September 20th, 2010
By U.S. Senator Jon Kyl
Despite what you might be hearing on the news, no one in Washington D.C. is calling for a tax cut for the rich.ÂÂÂ
In fact, no one is calling for a tax cut at all.
While I believe American families deserve and need a reduction of their overall tax burden, the current debate in Washington is not over tax cuts, but tax increases. Under current law, all marginal income tax rates as well as other tax rates will automatically increase starting January 1.
This is the result of the perverse budget rules under which Congress operates, where federal spending programs are immortal, but tax relief is considered temporary. When taxes were initially lowered in 2001 and 2003, Senate Democrats would not agree to make the tax rates permanent, which is why we are now faced with the prospect of the largest tax increase in our nations history.
Especially during a time of economic downturn and persistently high unemployment, a tax increase would be catastrophic a $1.2 trillion tax hit to our economy, small businesses, and American families.
Some have argued that we should only increase taxes on the so-called wealthy. But who are these supposedly wealthy people? It turns out that one half of all small business income falls in the individual tax brackets that would be increased. These are the small-business owners who are the lifeblood of the economy. Small businesses generated roughly 64 percent of net new jobs in the past 15 years. And of the almost 120 million private sector workers in the United States, slightly more than half work for small businesses.
According to Douglas Holtz-Eakin, the former director of the nonpartisan Congressional Budget Office, an increase in the top effective rate from 35 percent to 42 percent as President Obama proposes would lower the probability that a small business entrepreneur would add to payrolls by roughly 18 percent.
One more thing about the proposed tax increases. Those who would raise taxes on the wealthy, justify it on the basis that they dont spend the money they earn; they just save it, and that doesnt help economic growth.
They are dead wrong.
People who save money (which isnt a bad thing to do, by the way) dont bury their cash in the back yard. They put their savings to work by investing it or putting it in the bank (which then invests it or loans it to others). These loans and investments are what provide capital for business to expand. Taking more earnings from anyone hurts job creation. This is no time to raise taxes on Americans.
Sen. Jon Kyl is the Senate Republican Whip and serves on the Senate Finance and Judiciary committees. Visit his website at www.kyl.senate.gov or his YouTube channel at www.youtube.com/senjonkyl. back...
Despite what you might be hearing on the news, no one in Washington D.C. is calling for a tax cut for the rich.ÂÂÂ
In fact, no one is calling for a tax cut at all.
While I believe American families deserve and need a reduction of their overall tax burden, the current debate in Washington is not over tax cuts, but tax increases. Under current law, all marginal income tax rates as well as other tax rates will automatically increase starting January 1.
This is the result of the perverse budget rules under which Congress operates, where federal spending programs are immortal, but tax relief is considered temporary. When taxes were initially lowered in 2001 and 2003, Senate Democrats would not agree to make the tax rates permanent, which is why we are now faced with the prospect of the largest tax increase in our nations history.
Especially during a time of economic downturn and persistently high unemployment, a tax increase would be catastrophic a $1.2 trillion tax hit to our economy, small businesses, and American families.
Some have argued that we should only increase taxes on the so-called wealthy. But who are these supposedly wealthy people? It turns out that one half of all small business income falls in the individual tax brackets that would be increased. These are the small-business owners who are the lifeblood of the economy. Small businesses generated roughly 64 percent of net new jobs in the past 15 years. And of the almost 120 million private sector workers in the United States, slightly more than half work for small businesses.
According to Douglas Holtz-Eakin, the former director of the nonpartisan Congressional Budget Office, an increase in the top effective rate from 35 percent to 42 percent as President Obama proposes would lower the probability that a small business entrepreneur would add to payrolls by roughly 18 percent.
One more thing about the proposed tax increases. Those who would raise taxes on the wealthy, justify it on the basis that they dont spend the money they earn; they just save it, and that doesnt help economic growth.
They are dead wrong.
People who save money (which isnt a bad thing to do, by the way) dont bury their cash in the back yard. They put their savings to work by investing it or putting it in the bank (which then invests it or loans it to others). These loans and investments are what provide capital for business to expand. Taking more earnings from anyone hurts job creation. This is no time to raise taxes on Americans.
Sen. Jon Kyl is the Senate Republican Whip and serves on the Senate Finance and Judiciary committees. Visit his website at www.kyl.senate.gov or his YouTube channel at www.youtube.com/senjonkyl. back...
