In todays Wall Street Journal, House Minority Whip Eric Cantor identifies two justifications for his unequivocal opposition to any impending tax increases: The first concerns the pain that tax increases threaten to inflict on our economy over the short term. The second is to stop the slide under our current leadership towards becoming a stagnant European-style welfare state with limited individual opportunity and entrepreneurship.
Weve written before about how President Barack Obamas reckless spending threatens to undermine our nations economic vitality. Before the recession, federal spending totaled $24,000 per U.S. household. President Obamas FY 2011 budget would hike it to $36,000 per household by 2020 an inflation-adjusted $12,000-per-household expansion of government. But spending is just one-half of this White Houses economic plan. Massive wealth distributing tax hikes are the other half of President Obamas wish list and they are just as big a threat to our nations economy.
Contrary to what you hear from teh White House, the Obama tax hikes do not just hit the wealthy. Economic life at all levels is so tightly interwoven that tax increases for one segment of the population will ultimately affect everyone. Nearly everyone will pay something, either in lower income, higher interest rates, or more expensive products, to name just three economic pains the Obama tax hikes till inflict on the economy. The Heritage Foundations Center for Data Analysis has run simulations using their Individual Income Tax Model comparing current law with President Obamas most recent budget proposal which includes: 1) higher taxes on individuals earning more than $200,000 and couples earning more than $250,000; 2) higher taxes on capital gains; 3) higher taxes on dividends; and 4) the return of the death tax. The CDA found that the Obama tax hikes would:
- Destroy an average of 693,000 jobs every year.
- Drain $726 billion from disposal income, $38 billion ††††from personal savings, and $33 billion from business investments.
- Raise taxes on the 55% of all joint filers earning more ††††than $250,000 who run small businesses that employ others.
- Cost the average non-farm small-business owner $3,500 ††††more in taxes.
- Cost the 49% of all seniors with income below $250,000 ††††$525 in additional dividend taxes.
- Cost the 25% all seniors with income below $250,000 ††††$742 in higher taxes.
The bottom line is clear: All Americans would suffer economic harm under the Obama tax hikes. There simply is no justification for raising taxes when the unemployment rate is already near 10%. The American people already know this, which is why the same independents that voted for President Obama by a 52% to 44% margin also oppose the Obama tax hikes. After polling these same independents, Independent Womens Voice CEO Heather Higgins and former President Bill Clinton pollster Doug Schoen describe what these independents really want: Decrease the size and scope of government, cut spending and taxes, balance the budget, reduce the federal debt, reduce the power of special interests and unions, repeal and replace the health-care legislation, and decrease partisanship.
It is possible to balance the budget without raising taxes. The U.S. has a spending problem not a revenue problem. Simply bringing real federal spending back to the inflation adjusted $21,000 per household average that prevailed in the 1980s and 1990s would balance the budget by 2012 without raising a single tax on anyone. Even returning spending to the pre-recession level of 20 percent of GDP would eliminate two-thirds of the projected 2019 budget deficit without raising taxes. Our nation already has the worlds most progressive tax code. Congress should reform the tax code by making it simpler and less intrusive while also cutting spending by making fundamental reforms to entitlement programs (Social Security, Medicare, and Medicaid).