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Only in Washington would anyone think raising taxes is the way out of a recession. And yet, that’s exactly what President Obama and the liberals who run Congress want to do.
The tax hikes they propose would apply to half of all small-business income in America, generated from 750,000 small businesses nationwide. These businesses employ 25 percent of the American workforce. To raise taxes now on these important engines of job creation will prolong unemployment and freeze economic growth when we can least afford to do so.
The small-business owners who fall afoul of the Democrats’ tax hike will have to hand over to the government tens of thousands of dollars more every year. That money could have been used to hire new employees or reinvest back in the business. Even the uncertainty that persists now while Washington decides what to do is paralyzing businesses from making the kinds of investments that would help turn our economy around.
That’s why I recently proposed legislation in the U.S. Senate to definitively prevent these disastrous tax hikes. It would keep current income tax rates where they are now, giving small businesses the certainty they need to plan for the future.
My bill would prevent the return of the marriage penalty, maintain the doubling of the child tax credit, and protect millions of Americans from the confiscatory Alternative Minimum Tax so that families could keep more of their hard-earned dollars. And it would preserve lower rates on capital gains and dividends so more money is available to be reinvested into our economy and jobs.
This common-sense principle of not raising taxes in the middle of a recession is receiving bipartisan support. More and more sensible Democrats are joining Republicans to say no to President Obama’s plan to raise taxes on small businesses in the middle of an economic downturn.
The American people are clamoring for a focus on jobs and righting our economy. Instead, for two years the president and the majority in Congress have veered off to the far left and pursued their own liberal wish-list agenda.
First they passed a trillion-dollar stimulus bill that they told us would keep unemployment below eight percent. All we got was higher spending, bigger deficits and unemployment hovering near double-digit levels nationwide, with even higher unemployment in Kentucky.
Instead of limiting the growth of government, they expanded it into areas never seen before: takeovers of the banking industry and the auto industry, and more red tape and regulations.
And despite the protests of the American people, they persisted in a year-long effort to pass a health spending bill that will reduce choice and is already leading to higher costs for individuals and families.
Now, after two years of unrestrained spending, they want to present us with the bill. But America’s families and job creators shouldn’t be held responsible for the liberals’ out-of-control spending.
Most Kentuckians who are outside of the Washington bubble recognize that the problem is not that people are taxed too little: it’s that the government spends too much. Even President Obama once agreed with this.
A little over a year ago the president said, “The last thing you want to do is to raise taxes in the middle of a recession because that would…take more demand out of the economy and put businesses in a further hole.”
Mr. President, I couldn’t have said it better myself. It’s not too late for both parties to come together and reassure American families and businesses that, with all the economic worries ahead, increased taxes will not be one of them.
Senator McConnell is the Senate Republican Leader. You can learn more on this issue on his website: www.mcconnell.senate.gov or by joining McConnell’s official Facebook page at www.facebook.com/mitchmcconnell.