Following President Obama's speech, U.S. Sen. Mike Johanns (R-Neb.) today said all current tax rates should be extended before the end of the year to give Congress time to reform our nation's tax code.
"Republicans, Democrats and the President said raising taxes during a slow economy was a bad idea two years ago, and I believe it's still a bad idea now," Johanns said. "Until we reform our tax code, we should agree to extend all current rates so businesses have the certainty they need to hire and expand."
When the current tax rates were extended for two years in 2010, the nation's gross domestic product (GDP) had grown 3.1 percent over the previous four quarters. Today, GDP has grown at just two percent during the past four quarters.
The President today called for extending only some of the current tax rates. This would result in tax hikes on approximately 940,000 businesses -- including many small businesses -- classified as flow-through businesses, according to the Joint Committee on Taxation. The National Federation of Independent Businesses estimates nearly a quarter of the American workforce is employed by businesses impacted by this proposed tax hike.
Both the current and former Senate Budget Committee chairmen, Sens. Kent Conrad (D-N.D.) and Pete Domenici (R-N.M.), and Alice Rivlin, budget director under President Bill Clinton, have said current tax rates should be extended while Congress works to reform the current tax code.