The madness of raising taxes

| August 10 2012

Manufacturers: POTUS’ Tax Hike on Job Creators “A Fundamentally Bad Move”

While out campaigning yesterday, President Obama told supporters, “We’ve got too much work to do to create good jobs.” He’s also said he supports “bringing manufacturing and construction jobs back.” What the president doesn’t tell his audiences is the centerpiece of his campaign – a massive tax hike on small businesses – will actually hurt manufacturers and destroy hundreds of thousands of jobs.

According to the National Association of Manufacturers (NAM), President Obama’s “tax increase on those making over $250,000 per year is a tax increase on manufacturers”:

“Nearly two-thirds of manufacturers pay taxes at the individual rate and they need those resources to invest in their companies and hire workers. In fact, according to a recent NAM/IndustryWeek survey, 56 percent of these manufacturers indicated that higher taxes will negatively impact business investment or job creation and retention. President Obama has said himself that it’s a terrible idea to raise taxes in a struggling economy and he was right when he said that.

“S-corporations and other flow through entities employ 54 percent of the private sector workforce. Increasing the tax burden on these job creators is a fundamentally bad move and will hurt our fledgling economic recovery.”

A nonpartisan study by Ernst & Young found the president’s tax hike would destroy more than 700,000 jobs and – for those lucky enough to have a job – would result in lower wages. Just the threat of higher taxes has small businesses “putting off new hires.”

That’s why the House already voted to stop all of the president’s tax hikes that threaten middle class families and small businesses, and to replace the ‘sequester’ defense cuts that threaten our national security.

The Washington Post warns that failure by Senate Democrats and the president to follow the House “could shrink the economy by about 3 per cent in the first half of 2013, at the cost of 1 million to 2 million jobs, the Congressional Budget Office estimated months ago.” That’s bad news for struggling families when the unemployment rate has already been above eight percent for 42 straight months.

The House has also passed more than 30 other jobs bills, and voted to begin fixing the tax code – a key part of the GOP jobs plan – to help keep jobs here and bring home some of the jobs that have gone overseas. While President Obama insults small businesses and pats himself on the back for his failed policies, the House has focused on removing barriers to job growth – now we need Senate Democrats to do the same. Republican leaders are ready to reconvene if and when they do.

 

Economists: Obama “Recovery” A “Real Tragedy,” Would Be “Madness” to Raise Taxes

Friday’s jobs report showed the unemployment rate “ticked up to 8.3 percent.” That makes July the 42nd consecutive month with unemployment above eight percent and this “the weakest economic recovery since World War II.”

Stanford economist John B. Taylor examined July’s unemployment report and said the economic recovery under President Obama has been “a real tragedy.” Trillions of dollars in deficit spending, excessive new government regulations and red tape, the government takeover of health care, and the ever-present threat of tax hikes have led to what Taylor calls “a recovery in name only.”

More and more economists now say stopping all of President Obama’s tax hikes is necessary to prevent further damage to our struggling economy. The House passed a bipartisan bill to do so, ensuring no small business or middle class family would see their  taxes rise; but so far, the president and Senate Democrats aren’t listening.

Instead, with millions still out of work and small business optimism declining, Democrats are threatening to raise taxes on all Americans unless they get a small business tax hike that Ernst & Young says will destroy more than 700,000 jobs.

In other words: Democrats propose tanking the economy or tanking the economy. And so far, they seem perfectly fine with allowing the ‘sequester’ defense cuts to devastate our national security too.

Former Congressional Budget Office Director Douglas Holtz-Eakin says Democrats’ threat is “madness.” And he’s not alone.

Speaker John Boehner released a list of 88 economists who say the looming tax hikes are “patently irresponsible” and “misguided in the extreme” – and must be stopped. Several other economists say raising taxes would be a blow to our already weak economy. Many Democrats agree.

But so far, only the House has voted to stop all of the tax hikes and replace the ‘sequester’ defense cuts with common-sense spending cuts and reforms.

Click here for a closer look at the Republican and Democratic tax plans, and visit jobs.GOP.gov for more information on the Republican plan for removing government barriers to job growth.

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