Don’t Overtax Our Economy

 

Senator Mike Johanns

Recently in the Senate, we’ve been debating whether to allow a massive tax increase on our job creators and every American taxpayer at the end of the year. This is exactly what will happen if Congress doesn’t act. I strongly oppose allowing a tax increase with our economy still struggling and our job creators still struggling to put Americans back to work.

The bills being considered in the Senate approach our economic struggles from the completely wrong direction. For example, one bill I opposed, which did not pass, sought to punish businesses which establish aspects of their operations outside our borders. Beyond political talking points, this would do nothing to confront the reasons why businesses are moving overseas in the first place.
Why aren’t American businesses staying in America, and how can we encourage them to stay? These are the questions we must be asking. The answer lies in the fact that, despite class-dividing messaging about taxes, the corporate tax rate in the United States is the highest of any country in the world. You can literally set up shop anywhere around the globe and you’d be paying lower tax rates than if you did so in Kearney or Cozad.
Business owners have to make smart business decisions to thrive, and the bottom line is our tax code discourages locating operations in the United States. Instead of making the tax code more conducive to American job creation, the Senate is wasting time on political messaging votes. Job creators could be hiring more at home if tax rates elsewhere weren’t so much lower than they are here.
Instead of playing politics we should be working to update our tax code and deal with our crippling debt, and the first step should be preventing the January 1 tax increase. In 2010, when he signed a two-year extension of the current tax rates, President Obama himself asserted it was a bad idea to raise taxes in a struggling economy. He has since changed his mind and would have you believe it’s now a good idea.
This despite the fact that our economy is growing at a slower rate than two years ago, when the President said the economy was too fragile to raise taxes; despite the fact that, according to a new study, letting these taxes go back up will actually shrink the economy by about 1.3 percent and lead directly to about 710,000 job losses; and despite the fact that, according to IRS data, the average Nebraskan’s taxes would go up by nearly $2,500. Some argue it would cost too much to prevent this take hike on our job creators, yet the additional revenue from the President’s plan would fund the federal government for less than three days.
The answer to our economic struggle is not to raise taxes, making it harder for job creators to grow and compete, and decreasing the buying power of Nebraska families. Nebraskans need less government in their lives, not more. Nebraska families and businesses need more of the money they’ve earned to help make our economy and their own lives better. I will continue pursuing policies in the Senate toward that goal.