June 27, 2012 at 2:00 pm / by Christopher Cook
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In case the statist left’s rhetoric has gotten to you, let me provide an essential reminder: Only in fantasyland can taxes be levied without having a detrimental effect on the economy.
At small levels, taxes are fine, In fact, to the extent that they allow for the creation of certain necessary social contract functions like police and courts—which help protect property and enforce contracts—a few taxes are good for the economy. But beyond this basic level of taxation, everything else has a negative impact. The higher the taxes go, the more economic activity is squelched.
Right now, Taxmageddon is looming, and if nothing is done to stop it, it is going to cost every taxpayer a lot of money. It will cost people their jobs as businesses are once again forced to retrench. Taxmaggedon is usually thought of as the coming expiration of the Bush tax cuts. But then there are also the looming tax hikes from Obamacare, which the architects of the law cleverly delayed until later years.
Here’s Heritage with more:
Taxmageddon, a one-year $494 billion tax increase, threatens to strike the economy on January 1, 2013, unless Congress and President Obama act to stop it soon. Taxmageddon includes the implementation of five of the 18 separate tax increases in the Patient Protection and Affordable Care Act, better known as Obamacare:
- An increase in the Hospital Insurance (HI) portion of the payroll tax and the application of the tax to investment income;
- A new excise tax on the sales of medical device manufacturers and importers;
- A reduction of the income tax deduction for medical expenses;
- An elimination of the corporate income tax deduction for expenses related to the Medicare Part D subsidy; and
- A limitation of the corporate income tax deduction for compensation that health insurance companies pay to their executives.
All five of these tax increases will have painful impacts on the economy and job creation while expanding the government’s role in the health care market. The HI tax and the medical devices tax are the most harmful.
Release from Speaker Boehner’s office:
Only 188 Days Left to #StoptheTaxHike #4Jobs
On the right is a new countdown clock from the House Ways & Means Committee showing how many days remain before President Obama’s plan for a massive tax hike takes effect.
In a new op-ed for The Hill, Chairman Dave Camp (R-MI) explains why we need to stop the tax hike – which threatens families and private-sector job creation – and do so soon. “Taking action now to prevent tax hikes sends a clear, strong message to the markets, to employers and to families that Washington is serious about reforming our tax code and putting us on a path to strong economic growth,” he writes.
We need to act now, Camp says, because “the U.S. unemployment rate has been at 8 percent or higher” for 40 months “and nearly 13 million Americans are currently looking for work.” Laws like ObamaCare have only made it harder for small businesses to hire. And the nonpartisan Congressional Budget Office (CBO) says the president’s plan for tax hikes “would devastate an already fragile economy.”
In other words: “we can’t wait” to stop the tax hike.
Fixing the tax code is a key part of the Republican Plan for America’s Job Creators. That’s why Speaker John Boehner said the House will vote next month to stop the tax hike and lay the groundwork for the GOP’s tax reform plan to “boost economic growth and create jobs” by putting in place “a fairer, simpler tax code that lowers rates and closes special interest loopholes.”
But it’s not just Republicans sounding the alarm – rather, Camp says, “[s]upport for preventing tax hikes is strong and bipartisan, garnering the support of prominent Democrats such as former President Clinton, former Obama economic adviser Lawrence Summers and Senate Budget Committee Chairman Kent Conrad (D-N.D.). Recently even more Senate Democrats —Sens. Claire McCaskill (Mo.), Joe Manchin (W.Va.), Jim Webb (Va.) and Bill Nelson (Fla.) — refused to endorse a year-end tax increase.”
“House Republicans are ready,” says Chairman Camp, “and we urge Senate Democrats and the White House to provide families and job creators the certainty they need by joining us to stop the tax hike.”