Wicker Says Tax Increases Not The Answer
Senator Says President’s Budget Plan Will Raise Taxes and Hurt Economic Recovery
March 9, 2009
The economic downturn we are currently experiencing is being felt from coast to coast. Across Mississippi and the rest of the country, families, small businesses, and family farmers are struggling to make ends meet. In order to get by, people are tightening their belts and making difficult budget decisions. In response, Americans rightly expect their government to do the same.
Unfortunately, the budget plan recently released by the Obama administration misses that mark by a long shot. At a time when jobs are being lost and the budgets of families and small businesses are tight, this budget outlines a $1.4 trillion tax increase in order to pay for massive new government spending. I want to work with the president to fix our economy and get people back to work, but I do not believe this budget is the answer. The tax increases it calls for would hurt small businesses, kill jobs, and further prolong our economic downturn.
UNIVERSAL TAX HIKE
The president’s budget plan is striking in its eagerness to increase the size and scope of the federal government in every aspect of our economy. Under this blueprint, spending would explode. Before we entered this recession, our national debt was about 40 percent of our gross domestic product (GDP). By drastically increasing government spending and nationalizing things like healthcare and student loans, this budget plan would deliver the strongest dose of European-style Socialism that we have ever seen in our country.
Rather than steering our country out of this recession by outlining a plan that would put more money into the hands of taxpayers and job creators, the president’s budget would increase taxes on every American, stifling investment and job creation at a time when our country desperately needs both.
The budget claims to raise taxes only on “the rich,” but in reality the burden would fall on the small businesses that create 70 percent of the new jobs in our country. Also under this plan, investment income would be taxed at a higher income, hurting families and retirees. Additionally, certain homeowners would be targeted by having their home mortgage interest deduction limited – something I worry would place a further drag on our struggling housing market.
Perhaps most troubling is the budget’s massive new energy tax – something that would hit every single American. This so-called “cap and trade” proposal would raise taxes by $646 billion on coal, oil, and natural gas companies, who would then pass those costs along to consumers by way of higher energy prices. This ill-advised proposal effectively amounts to a new national sales tax, something the Obama administration appears to accept. Speaking recently on ABC’s “This Week,” President Obama’s budget director admitted their budget would increase energy prices. Last year then-Sen. Obama stated: “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.”
DECREASED ECONOMIC ACTIVITY
Now that our country is in a recession, I am extremely concerned with the negative consequences this budget’s tax increases would have on our already sluggish economy. In a troubling report, ABC News recently highlighted some small business owners who were discussing the option of limiting productivity in order to escape the planned Obama tax hike.
One person they talked with in Lafayette, Louisiana, said she planned to cut back on her business to avoid a tax increase. A Boulder, Colorado, dentist was also interviewed, discussing how she may limit activity at her dental office. “It would mean working fewer days, which means having fewer employees, seeing fewer patients and taking time off,” she said.
RESPONSIBLE BLUEPRINT NEEDED
In only the first two months of this year, Congress and the new administration have spent more money than the combined cost of the Iraq and Afghanistan wars and the response to Hurricane Katrina. If a temporary increase in spending is needed to help spur our economy, there must be limits. We must begin showing fiscal discipline.
Our nation is facing serious economic challenges, and the president and Congress must be able to make the tough fiscal choices necessary to put things back on track. By failing to make difficult decisions and instead relying on tax increases and massive new spending, this budget falls far short of that goal.