The last thing Wisconsinites need right now is higher taxes. Yet, if we let the 2001 and 2003 tax cuts expire on January 1, that’s exactly what we will get. Parents, workers and married couples will all see increased taxes and earned income, dividends, capital gains and estates will be taxed at a higher rate to the tune of $200 billion.
The expiration of these cuts will hit Wisconsinites especially hard, as we are one of the highest taxed states in the country. Furthermore, as President Obama and Democratic leaders in Congress seek to impose additional taxes on healthcare, energy use and even soda, costs to Wisconsinites will soar even higher added expenses they can ill-afford.
The President’s July 19 unemployment press conference, where he highlighted individuals who have been unemployed for an extended period of time, was a clear indication that his stimulus failed. The only thing it has grown in Wisconsin is the length of unemployment line.
Since the stimulus passed, Wisconsin has lost 73,000 jobs and the state unemployment rate hangs around 8.2 percent. More government spending to create more government jobs to make more "stimulus dollars at work" project signs is not the answer.
Government jobs eat tax money. Private sector jobs provide tax money.
Private sector jobs also create employment and generate wealth. This means the government can’t be the center of our economy. The government can’t spend its way to a better economy- as they tried with the stimulus 16 months ago. And look what that trillion dollars got us – nationwide unemployment soared beyond the promised peak of 8 percent and continues to hover near 10 percent, the total number of jobs has decreased, and our economy is more destabilized as our level of debt skyrockets. We tried the Democrat’s method. It didn’t work.
It’s time for a new approach. Republicans in Congress are working hard to prevent more money being taken out of your pocket by extending the 2001 and 2003 tax cuts. We saw with President Reagan in the 1980s and later with the Contract with America that tax cuts work.
I’m not saying tax cuts are the end-all-be-all solution to our economic woes, but they do offer a positive new start to turning this economy around and providing some certainty in a time of economic uncertainty. To you and I, tax cuts seem like common sense, but not everyone in Congress sees it that way.
While this Congress has approved billions of dollars in wasteful spending bills that have grown government, it has yet to consider any legislation to renew these essential tax provisions. With our nation hurting, Congress should not wait any longer.
This past Tax Day, I said that no company is going to invest more money on new employees when they don’t know what higher taxes, added regulations and increased mandates the government will impose next. Companies that want to survive for the long run understand that they need to protect their rapidly shrinking bottom line. Consumer confidence is down and businesses are holding onto their money because they are nervous about more government policy and potential for another economic dip.
If the President and Congress really want to have a positive impact, they should motivate these companies and help restore some of their confidence by offering them tax relief immediately, and tax relief that they can count on for the next several years as they look at their books and budget.
We need to extend these tax cuts to help our economy. With all this government spending in the name of economic recovery, the International Monetary Fund projects that in the next 18 months, our debt will surpass our GDP, and according to the Congressional Budget Office, our debt-to-GDP ration will pass Greece’s 113 percent in 16 years. This saddles the next generation with red ink, and will likely crash our economy before then.
These issues are too important to cast aside in favor of pushing through an agenda that has proven to be nothing but a hindrance to job creation and economic growth. Extending these tax cuts and slowing government spending and regulating is a needed first step in offering confidence to investors. And it’s a step we need to take now.
U.S. Rep. F. James Sensenbrenner, R-Menomonee Falls, represents Wisconsin’s fifth congressional district.
