As summer gets underway, I am reminded of the looming tax hikes and the looming fiscal fight, otherwise known as "Taxmaggedon" in the media and in Washington, that are set to hit hard-working Americans like you starting in 2013. In addition, Congress will have to tackle automatic cutbacks to defense spending, an expiring payroll-tax break and the rising estate tax. These increases would take place if Congress allows current tax cuts to expire at the end of the year. In my view, we must act well before that.
Raising taxes amid an economic downturn could plunge the country back into recession and only saddles families with more uncertainty. Small businesses, too, cannot afford more taxes at a time when they are working to invest and grow our nation's economy -- and are struggling under the weight of increased regulations handed down by the administration. Even former President Clinton recently suggested that lawmakers "avoid anything that would contract the economy now." As your representative in Congress, I have supported more than 30 bills currently awaiting Senate action that hold the line on taxes while creating economic opportunities for small businesses, which, in turn, will result in job creation. In order to get the tax cuts reinstated, the House may have to compromise with just an extension in order for the Senate to take action because as it currently stands the Senate continues to refuse to act on these job creating bills.
As it stands, failure to maintain the current tax cuts would be devastating to our economy. A recent study found that letting the current tax cuts to expire would increase taxes paid by all Americans by $494 billion. Right here in the 9th District, the average increase per tax return would be $2,424.
With unemployment above 8 percent, where it has been for a record 40 months, it would be irresponsible to raise taxes on you and your neighbors. In fact, if the 2001 and 2003 tax cuts are allowed to expire, it would represent the largest tax increase in American history. Even credits, such as the child tax credit, earned income tax credit and education incentives, would be phased out if Taxmaggedon occurs at the beginning of the year.
In light of these startling facts, I have voted in support of recent legislation, the Small Business Tax Cut, which would enable small businesses with fewer than 500 employees to use extra capital to invest, grow and create more jobs through a 20-percent tax deduction. I have also cosponsored the Tax Code Termination Act, which would make any new federal tax system that is introduced simple and fair; apply a low rate to all Americans; and provide tax relief for working Americans. The tax code needs to be fair, competitive and simple. Congress also needs the tax cuts to be permanent to add certainty to businesses and families. Unfortunately, our current tax system fails on all three of these elements.
We need a tax system that rewards Americans like you for hard-work, entrepreneurship and innovation. These ideas made America great in the past and they are exactly the kind of ideas needed going forward if we want to grow our economy in the future and compete in the global economy. The end of the year is shaping up to be a battle as the tax cuts teter on extinction.
Rather than wait until the last minute, it is important that the House and Senate come together as soon as possible to vote on legislation to prevent the largest tax increase in history, and I am eager to stand up for America's taxpayers by supporting an extension of the tax cuts so we can avoid tax increases at a time Americans can least afford it.