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Why Should Congress Stop the Obama Tax Hikes?

20 minutes after midnight this morning, Speaker Nancy Pelosi (D-CA) gaveled the House out of session, assuring that Congress will now adjourn until after the November elections without taking any action to stop the Obama tax hikes. Earlier in the day, 39 Democrats defied Speaker Pelosi and voted with the minority to keep the House in session until they could vote on the impending tax hikes. Speaker Pelosi, who rarely votes on day-to-day legislation, was forced to cast the tie breaking vote (210-209) on the adjournment resolution. To the members of the majority who broke ranks with Speaker Pelosi, the meaning of the vote was clear: a vote to adjourn was a vote to raise taxes. They voiced their displeasure after the vote:

Rep. Gerry Connolly (D-VA): I think we should stay and deal with taxes. We should extend the tax cuts now. Before we adjourn. I get paid to be here. Lets do our job.

Rep. Bobby Bright (D-AL): Im not ready to adjourn if theres any work they expect us to do. Weve got a lot of work to do, a lot of unfinished business, and Im ready to take it on. Thats my position. The vast majority of people in my district are saying Dont raise taxes when the economy is in such a bad state, on anybody.

Rep. Zack Space (D-OH): Thats an issue we should be resolving before we go home. I think that small business, big business, individuals, have a right to expect some certainty. The longer we keep this open, the more uncertainty there is. Our economy is such that I dont think we can afford that.

House Democrats are not the only ones willing to fight the Obama tax hikes. Yesterday, Sen. Ben Nelson (D-NE) explained to an audience at The Heritage Foundation why he was in favor of not raising any taxes until the economy shows stronger signs of recovery:

In my view, raising anyones taxes, given our fragile economy would be a move in the wrong direction. Nebraskans I represent tell me they feel a lot of uncertainty about the future. Nebraska business owners do to. The possibility of tax increases is just one more reason that companies at home and across the country are holding on to cash and are hesitant to invest in new equipment, new production and new employees.

Sen. Nelsons speech yesterday was hosted by The Heritage Foundations Center for Data Analysis Director Bill Beach, whose recent study, Obama Tax Hikes: The Economic and Fiscal Effects, found that the Obama tax hikes would:

  • Destroy an average of 693,000 jobs every year through 2020.
  • Drain $726 billion from disposable 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 CDA is not alone in their verdict. A recent CNN survey of economists found that the most important thing Congress can do to help the economy is stop the Obama tax hikes. But now, thanks to the current majority in Congress, that will not happen.

At the beginning of his remarks yesterday, Sen. Nelson reminded the audience of Ben Franklins wisdom that in this world nothing can be said to be certain, except death and taxes. Sen. Nelson then added: And it was Will Rogers who amended that by saying the only difference between death and taxes is that death doesnt get worse every time Congress meets. Hopefully the next Congress will prove Rogers wrong.

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