Congress Punts on Tax Hikes

Yesterday, Congressional Democrats announced that they will not be holding a vote before the midterm elections to extend the 2001/2003 tax cuts due to expire at the end of this year.

If Congress fails to act, American taxpayers will face an enormous tax hike at a time when so many families are already struggling to make ends meet. This sort of tax hike will take money out of the hands of consumers and investors and will further imperil our delicate economic situation.

I’ve repeatedly called for an extension of all the tax cuts because, quite simply, now is the wrong time to be raising taxes on anyone. Economists across the country agree: tax increases will harm demand for the products and services offered by small businesses and hamper economic recovery.

Tax cuts for small businesses and individuals making over $250,000 only accounted for 4% percent of the deficit. The Stimulus alone accounted for 6%. Spending under the Obama administration accounts for 32% -- nearly 1/3 of the entire deficit. We don’t have a tax problem, we have a spending problem.

I’ve often written about the harmful effects of uncertainty on investment and hiring. Businesses that cannot confidently predict their costs in the future will be unable to decide if a new venture – be it launching a new product, opening a new store or hiring a new employee – will be profitable. Prudent business owners will not take risks with so much uncertainty, and as a result the new factory goes unopened and the new employee goes unhired. The economic uncertainty caused by the Democrats’ tax-and-spend policies has a serious and detrimental effect on America’s economic recovery.

But what is perhaps even more galling than the Democrats’ desire to raise taxes at the absolute worst possible time is the political cowardice they’re exhibiting by refusing to even bring the issue up for a vote. Waiting until after Election Day leaves very little time for such an important issue to be ironed out, negotiated, passed by both Houses and signed into law before the tax increases take effect. But Congressional Democrats would rather risk raising taxes on nearly the entire country than cast a politically unpopular vote so close to an election.

That isn’t leadership, that’s petty political posturing, and America deserves better.