Senator Dan Coats (R-Ind.), a member of the Joint Economic Committee, today made the following statement on a new report by Ernst & Young confirming that President Barack Obama's small business tax hike would kill jobs and hurt the economy.
"This report confirms that this administration's plan to raise taxes on small businesses will do nothing to create jobs or generate economic growth," Coats said. "Instead President Obama's tax hikes will devastate our economy in the middle of a recession. Job creators in Indiana and across the nation want to focus on running their businesses, not finding ways to scale back to pay for the Obama administration's tax hikes."
The new study found that the president's proposed tax hike on nearly one million businesses would slash over 700,000 jobs, shrink the economy by 1.3 percent, reduce investment by 2.4 percent and cut wages by nearly 2 percent. According to the report, Indiana would lose $3.7 billion in economic output and 15,400 jobs.
In 2010, President Obama signed a two-year extension of all existing tax rates and stated that it was important to not raise taxes during a slow economy. At that time, the economy was growing a 3.1 percent. Today the economy is weaker and growing at an even slower 2 percent rate.
"In 2010, the president said that increasing taxes "would have been a blow to our economy,' but today, in worse economic conditions, he is ready to hike tax rates and punish small businesses," added Coats. "Rather than pushing this misguided plan, the administration should start working with Congress on comprehensive tax reform, a proven way to encourage economic growth, create more American jobs and make our country stronger in the global marketplace."
Since Coats returned to the Senate, he has urged Congress and the administration to pass comprehensive tax reform. Last year Coats and Senator Ron Wyden (D-Ore.) introduced the Bipartisan Tax Fairness and Simplification Act, legislation that would simplify both individual and corporate tax rates, provide tax relief to the middle class and encourage businesses to grow and invest in the United States.