Mr. Chairman, it may be déjà vu all over again, but we don’t have to do the same thing all over again. This year marks the third time in the last five years that core tax rates on either individual or investment incomes have been scheduled to expire. That’s no way to run a country, and it’s no way to help the economy.
While Congress should once again act to stop the tax hike, we should also take this opportunity to finally get serious about tax reform that makes the code simpler and fairer, which could lead to the creation of more than 1 million jobs in the first year alone.
The Job Protection and Recession Prevention Act (H.R. 8), provides a one-year extension of the low-tax policies originally enacted in 2001 and 2003 and then extended again in 2010, with the support of 85 current House Democrats, 40 current Senate Democrats and President Obama.
The reason we acted then to extend those policies, and the reason we should extend these rates again now, is simple – it’s about jobs. Just like two years ago, the economy remains weak, with the unemployment rate now at or above 8 percent for 41 consecutive months. And as the President said, “you don’t raise taxes in a recession.”
The non-partisan Congressional Budget Office estimates that these tax increases, when paired with the rest of the policies that constitute the fiscal cliff we face at the end of this year, could cost America 2 to 3 million jobs. And, if we only extend some of the current tax rates, as our Democrat colleagues have suggested, we could lose 710,000 jobs, according to a study by Ernst and Young. Mr. Chairman, middle-class families cannot afford any more job losses.
That is not just my perspective; it is the perspective of small business owners like Kim Beck of the Automatic Feed Company in Napoleon, Ohio. In recent testimony before the House Ways and Means Committee, Mr. Beck spoke about the impact of raising taxes on job creators saying, “Tax increases simply leave less for investment and jobs. The last thing Congress should do right now is raise taxes on small manufacturers just as we are rebounding after a devastating recession, especially to finance more government spending. President Obama and some in Congress propose to do exactly that by calling for the expiration of the Bush tax cuts on incomes over $250,000 a year. The federal government must recognize that a tax increase on those who report income in the top brackets is a direct tax increase on manufacturers like me.”
As we work to stop the tax hike, we must also consider what else can be done to strengthen our economy. That is why in addition to preventing job-killing tax hikes, Republicans support adopting a fast-track process to enact comprehensive tax reform next year.
The Pathway to Job Creation through a Simpler, Fairer Tax Code Act (H.R. 6169) includes specific timelines for the House and Senate to act on comprehensive tax reform. This forces Congress to do what individuals and families, as well as employers of all sizes, have asked – firmly commit to comprehensive tax reform that provides the certainty that taxpayers need to make a plan, and that job creators need to make investment and hiring decisions.
Independent economists have predicted that, when coupled with spending restraint, the commonsense tax reform policies reflected in this approach and included in the last two House-passed budgets will lead to the creation of 1 million jobs in the first year alone.
Mr. Chairman, this week boils down to two different visions for our country and one choice facing Congress. Do we want to raise taxes and destroy over 700,000 U.S. jobs, or do we want to make the tax code simpler and fairer and create over 1 million new jobs for American workers?
I thank the Chairman for the opportunity to discuss this legislation, and I am happy to answer any questions.
Ways and Means Press Office