Don’t mess with success

Despite campaign promises not to raise taxes, the new Democratic majority's budget fails to keep existing tax policies in place, which amounts to a $900 billion tax hike over five years, the largest tax increase ever, say Senators Judd Gregg (R-N.H.) and Chuck Grassley (R-Iowa).

For instance:

  • Under a Democratic budget that does not extend existing tax policies, the lowest-income families who pay taxes will see their taxes increase by 33 per cent.

  • The $1,000 per child tax credit would be cut in half, and the standard deduction for married couples would be cut by $1,700.

  • Forty-five million working families with two children would pay $3,000 more in taxes per year, equivalent to a 5 per cent pay cut.

    In addition to taking more from hard-working families, that tax hike would serve to slow the economy, suppressing investment and job creation, becoming a noose around the neck of the economy. It would also dampen the positive impact that the tax cuts have already had:

  • Since 2003, more than seven million new jobs have been created – and at 4.5 per cent, the unemployment rate is below the average of the past three decades.

  • The U.S. economy is experiencing five uninterrupted years of growth, and since the tax cuts of 2003, the rate of economic growth has more than doubled.

  • Real wages and benefits have increased 7.5 per cent under President George W. Bush, compared to 6 per cent under President Bill Clinton during the first six years of their respective presidencies.

    Despite false accusations that tax relief has benefited only the top wage-earners, it is worth noting that high-income taxpayers bear a greater burden of the total tax payments now compared to the Clinton years. Meanwhile low-income taxpayers' burden has decreased to 10 per cent from 15 per cent.

    Source: Judd Gregg and Charles Grassley, Don't Mess With Success, Wall Street Journal, March 15, 2007.

    For text:

    For more on Taxes:

    FMF Policy Bulletin/ 20 March 2007
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