No one seems to know the full schedule for the Democrats’ lame-duck Congress, but we know the Democratic majority has not scheduled a vote to prevent all tax rates from rising. If there is no vote on the tax cut extensions for all Americans before the end of the year, taxpayers at every income level will see their paychecks reduced as significant tax increases go into effect. The impact won’t stop with paychecks — as the tax rates for savings and investment will rise and the death tax will return in full force. This is bad for American families, small businesses and the health of our economy as a whole.
At a time when America is facing economic crisis, Congress should be looking for ways to stimulate our economy through sound, responsible economic development policies. Allowing these tax rates to increase will only hurt our ailing economy by taking more money out of our families’ wallets. However, instead of passing this important legislation to extend these cuts in the 111th Congress, Democrats chose to pass a bailout bill, riddled with wasteful spending that did little to stimulate our economy.
History teaches us that our economy works best when we reduce regulations, lower taxes and allow families to keep more of what they earn. When it was time to pass the “stimulus” legislation, Democrat proponents were largely unconcerned about how the cost would drive up the deficit. Yet when it comes to directly helping the American people through tax cuts, a proven economic stimulator, Democrats are standing still.
Failing to pass these extensions will worsen our economic health, and an unhealthy economy is the largest contributor to the national deficit. A slower economy produces less tax revenue, and high unemployment results in increased government spending. In the last two years, we have actually had to pay billions of dollars more in unemployment benefits than before the Democrats enacted their so-called economic stimulus bill (or the American Recovery and Reinvestment Act), which cost taxpayers more than $800 billion.
At a time of economic uncertainty, the worst thing we could do is raise the cost of capital, which is one reason these tax cuts are so important to extend. Delaying a vote on these extensions creates uncertainty. When businesses are uncertain about cost projections, it slows operations and stifles growth.
I have cosponsored H.R. 470, the Economic Recovery and Middle Class Tax Relief Act, which contains a number of common-sense tax changes that will promote economic growth and overturn decades of misguided policy. Allowing our workers and families to keep more of what they earn and save — while giving entrepreneurs and small businesses incentives to grow — are the best ways to stimulate the economy. Tax cuts, along with incentives such as tax credits for capital investment, are a vital step toward jump-starting our economy.
Supposedly the Democratic majority will bring legislation to the floor on Thursday that will only cut taxes for individuals who make $200,000 and below, and families at $250,000 and below. I’m glad the Democrats have finally decided that tax relief is helpful for economic growth, but with record unemployment, we can’t afford a tax increase on any American.
Before the 111th Congress comes to an end, I urge passage of legislation that will cut taxes for all Americans. This is not the time for Democrats to be playing politics, but it is the time to pass sensible legislation that has proved to be an economic engine.
Rep. Phil Roe represents Tennessee’s First Congressional District.