In 2001 and 2003, Congress enacted significant tax cuts, known as the Bush tax cuts, including but not limited to--decreasing marginal income tax rates, providing relief from what is known as the "marriage penalty," increasing the child tax credit, reducing tax rates on long-term capital gains, unifying qualified dividend rates with long-term capital gains rates, relief from the alternative minimum tax (AMT), and phasing out the death tax. Unfortunately, even with a Republican president and Republican majorities in the House and Senate, lawmakers were unable to make these changes to our tax code permanent, and after a short-term extension, they fully expired on December 31, 2012.
The expiration of the Bush tax cuts would have taken $4.6 trillion out of the pockets of American taxpayers over the next 10 years and untold trillions beyond that. Make no mistake, President Obama wanted the Bush tax cuts to fully expire, and then, after blaming the ensuing economic fallout on Republicans, scoring some political points, and grabbing trillions of dollars in new revenue for his agenda, President Obama might have considered lowering taxes for a few categories of his choosing at a later date. This very real scenario was unacceptable to me as a conservative, as a businessman, and as a representative of the people of Missouri.
To be sure, my preference would have been to make all of the Bush tax cuts permanent, reform entitlements, and achieve real spending cuts--things I have consistently voted for in Congress--but this was not the choice put before the House on January 1, 2013. The choice we were faced with was whether or not to support an imperfect solution that would not address spending but would make permanent the expired Bush tax cuts for 99 percent of taxpayers--something that Republicans could not accomplish while in the White House and with majorities in Congress in 2001 and 2003--or to oppose this imperfect agreement because of its shortcomings. Had we allowed the Bush tax cuts to expire, it would have handed President Obama $4.6 trillion more of your money to spend, weakened our economy, and cost our country hundreds of thousands of jobs.
This was a tough choice and my constituents argued for the bill just as strongly as they argued against it. Permanently protecting taxpayers and saving hundreds of thousands of U.S. jobs to me was worthy of a vote and outweighed the many aspects of this agreement that fell short. H.R.8 permanently protects family farms and small businesses by stopping the death tax from reverting to its pre-Bush tax cuts levels of only a $1 million exemption and a 55 percent tax rate; it permanently indexes the AMT exemption to inflation which would save approximately 25 million middle-class taxpayers from an unexpected tax increase; it permanently protects investments and retirement funds from a volatile stock market by lowering long-term capital gains and dividend rates; and most importantly, it allows every American to keep more of their hard-earned money that would have been subject to higher taxes should H.R.8 not have been passed. I believe the money in your pocket belongs to you, not the government. Some may disagree that the good outweighed the bad in this bill; I respect their opinions, because after all, good, patriotic conservatives can disagree.
The fact of the matter is the fiscal negotiations in Washington are not over. Rather, they have just started. Congress will need to address the debt ceiling before mid-February when we reach our current $16.4 trillion borrowing limit, the across-the-board sequestration cuts are set to go into effect on March 1st, and annual federal government funding will expire on March 27th. By permanently locking in the Bush tax cuts now, we have eliminated the president's ability to use the threat of taxes as a bargaining chip in order to avoid cutting the size and scope of our government. Now, we can focus on the true problem that threatens our country: excessive spending. In the fiscal discussions that Congress will address in the coming months, I am dedicated to fighting for significant spending cuts and controls, and to reforming the entitlement programs that are consuming a continually larger portion of our budget and are the true drivers of our debt.
In addition, making the Bush tax cuts permanent now provides families and businesses with much needed certainty and better protects and prepares taxpayers and the economy for the impacts of the upcoming across-the-board spending cuts; other major, necessary spending cuts, controls, and reforms we hope to win; and a possible shutdown of the government should President Obama refuse to join us in getting our out-of-control deficits under control and we refuse to raise the $16.4 trillion debt limit.
Again, I must stress that H.R.8 was not even close to my idea of a perfect package, but I believe it was necessary to protect taxpayers and jobs that would have been lost from going over the fiscal cliff, to remove the tax debate from future negotiations, and enable the economy to better withstand the upcoming hit of spending cuts and possible shutdown of the government.
The solutions to our problems are going to be painful. My preference is that everyone shares in the pain through the spending cuts rather than only those who pay taxes.
CONTACT US: As always, for those of you with Internet access, I encourage you to visit my official website. For those without access to the Internet, I encourage you to call my offices in Jefferson City (573-635-7232) Washington, Mo. (636-239-2276), or Wentzville (636-327-7055) with your questions and concerns. If you want even greater access to what I am working on, please visit my YouTube site and my Facebook page.