In the Spotlight: Extend tax cuts, then restructure the tax code
Jul 14, 2012 -
By: Congressman Aaron Schock
Posted Jul 13, 2012 @ 11:05 PM
PEORIA —'I personally don't believe we ought to be raising taxes"
"You don't raise taxes in a recession, which is why we haven't and why we've instead cut taxes ..."
"The real risk to this economy is on the side of slowdown . . . and that means we've got to make sure that we don't take gasoline out of the tank at the end of this year."
If you thought these quotes regarding the extension of the current tax rates were from a Republican, I wouldn't blame you. They're from former President Bill Clinton, President Barack Obama and former White House economic adviser Larry Summers.
The debate centers around what to do with the 2001 and 2003 tax rates, first passed under President George W. Bush and extended in 2010 for two years by President Obama with the support of 91 sitting House Democrats and 39 Democratic senators. The uncertainty over these tax rates, which expire at the end of the year, has paralyzed small businesses and slammed the brakes on private-sector job creation.
President Obama supports tax increases on everyone who makes $250,000 and up. He advocates increasing taxes to the levels under former President Clinton, a position Clinton himself doesn't support.
President Obama claims his tax hike only affects 3 percent of Americans. But according to the nonpartisan Joint Committee on Taxation, that translates to nearly 1 million profitable small businesses that are in a position to grow and hire. The Small Business Administration states that small firms accounted for 65 percent, or 9.8 million of the 15 million net new jobs created between 1993 and 2009. With 41 consecutive months of unemployment at or above 8 percent, this is not a wise course of action.
There is a better approach. I've been advocating for the extension of current rates for one year to provide certainty for individuals and small businesses. During that year, the House Ways and Means Committee on which I serve can continue to move forward with comprehensive tax reform that sets the stage for private sector economic growth. These reforms include a top corporate tax rate of 25 percent and going from six to two tax brackets for personal income: 10 and 25 percent. We can throw out the 70,000 pages of tax code, no longer have the world's highest business tax rate and make the tax code fairer and simpler. By eliminating loopholes, we ensure all Americans pay their fair share of taxes for living in the greatest country on Earth.
After 23 hearings, Democrats and Republicans on the Ways and Means Committee agree that these changes will ignite economic growth.
The tax code was last reformed in 1986, under the leadership of President Reagan and stewardship of Democratic Speaker Tip O'Neill. What followed was a sustained period of economic prosperity. Nearly 30 years later, we find the same divided government and the same stagnated economy. We should aim that high again.
Aaron Schock represents Peoria as congressman for the 18th District.
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