Tax Hikes Are a Losing Bet,” is no exception. Representative Price also acknowledges the possibility of a double-dip recession and the devastating effects of an Obama tax hike that could very well prove to be the largest tax increase in American history. Here are a couple excerpts from the piece:
“Just how big are we talking? Up to $3.8 trillion – and it would fall on taxpayers across the entire income spectrum. Let’s start with the federal income tax. According to the non-partisan Tax Foundation, the typical median-income family making $63,000 a year would be hit with a $1,540 higher federal income tax burden. The 10% rate for the lowest income taxpayers is slated to disappear completely in 2011, and the rate paid by those Americans would increase sharply by 50%. For the top bracket, the income tax rate would rise to just shy of 40%.”
“To get the full picture, we must also account for the taxes Americans pay to state and local governments. Over the last two years, recession-wracked citizens of at least 29 different states have already been forced to fork over more of their hard-earned money. When you add it all up, many Americans will give the Tax Man over half of every dollar they earn. Big spenders in government salivate at such a thought, but these policies come with a far higher cost – the opportunity cost of decreased investment, fewer jobs, and reduced prosperity. This higher tax burden will impede economic growth over the long run, which in turn means lower revenues coming into the Treasury. With a weak economy and unsustainable annual deficits already well over $1 trillion, we need a better plan for the future.”
Thank you, Representative Price, for your always insightful points that further prove the need to act swiftly and extend lower tax rates. Raising taxes is never wise policy, but it would be fiscally suicidal in this economic climate.