American families, small businesses and employers face a crippling tax increase at the first of the year unless Congress acts to preserve current tax rates. Raising taxes in this economic climate is bad policy. And yet there are some in Washington who are completely comfortable with passing a massive tax hike during a recession.
According to figures from The Heritage Foundation, the average tax increase in 2013 is estimated to be $2,292 per tax return for Arkansans. In this weak economy, the last thing Arkansans want to do is send more of our hard earned money to the Washington that has time and time again proven its reckless authority with our tax dollars.
Washington borrows about 40 cents of every dollar it spends. Our country is running record breaking deficits year after year and we have had 41 straight months of unemployment above eight percent. Failing to maintain the current tax rates will continue to slow our economic recovery, hurting American families and small businesses even more, and further erode the fiscal cliff our economy is facing.
President Obama ignores these facts as he continues to push for a tax increase on our job creators. Recently, the Senate Majority put its proposal up for a vote. Despite my opposition, the bill, which would increase taxes on individuals making more than $200,000 or families making more than $250,000 a year, passed the Senate. Approximately 940,000 small businesses fall in the category that would be hit by this tax hike. This legislation also increases taxes on capital gains and dividends for certain individuals and allows the death tax to return to a 55 percent rate with a million dollar exemption.
According to a study by Ernst & Young, raising taxes makes our nation’s fiscal and economic problems even worse. The study shows raising taxes on this segment of the population would result in 700,000 lost jobs and a decrease in wages by nearly two percent.
While the Senate Majority continues to press for tax increases on our job creators, I am standing firm on protecting the American Dream. Americans who have worked hard to build a successful small business or family farm should be able to pass it along to future generations. I introduced the “Death Tax Repeal Act” that would permanently eliminate the federal estate and gift taxes that punish our small business owners and agriculture producers. According to a recent study by Douglas Holtz-Eakin, the former director of the non-partisan Congressional Budget Office, repealing the death tax would create 1.5 million additional small business jobs and would decrease the national unemployment rate by nearly one percent.
We need a common sense answer to job creation. In this weak economy that starts with extending current tax policy. Failing to maintain the tax rates on American families and small businesses will further slow our economic recovery and continue to erode the fiscal cliff we are facing.