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This Week in Washington: President's Tax Increases Will Not Create New Jobs


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Americans are fed up, and it's no wonder. Unemployment hovers at 9.1 percent nationally and investors feel like they're riding a roller coaster as the stock market rushes up and down at dizzying speeds each time gloomy consumer spending reports are released. Workers and businesses are looking for signs of an agreement to steady the economy and put people back to work, but Washington remains at an impasse.

Many Americans were hopeful when they heard the president's jobs speech earlier this month. While I did not agree with some of his proposals, including a half trillion in new stimulus spending which would do little to stir job creation, he seemed at least willing to consider tax relief for small business and wage earners as well as a curb on job-crushing federal regulations.

Small businesses are the nation's job makers. They more quickly feel the effects of a good or bad economy. They are the first to hire and likely the first to fire. Amid the thick fog of rhetoric hanging over the nation's capital, they are searching for evidence that our leaders finally get the fact that tax hikes and more government regulations are killing their struggling businesses.

It was therefore disappointing to hear the president propose last week a plan to raise taxes by $1.5 trillion all in the name of "fairness." Apparently, the president has changed his mind since August 2009 when he said, "You don't raise taxes in a recession." Mr. Obama says his higher taxes are aimed at millionaires and billionaires who don't pay their "fair share" as compared to the rest of Americans. However, the mainstream media has already called his hand, fact checking his tax plan to reveal that it is based on the false assumption that all higher wage earners are somehow skipping their tax bills. According to the Associated Press, "On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor."

Most Americans rightly agree the wealthy should pay their fair share. There are loopholes in the tax code that must be fixed as a part of a comprehensive package of tax reform. But the president's plan has done little more than create confusion and place yet another roadblock to an agreement with Congress. In reality, the top 10 percent of earners pay nearly 70 percent of all income taxes, and there simply isn't enough revenue from the one percent of the wealthiest who manage to avoid paying their fair share to raise the kind of revenues the president is seeking. His new tax increase would go beyond that one percent, however, hitting small business owners, which file their returns as individuals and thus penalize those who are vital to our economic recovery. The fact is Mr. Obama's take hike on the wealthy would affect over half of U.S. small businesses.

For the record, the House of Representatives has placed on the table a host of ideas to restore business confidence in the economy, including lifting the current federal moratorium on new oil and gas drilling and rolling back enormously expensive new government red tape on business.

We would also like to reform the 13,000 page federal tax code, a long overdue task that would ensure everyone pays their fair share through a new tax structure that is fairly implemented. But the House is only one half of one third of the federal government and we cannot pass our plans into law without the Senate and the president's approval, which, so far, has been missing.

While the president will likely dismiss my calls for more leadership and less gimmickry, he cannot ignore the words of those who decide how many new jobs are created. The National Association of Manufacturers said the president's new tax plan would not help business. "The bottom line is that manufacturers need policies that enable them to hire more workers, make capital investments and expand their businesses. More than 70 percent of manufacturers operate as S-corporations and pay income tax at the individual rate, so higher taxes on those job creators would be a devastating blow."

Honor Flight VI Lands in Washington:

Last Wednesday, 90 South Alabama veterans traveled on a chartered flight from Mobile to Washington, DC to spend the day visiting the national monuments, including the World War II Memorial. For many, it was their first visit to our nation's capital and the Memorial.

It was a moving experience to witness the faces of our veterans as they viewed this grand memorial for the first time. The smiles, the silence and the tears on their faces clearly demonstrated their return to the memories of that challenging time in American history and each of their unique roles in helping to secure our country's final victory. America's heroes finally received the official thank you they missed more than 65 years ago.

My staff and I work for you. If we can ever be of service, do not hesitate to call my office toll free at 1-800-288-8721.

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