“NO” on Kick-the-Can Tax Increase
The House and Senate are expected to vote on a modified version of H.R.8. Although final details are not yet available, the agreement would reportedly raise taxes by more than $600 billion by increasing tax rates on incomes over $400,000.
This kick-the-can approach, necessitated by a president who refuses to stop campaigning and start seriously addressing our nation’s fiscal problems, is not an adequate solution to America’s coming fiscal crisis, which is a result of overspending, not under-taxing. Allowing a tax increase to hit a certain segment of Americans and small businesses is not a solution; when combined with the coming Obamacare tax increases, it all but ensures a weaker economy.
As Heritage has explained, decoupling the 2001 and 2003 tax cuts “constitute[s] a clear path toward surrender on conservative principles.” It would also ensure that during the next stage of negotiations – the debt ceiling – President Obama would get this tax increase “for free” while he continues to negotiate even higher taxes on the American people.
To be clear, this is a tax increase. In 2013, the top marginal rate, death tax, and taxes on long-term capital gains and dividends will all be higher than in 2012. Comparing tax rates to hypothetical rates that have hardly any support is nothing more than misleading Washington spin.
In addition to increasing taxes, the emerging deal contains a host of other provisions, the details of which have yet to become public. Based on the information available, it appears there will be substantial conservative concerns with these provisions as well.
Regardless of those provisions, it is clear that Washington continues to fail the American people. America needs less spending, less taxing and less borrowing by our government, which would allow more investment and job-creation by America’s private sector economy.
To date, President Obama has proven to be fundamentally unserious about tackling our nation’s coming fiscal crisis. America needs real leaders proposing real solutions, such as those found in Heritage’s Saving the American Dream plan or even the previous House-passed budget. This kick-the-can approach falls woefully short.
Heritage Action opposes the kick-the-can tax increase and will include it as a key vote on our legislative scorecard.