Over the past several months I have become severely disappointed and frustrated by the failure of the Senate majority and the president to make any effort whatsoever to work with House Republicans to stop the massive tax hikes scheduled to take effect in January, 2013. Failure to not extend the current tax law will result in tax hikes on our citizens and job creators.
That is why last week, I voted for the Job Protection and Recession Prevention Act of 2012 to prevent such a tax hike on hard working Americans and to allow people like you to keep more of your hard-earned dollars. This is a tax hike that will impact individuals, small businesses, families with children, married couples, and adoptive parents just to name a few. I believe that you shouldn't be forced to pay higher taxes at a time when you're already struggling to pay your bills in this economy which is staggering. We know that higher taxes mean fewer dollars with which to hire people, and with the job market already weak, that leads to a recipe for economic disaster. Unfortunately, the president and his allies in the Senate have made it clear that they want to raises taxes on small businesses and job creators in order to finance troubling and expensive programs like Obamacare.
A new report released by the accounting firm Ernst & Young found that the president's tax increases would hurt the economy and take away more than 710,000 American jobs, of which 14,500 would come from Missouri. The report found that wages would fall by 1.8 percent, reflecting a decline in workers' living standards. Additionally, the report found that in the long-run output would fall by $200 billion in today's economy and capital stock and investment would fall by 1.4 percent and 2.4 percent, respectively. As I mentioned in this column a few weeks back, the average tax filer in Missouri's 9th District will face $2,424 in higher taxes on January 1, 2013 if Congress and the president do not act.
At the end of the day, most of the people I talk to here at home in Missouri understand that the federal government cannot help job seekers by punishing job creators, especially small businesses, which in the last 17 years have created 65 percent of the jobs in the country. We also understand that there is a clear need for tax reform, and last week the House passed legislation to tackle our complex tax code that discourages American families from saving and investing and disadvantages American small businesses when competing in the global marketplace.
The Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012, which I also supported, would require the House and Senate to consider legislation containing the following principles for tax reform included in the last two House-passed budgets. This bill would include a consolidation of the current individual income tax brackets into not more than two brackets of 10 percent and not more than a top rate of 25 percent, reduction in our highest in the world corporate tax rate to not more than 25 percent; repeal of the Alternative Minimum Tax; and broadening of the tax base to maintain revenue between 18 and 19 percent of the economy.
Most folks I talk to understand that long-term lower tax rates allow families to better manage their budgets and make investments for their future, whether it is for their children's education, a new home, or their retirement. They also understand that lower rates allow entrepreneurs and small businesses to hire more employees and grow their businesses in order to compete in a free market and invest in new technology and research from which all Americans could one day benefit.
We are on the precipice of some difficult decisions which will determine whether we can turn our economy around or face the prospect of becoming a European-style state mired in massive debt, facing historic unemployment and an uncertain economic future. I look forward to hearing from you on this issue so I can take your message back to Congress as we seek to get our nation's fiscal house back in order.