Next week, the U.S. House of Representatives will likely vote on extending the current income tax rates for one year. Set to expire this December, these tax rates were established in 2001 and 2003, and most recently signed by President Obama in 2010.
Personally, I don't like debating one-year extensions when businesses, families and our economy need certainty in the tax code. Tax reform is long overdue, and I would prefer a long-term, bipartisan agreement to make the tax code simpler and more fair for everyone. However, here's the choice that's being presented to us in Congress: allow the rates to go up with the result being one of the largest tax increases in U.S. history, or stop the tax hike. Given these choices, I'll vote to protect Southwest Washington taxpayers from having to send more money to Washington, DC. I fear that raising taxes would trample any progress we've made toward economic recovery.
Every single day, I talk to folks in Southwest Washington who are barely getting by in this difficult economy. Neighbors, friends, and close family members of mine have been without work – some for a year or more. It's why I've made job growth my number one priority. It's also why I heed economists' warnings that allowing this tax increase would help drive us back into deep recession.
I recognize that there is some support for a third option of raising taxes on $250,000-and-above earners only. Aimed at "tax fairness," this proposal would unfortunately wreak massive harm on small businesses across the nation. The National Federation of Independent Business (NFIB) has found that 3 out of every 4 small businesses file their taxes on individual returns.
Who are these small businesses? At a job creator roundtable discussion I hosted, Eric Golemo who owns SGA Engineering & Design in Vancouver told me that some years, his small business brings in more than $250,000. But that money is used to pay business expenses and make investments in his operations, leaving him with a fraction of that amount to actually take home. Other small businesses around the table also described how their business would be similarly hurt by this tax increase proposal.
A new study by independent auditing firm Ernst & Young further revealed that even the partial tax increase proposal would hit 900,000 small businesses, causing our economy to bleed 710,000 jobs. More businesses would shut their doors, and more moms and dads would be out of work. I won't vote to let this happen.
Again, I will have two choices: vote to raise taxes during a recession, or stopping the tax hikes. I will vote to protect citizens of Southwest Washington. If Congress doesn't act, a single mom making $36,000 would have to set aside $1,100 more each year to pay her taxes. A family of four earning $55,000 would have $2,200 less to buy food and pay the bills. We can't let that happen.
We face major budgetary and economic issues in this country. Both parties spent too much money and contributed to our $16 trillion debt. It will take both parties coming together to solve these problems. I will urge my colleagues to stop the tax hikes from occurring in the short-term, and in the longer-term focus on a comprehensive restructuring of our tax code to make it simpler and fairer for individuals and small businesses. When we do, we will clear a major hurdle to the economic recovery Southwest Washington so badly needs.
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