Douglas Elmendorf, the non-partisan Congressional Budget Office director, recently told the House Budget Committee something we Nebraskans know well: higher marginal tax rates do reduce economic activity to some extent by views of most economists. Obviously, reducing economic activity is not a solution to our economic woes, so neither is a tax hike.
President Obama previously acknowledged adding more taxes during an economic downturn are not prudent. During a 2009 visit to Indiana, he said you don't raise taxes in a recession. Unfortunately, his statements in recent days are much different.
President Obama's repeated demands for Congress to approve new taxes as part of negotiations to increase the debt ceiling represent a misunderstanding of the real cause of our budget and economic problems. Instead of cutting spending and getting our fiscal house in order, the President wants to impose trillions more in taxes on job creators to pay for out-of-control spending.
Raising taxes during a recession is not a strategy for recovery. Penalizing the job creators we need to hire more workers is a step backward on the path to economic recovery. With unpredictability about future tax burdens, those who would build businesses and expand employment hold back. They cannot be expected to grow their operations through investment in new products with the threat of tax increases factoring into business decisions.
Excessive regulations, overwhelming national debt, and out-of-control government spending already are enough disincentives for businesses to invest and grow. Increasing taxes only would deepen those hindrances to job growth.
To truly get our economy working again, Washington must not raid the pocketbooks of the very individuals we need to take risks, start and grow businesses, and create jobs. In order to foster economic growth, uncertainty must be removed from the marketplace by cutting spending and removing the threat of new taxes and regulation. Entrepreneurs need the opportunity to do what they do best create jobs instead of fear an overbearing, burdensome government.
Many people across the Third District have shared with me their phone calls, emails, and comments which make it clear tax hikes are not the answer, and the vast majority of Americans agree. According to a recent national survey by Rasmussen Reports, Americans oppose including tax hikes in negotiations to increase the debt ceiling.
In addition to preventing tax increases, we also must remain committed to tax reform which rewards hardworking Americans, not Washington's addiction to spending. It is time for a system which is fairer, simpler, and removes barriers to job creation. As a member of the Committee on Ways and Means, I will continue to work to achieve comprehensive, fundamental tax reform to get our nation back on a path to prosperity.