Tuesday, July 10, 2012

Certainty Encourages Economic Growth

 

The U.S. economy added just 80,000 jobs in June and the national unemployment rate remained above 8 percent for the 41st consecutive month. With millions of Americans out of work or underemployed, it is the latest indication the President’s policies of massive deficit spending, increased federal regulation and calling for added taxes on America’s small businesses are failing to create economic growth.

Part of the problem is the amount of tax and regulatory uncertainty facing job creators as they prepare budgets and decide whether or not to expand their businesses and hire new employees. When business owners don’t know how much their tax bill will be next year, they are less likely to make further investments.

The most significant source of uncertainty is the expiration of the current tax rates scheduled for the end of the year. Allowing these rates to expire would represent the largest tax increase in American history. Because the tax hikes would take effect on January 1, 2013 many are referring to this date as “Taxmageddon” or the “Fiscal Cliff.”
These tax hikes will not only affect businesses, but also agriculture producers and families already struggling to pay their bills and make ends meet.
Raising tax rates on Americans when they can least afford it would be devastating to family budgets and the economy as a whole. The non-partisan Congressional Budget Office found failing to prevent Taxmegeddon would result in a recession in early 2013.
Further adding to uncertainty in the private sector was the Supreme Court’s decision to uphold most of the President’s health care law. With the law in place, businesses and families are facing not only the prospect of less affordable care, but also tax increases and burdensome new regulatory requirements making it more expensive to do business and hire new workers.
The House of Representatives will act this month to alleviate the uncertainty created by the looming tax hikes at the end of the year and the health care law. This week, the Ways and Means Committee will hold a hearing on the tax ramifications of the Supreme Court’s health care decision. In this hearing we will analyze the Court’s interpretation of Congress’ taxing authority, and what implications the decision could have in the future.
I will join a bipartisan majority of my colleagues in the House to vote for repealing the health care law in full on Wednesday, July 11th. If the Senate and the President join us in overturning the law and begin an incremental approach to patient-centered reforms, we could expand access to quality care and lower costs while addressing the regulatory and tax concerns of job creating businesses and families.
The House also will vote this month to prevent Taxmaggedon by extending the current tax rates for all Americans. I have yet to hear an argument from anyone that increasing taxes on any Americans will balance our budget or grow our economy. The truth is, to make our economy more competitive in a global market and give employers and individuals more confidence to invest in the long-term, we need tax reform. As a member of the Ways and Means Committee, I am still committed to this goal. However, to prevent immediate harm to Nebraska families and the national economy, we must act now.
Job creators and entrepreneurs will remain hesitant to expand their businesses and grow as long as the threats of the tax hikes and Obamacare are looming over our heads. Congress and the President must pass legislation to remove this uncertainty, and encourage the private sector to grow.
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