Instead of Working with GOP on Common Ground, Dems Pitch More Job-Crushing Tax Hikes
Washington Democrats are finding it all but impossible to pass the President’s economic plan amid dissent from within their party. But instead of working with House Republicans to find common ground to create a better environment for private sector job creation, Democrats have resorted to desperate tax hike gimmicks on job-creators.
Yesterday, Senate Democrats unveiled plans to hike taxes by nearly six percent on small businesses, adding yet another government barrier to private sector job growth. As Speaker Boehner noted in a recent Facebook post: “When the White House talks about a plan to raise taxes on ‘millionaires’ or ‘the rich,’ what it really means is raising taxes on small businesses and private capital, which is essential to job creation. Raising taxes on American job creators is exactly the wrong thing to do in this economy.”
“How this would stimulate a sluggish economy even under Keynesian economic theory is a mystery, unless you believe like Democrats apparently do that tax rates don't matter to economic growth. We doubt that's how millions of small business owners will feel if they start paying a top marginal rate on their income—which they report through the individual tax code as Subchapter S companies—of 40%. That would rise to nearly 46% in 2013 under Mr. Obama's other tax proposals (including deduction phaseouts), plus another 3.8% under ObamaCare's tax increases on investment and payroll income. So Uncle Harry would take nearly 50% of everything they make. Who wouldn't want to run out and hire more workers with that incentive?”
So the Democrat “jobs” plan is to raise taxes on the folks we expect to create private sector jobs. As the New York Times reported today, the Democrat tax hike has more to do with politics than policy:
“The new plan, devised by the Senate majority leader, Harry Reid, Democrat of Nevada, has a twofold purpose: to draw a sharp contrast with Congressional Republicans, who have dug in against any increases in tax rates, and to quell a revolt brewing among some Democrats who objected to parts of the White House plan.....Indeed, the Democratic proposal seems more about politics than policy. Even if wavering Democrats could be rounded up to support the president’s plan, Senate Republicans could block the proposal by denying Democrats the votes needed to overcome a near-certain filibuster….The proposed surtax would apply to wages and salaries, capitals gains, interest, dividends and some other types of income, Congressional aides said.”
Economists Scott Baker, Nicholas Bloom and Steven J. Davis wrote in Bloomberg today that the threat of tax hikes and the regulatory uncertainty looming over our economy is hurting economic growth and private sector job creation: “When businesses are uncertain about taxes, health-care costs and regulatory initiatives, they adopt a cautious stance. Because it is costly to make a hiring or investment mistake, many companies will wait for calmer times to expand. If too many businesses wait, the recovery never takes off. Weak investments in capital goods, product development and worker training also undermine longer-run growth.”
Republicans have been focused on removing government barriers to private sector job creation. Just this week, the House is moving on two jobs bills to stop government overregulation that threatens more than 200,000 jobs. Washington Democrats should work with House Republicans to move the dozen jobs bills that are stuck in the Senate, and drop their calls for tax hikes on job creators.
If you’d like to help Speaker Boehner and House Republicans hold the line in Democrat-run Washington, consider making a donation today!