Washington Needs to Reform the Tax Code, Not Raise Taxes
Apr 18, 2012 -
Tuesday marked Tax Day and, coincidentally, Tax Freedom Day - meaning that it has taken from January 1 until now for Americans to earn enough money to pay this year’s federal, state, and local tax bill — 29.2% of all our income. We need to put a stop to the government’s overreach into hardworking taxpayers’ wallets.
One way we can stop the government tax overreach is by fixing the broken tax system. I support simplifying our tax code and closing loopholes that amount to spending in the tax code. However, let me be clear – I do not think this government has a taxing problem – it has a spending problem.
I believe we should make tax cuts permanent for all Americans. Since coming to Congress, I voted to extend tax cuts, and I joined a number of my colleagues in Congress on several occasions asking that Washington refrain from raising taxes. I will continue to work with them to try to achieve tax reform that will permanently lower rates on individuals and spur economic growth.
In The Path to Prosperity, House Republicans spur economic growth with bold tax reform – eliminating complexity for individuals and families and boosting competitiveness for American job creators. The blueprint simplifies the tax code by consolidating the current six individual income tax brackets into just two brackets of 10 percent and 25 percent. This budget also rejects raising taxes on hard-working Americans.
While balancing the federal budget with reduced spending, we must lower corporate and individual tax rates to promote greater savings and investment. Both the 2001 and 2003 tax cuts need to be extended permanently. The Path to Prosperity reduces the corporate tax rate of 35 percent, which will soon be the highest rate in the developed world, to a much more competitive 25 percent.
Tomorrow, I will vote in support of the Small Business Tax Cut Act, which is legislation that will directly help small businesses create jobs. The Small Business Tax Cut Act will allow small businesses with fewer than 500 employees to take a tax deduction equal to 20% of their active business income, irrespective of how the small business is organized. Our 20% small business tax cut goes straight to the bottom line so small business owners can retain more capital, invest in their businesses and create more jobs.
To help lower the tax burden, I have cosponsored H.R. 470, The Economic Recovery and Middle Class Tax Relief Act, which contain a number of common-sense tax changes that will promote economic growth and overturn decades of misguided policy. Allowing our workers and families to keep more of what they earn and save – while giving entrepreneurs and small businesses incentives to grow – are the best ways to stimulate the economy. Tax cuts, along with incentives such as tax credits for capital investment, are a vital step toward jump-starting our economy.
Instead of raising taxes, Congress needs to cut spending by eliminating duplicative, wasteful and bloated government programs. However, the president plans to end tax cuts for hardworking Americans. President Obama and Congressional Democrats have pursued higher taxes at every turn under the pretense that raising taxes is fair and everyone should “pay their fair share.” Nothing could be further from the truth, and the so-called Buffett Rule that failed in the Senate earlier this week is the latest job-killing tax hike that will only feed even more reckless spending. The real truth is not that families and job creators are taxed too little, it is that Washington is spending too much.
There is nothing fair about the federal government taking between 30 and 40 percent of your income, especially on top of all the other taxes you pay – like sales taxes, gas taxes, and state and local taxes. Tax Day is a timely reminder that instead of increasing taxes, we should reform the tax code and pass legislation that will help small businesses to grow and let individuals and families keep more of what they earn.