By Congressman Peter Roskam
If you haven't been paying attention to the tax cut debate yet, you need to take a few minutes to find out how Democrat Leaders in Congress are set to deliver a one-two punch to the American public in the form of higher taxes on families and small businesses. At this time of economic uncertainty and sluggish growth, an across-the-board tax increase on families and individuals promises to keep the economy on its knees.
Starting January 1, 2011, new tax rates will kick in across the board, raising taxes on American families and small businesses by a staggering $3.8 trillion, from those in the lowest tax bracket and continuing all the way up the economic ladder. The Tax Foundation, a non-partisan, independent research organization estimates that an average family of the Sixth Congressional District will see their income taxes increase $1,972. At a time when many Americans are struggling to make ends meet, this misguided policy will take more money out of the pockets of individuals in order to fuel more of the wasteful government spending that is on track to triple our national debt.
Under current law, the lowest tax bracket, at 10%, will be eliminated. That rate will rise to 15%, costing almost 100 million families who can ill-afford it an extra $500 in taxes next year. Similar increases will affect each of the other marginal tax rates, all the way up to a top effective personal income tax rate of 41.6%. Just as troubling for many families will be the reinstatement of the marriage penalty and cuts to the child tax credit.
According to the non-partisan Joint Committee on Taxation (JCT), Congress's official scorekeeper, reinstating the marriage penalty will cost 35 million married couples an average of $595 in higher federal taxes in 2011. The same study finds that cutting the child tax credit in half, which is scheduled to take place automatically on the first day of 2011, will cost 31 million families over $1,000 in higher taxes next year. Raising taxes on parents and married couples is no way to jump start our flagging economy. Giving the federal government more rope with which to hang itself will only lead to the further wasting of your hard-earned dollars.
As I engage with residents throughout the Sixth Congressional District, I hear from families and individuals making tough economic choices to cope with the realities of a slow economy. Unfortunately, the current Congressional leadership is spending money at a ferocious pace and looking around ravenously for new sources of revenue. In fact, despite forecasts for above-average tax revenues for the next decade, the President's own Office of Management and Budget (OMB) still reports a soaring deficits in the next 10 years. How do higher tax revenues square with record budget deficits? Uncontrolled spending. Put simply, even with $670 billion in tax increases the last 18 months, spending under this Congress continues to explode at an unsustainable rate.
Congressional Democrats' gaze has already settled on businesses large and small, and now they think it's time for you and your family to pony up in order to continue the spending frenzy. What Washington can't seem to understand is that the surest way to stimulate economic growth and job creation is to keep in place the much needed tax relief of the last decade. Letting families and individuals decide how to spend their own hard-earned income fuels economic activity and consumer confidence.
Eighteen months of stimulus spending and $670 billion in tax increases later, the economic agenda put forth by Democrat Leaders in Congress has not worked. It's time to put our nation's economic health front and center and advance a common-sense agenda of continued tax relief, reining in out-of-control spending, and eliminating the burdensome government regulations that block business growth and job creation with red tape. Keeping taxes lower for all Americans incentivizes the work and investment that will help grow our economy and create new jobs. It is past time to give families and small businesses the tools to flourish and get back on the road to prosperity.