Why the President is Wrong on Taxes
Senator John Boozman's Column for the Week of Week of October 10, 2011
Oct 11 2011
The President agreed with Mr. Ferguson and responded, “His economics are right. You don’t raise taxes in a recession.”
Flash forward to summer 2011.
Now, President Obama wants to raise taxes for his new plan to reduce the deficit and pay for his latest round of stimulus, which is nothing more than a rehashing of a failed plan.
What has changed in those two years to lead President Obama to believe that now is a good time to propose a tax hike?
The economy certainly isn’t any better. When President Obama said that tax increases during a recession were off the table, the national unemployment rate was 9.7 percent. Today, it stands at 9.1 percent. Clearly, this is not an indication that we are making a significant economic recovery.
While the President’s stimulus plan has areas where we can find common ground (infrastructure investments, new trade agreements), it mostly amounts to more of the same “Big Government” programs that failed to jumpstart the economy the first time around.
With 14 million unemployed Americans, the President’s only answer is to double-down on government spending. The difference this time is that he can claim it is “paid for” as long as he can get his tax hikes through Congress, which leads us to his embrace of tax increases in an economy that is worse than it was when he previously rejected them.
The President’s tax, borrow and spend approach will have a negative impact on economic growth.
As a former small business owner, I can tell you this plan will make it harder to hire more people. If the tax burden is higher for small businesses, the backbone of our economy, it takes resources away from the expansion and creation of new jobs.
This plan is based on the economic misconception that you can just tax the American people more to cover excessive spending. But let’s face it, Washington does not have a revenue problem, it has a spending problem. The President's idea is nothing more than a tactic to stall the real reforms that Washington must undertake in order to avert an economic collapse.
I’m working with my colleagues in the Senate to address this crisis in a responsible manner. Let’s rein in spending, reform our tax code, reduce regulatory burdens imposed by government agencies, increase exports by passing pending trade agreements and create a new energy policy that allows us to use American resources and make us less dependent on foreign oil.
That’s how we can get the economy moving again – by encouraging investment in small business, the heart of our nation’s economy, instead of discouraging it through senseless tax hikes.