As you have probably heard, Senate Majority Leader Harry Reid (D-NV) refused to take up President Obama’s call this week to increase taxes on small business owners, investors, and upper-income taxpayers (individuals making over $200,000, and families earning $250,000 or more per year.) I guess we owe a thank you to Senator Reid.
But at the same time Senator Reid is “blocking” President Obama’s plan to raise taxes, he continues to tongue lash those who support extending tax relief for all. So why isn’t Senator Reid allowing a vote on the President’s plan? Well, it seems he does not have the votes – some fellow Democrats will vote against the President. I suppose calling for tax hikes on the so-called rich is better political rhetoric than it is policy. And let’s not beat around the bushes -- it’s really bad policy.
Before the August break, House Republicans will vote to extend all tax relief measures that are set to expire at the end of this year. They also plan to unveil principles for comprehensive tax reform.
As House Ways and Means Chairman Dave Camp (R-Calif.) noted in a recent piece in The Hill: “Those principles are based on the commonsense tax reform policies included in the last two House-passed budgets, which lower taxes for families and job creators to a top rate of 25 percent, eliminate the alternative minimum tax, transition America to a more competitive territorial tax system and keep revenue levels in the historic norm of 18-19 percent of gross domestic product. It is clear taxpayers are sick and tired of a code filled with special-interest loopholes that picks winners and losers and creates massive complexity. The tax code should be simpler, flatter and fairer. By eliminating lobbyist loopholes, we can lower rates and create a healthier, stronger economy with more jobs.”
(To read The Hill piece, please visit: http://thehill.com/opinion/op-ed/234671-stop-the-tax-hike-)
That’s right, tax cuts for everyone – no class warfare, no picking winners or losers in the marketplace. A tax system that is fair, competitive, less complex and most of all stable.
Chairman Camp wants to enact an expedited process so that comprehensive tax reform is complete in 2013. This is a critical priority. The U.S. economy is at crossroads when it comes to how competitive it will be over the next decade. Our global competitors are cutting taxes and enacting reforms that encourage entrepreneurship, capital formation, investment and business expansion. The U.S. simply cannot afford its anti-growth tax system.
U.S. corporate tax rates average 35 percent while the OECD average is 25 percent. Approximately 1.6 million C corporations are small businesses, so lowering these rates would help small firms. Also, our tax system for start-ups and entrepreneurs is entirely too complex and burdensome. The tax code has too many moving parts for small business owners (phase-ins, phase-outs, restrictions, complex credits, etc.) to make rationale and long-term decisions. Stopping the tax hikes and enacting an expedited process for tax reform are central to small business competitiveness and the future of U.S. entrepreneurship.
As Chairman Camp wrote in his piece: “Taking action now to prevent tax hikes sends a clear, strong message to the markets, to employers and to families that Washington is serious about reforming our tax code and putting us on a path to strong economic growth. House Republicans are ready, and we urge Senate Democrats and the White House to provide families and job creators the certainty they need by joining us to stop the tax hike.”
SBE Council strongly agrees with the Chairman. We are long overdue for comprehensive tax reform. And, raising taxes is not only horrible policy, it’s horrible politics -- especially during this weak and unstable economic period.
Karen Kerrigan, President