Don’t mess with success

Despite campaign promises not to raise taxes, the new Democratic majority's budget fails to keep existing tax policies in place, which amounts to a $900 billion tax hike over five years, the largest tax increase ever, say Senators Judd Gregg (R-N.H.) and Chuck Grassley (R-Iowa).

For instance:

Under a Democratic budget that does not extend existing tax policies, the lowest-income families who pay taxes will see their taxes increase by 33 per cent.

The $1,000 per child tax credit would be cut in half, and the standard deduction for married couples would be cut by $1,700.

Forty-five million working families with two children would pay $3,000 more in taxes per year, equivalent to a 5 per cent pay cut.

In addition to taking more from hard-working families, that tax hike would serve to slow the economy, suppressing investment and job creation, becoming a noose around the neck of the economy. It would also dampen the positive impact that the tax cuts have already had:

Since 2003, more than seven million new jobs have been created – and at 4.5 per cent, the unemployment rate is below the average of the past three decades.

The U.S. economy is experiencing five uninterrupted years of growth, and since the tax cuts of 2003, the rate of economic growth has more than doubled.

Real wages and benefits have increased 7.5 per cent under President George W. Bush, compared to 6 per cent under President Bill Clinton during the first six years of their respective presidencies.

Despite false accusations that tax relief has benefited only the top wage-earners, it is worth noting that high-income taxpayers bear a greater burden of the total tax payments now compared to the Clinton years. Meanwhile low-income taxpayers' burden has decreased to 10 per cent from 15 per cent.

Source: Judd Gregg and Charles Grassley, Don't Mess With Success, Wall Street Journal, March 15, 2007.

For text: http://online.wsj.com/article/SB117392576021537752.html

For more on Taxes: http://www.ncpa.org/sub/dpd/index.php?Article_Category=20

FMF Policy Bulletin/ 20 March 2007