October 6, 2011
A large part of the frustration among America’s job creators is the constant threat of higher taxes to pay for the Democrats’ out of control spending. Today, President Obama exacerbated the problem by doubling-down on his pledge to increase taxes on job creators in order to fund another round of “stimulus” spending that has already failed to create jobs. While the Republican-led House approves bills to improve the environment for job creation, the president and Democrats in the Senate are determined not to consider these important pieces of legislation. Instead, Democrats are pushing the same failed policies that have brought us record debt and the worst unemployment since the Great Depression.
As Unemployed Americans Already Know, Stimulus Spending Did Not Work
Today the President said of another round of stimulus spending, “here are the best ideas I’ve heard.” Unfortunately, these are the exact same ideas President Obama has had for the last two years— and these ideas have failed.
- Today the Department of Labor reported that unemployment claims rose by 6,000 this week, eclipsing 400,000 claims for the 24th time in 26 weeks.
- Only 2 out of the last 28 months have seen unemployment below 9 percent (February and March 2011). From March 2009 (the month after the failed $1.2 trillion “stimulus” was signed) through August 2011, unemployment has averaged 9.4 percent. In 2009, the White House claimed that unemployment would not eclipse 8 percent if the stimulus became law.
- According to the Obama Administration, $30.6 billion in transportation infrastructure spending has been paid out since the president’s first stimulus was signed into law. Another $22 billion in miscellaneous infrastructure funding from the stimulus has been spent as well. The result? According to BLS, construction employment has dropped by 931,000 or 15 percent since February 2009.
- While the president calls for more tax increases, confidence among small business owners fell for the sixth consecutive month and reached its lowest level in more than a year. According to the National Federation of Independent Business’ August report, “At this point, no one knows what their tax rate will be 6 months from now; no one knows what health care will do to labor costs. Higher for sure, but by how much?”
Irresponsible Tax Increase Threats at the Worst Possible Time
Senate Majority Leader Harry Reid announced a proposal to offset President Obama’s new stimulus plan with a permanent 5.6 percent surtax on Americans with an adjusted gross income above $1 million beginning in 2013. According to Senator Reid, the proposed surtax would increase taxes by $450 billion over ten years. Sadly, but not surprisingly, the president has all but agreed to the Reid tax during the worst jobs crisis since the Great Depression. The fact of the matter is that this tax increase will destroy jobs and do nothing to solve our nation’s fiscal problems.
- Higher taxes simply won’t solve our fiscal problems. According to the IRS, American’s making more than $1 million earned a total of $726 billion in 2009. Even if the president taxed every millionaire in America at 100 percent, it would only reduce the 2011 deficit by 56 percent, leaving an annual deficit of $568 billion. Washington is in the midst of a spending driven crisis and we cannot tax and spend our way out of it.
- According to the Department of Treasury, 41 percent of all business income reported on individual returns would be hit by the Reid surtax.
- The president says job-destroying tax increases will make the wealthiest in the U.S. “pay their fair share,” but the top 1 percent of income earners already pay 38 percent of all income taxes, and make only 20 percent of all income.
- According to the IRS, Americans earning more than $1 million already pay for more than 20 percent of all income taxes in the U.S. despite producing only 10 percent of all income.
- Increasing tax rates and decreasing deductions for earners in the top two tax brackets as called for by the president and congressional Democrats, as well as surtaxes included in the Democrats’ health care takeover, would result in an effective income tax rate of 50 percent for Americans making $1 million.
The House Republican Plan For America’s Job Creators
House Republicans have a Plan for America’s Job Creators to reduce government red tape and provide lasting certainty for job creators so they can put Americans back to work. Republicans are listening to job creators, moving bills to create jobs, and reaching out to the president with ideas to grow the economy. Just today, for example, the House approved bipartisan legislation eliminating excessive federal regulations that threaten thousands of jobs. House Republicans are committed to doing the following:
- Enact a regulatory relief agenda that will repeal specific regulations, and provide fundamental and structural reform of the rule-making system.
- Reduce spending and restore fiscal sanity to give small businesses and job creators the stability and confidence to expand and hire new employees.
- Require congressional review and approval of any government agency regulations that have a significant impact on the economy or burden small businesses.
- Audit existing and pending regulations to identify and address those that hinder economic growth.
- Approve the three pending free trade agreements with Colombia, Panama, and South Korea, which the Obama Administration estimates will create up to 250,000 jobs.
- Promote lower energy prices through increased domestic production.
- Increase American competitiveness by lowering tax rates in a deficit neutral manner and ensuring the president’s job-destroying tax increase don’t take effect.
House Republicans are committed to taking every possible step to spur job creation and get our economy back on track so that Americans can do what they do best: create, innovate and lead.
For additional information, contact:
The House Republican Conference Policy Office