If Congress fails to act, Americans will face a $494 billion tax increase -- the highest ever in one year -- on January 1.
What has been referred to as Taxmageddon might better be labeled "Jobsmageddon" because every dollar taken away from individuals and small businesses is a dollar that cannot create new private sector jobs. The Heritage Foundation recently released an extensive study on the overall impact of Taxmageddon, as well as its specific effects on individual states and Congressional districts. Based on the roughly $68,000 price-tag of one new private sector job, the $494 billion tax increase amounts to the potential loss of 7.3 million private sector jobs and 3.2% of the overall economy.
While job losses will vary across states, Jobsmageddon will be especially hard on states already pressed for cash. California, for instance, will suffer a $61.9 billion tax increase, roughly equivalent to 910,000 jobs and 3.2% of their economy. New York will take a $38 billion hit, equal to about 560,000 jobs and 3.3% of their economy.
Additionally, Florida would lose $34 billion, equal to 505,000 jobs and 4.6% of their. My home state of South Carolina would see a $6 billion tax increase, equal to 88,000 jobs and 3.6% of the state's economy.
With an unemployment rate at or above 8% for a record 40 consecutive months and the labor force participation rate near a 30-year low, Jobsmageddon could send our already feeble economy into recession.
Here in Washington, both sides of the aisle say that creating jobs should be our number one priority. But those jobs aren't created by tax increases. Washington cannot create jobs -- instead, it can only create a conducive environment for job creation.