Congress should act now to prevent across-the-board tax increases from hitting nearly all Americans on Jan. 1. Sustained job creation and economic growth are urgently needed — higher tax rates are not. The failure to take decisive action on this issue further heightens the uncertainty holding our economy back.
It would be a mistake to increase taxes on any American family, worker or job creator. President Obama continues to make the case for raising the top two income tax rates, and raising tax rates on capital gains and dividends. Class warfare might make for good politics, but it results in terrible economics.
Misguided efforts to “soak the rich” would impact roughly half of all small-business income, as many small businesses file as non-corporate businesses and pay individual income tax rates. The president’s tax plan dampens incentives for small businesses to invest and expand, puts us at a competitive disadvantage in today’s global economy, and makes it more difficult for our economy to create jobs.
There is no question that the $13.7 trillion national debt represents a dangerous anchor on the economy going forward. To address the federal government’s fiscal imbalance, we need both economic growth and serious spending restraint.
Policymakers cannot continue to chase ever-higher levels of government spending with ever-higher tax rates. Increasing the government’s take from the economy hinders growth and avoids the necessary spending cuts. It is critical we match opposition to tax increases with a fervent commitment to spending restraint and reform.
This contentious issue provides an opening for a conversation on pro-growth tax reforms, reorienting a simpler, more competitive tax code to raise revenue needed to meet government’s priorities, while maximizing economic growth.
Altogether, Congress must get the pro-growth economic fundamentals right. Economic policies must restore the basic foundations of growth: low tax rates; sound and honest money; fair, predictable and reasonable regulations; spending restraint and government reform.
Americans reject the “new normal” of high unemployment, stagnant growth and excessive government overreach. Stopping these tax hikes is a critical first step to restoring the promise and prosperity of our exceptional nation.
Rep. Paul Ryan, R-Wis., is in line to become chairman of the House Budget Committee in the new Congress.