Taxes

At a time when Wisconsinites are facing economic uncertainty, a high unemployment rate and an increase  in the costs of living, the last thing our country needs are tax increases.

The unemployment rate in Wisconsin is high at 7.2 percent as of February 2013, while the national unemployment rate is 7.6 percent. As the economy struggles, much focus has been on increasing taxes to address our deficit and our debt.  These tax increases would hit job creators, like those small manufacturers located in industrial parks in our communities, and hard-working families.  Our local manufacturers and families are already forced to live under the strains of the current difficult economy.  Asking them to pay more will hurt our local communities.  What the federal government needs to do is stop spending too much.  It simply can no longer afford to spend money that it doesn’t have and take out more loans to pay for that spending.  Instead of chasing higher spending with ever-higher taxes, Congress needs to make our tax code fair, competitive and simple. Unfortunately, our current tax system fails on these three elements.

Preventing tax increases on 98 percent of taxpayers

On January 2, 2013, taxpayers faced tax increases and automatic across-the-board spending cuts were schedule to take effect as a result of last summer’s debate about raising our nation’s debt ceiling.  These spending cuts, known as sequestration, would have resulted in a 10 percent reduction in Department of Defense programs and an 8 percent reduction in certain domestic federal government programs.  These tax increases and automatic cuts in federal spending were referred to as the “fiscal cliff.”  According to the Congressional Budget Office, going over the fiscal cliff would have substantially reduced the deficit; however, this restrain would have also reduced our nation’s economic growth from 4.4 percent to negative 0.5 percent in 2013, putting us at risk of another recession. Fortunately, there was bipartisan consensus that action needed to be taken.

Recognizing the importance of acting to prevent the expiration of current tax rates, the House passed H.R. 8, the American Taxpayer Relief Act of 2012, by a bipartisan vote of 257 to 167—with my support—on January 1, 2013.  H.R. 8 prevented a tax rate increase on 98 percent of taxpayers and made these lower tax rates permanent so they would not expire again.  H.R. 8 also makes permanent 97 percent of the tax relief provisions for small businesses enacted in 2001 and 2003.  Without Congressional action to address this issue, the American people would have been hit with a $4.4 trillion tax increase; instead revenues will increase by $600 billion.  In the end, the choice presented to Members of Congress was to either raise taxes by $4.4 trillion or by $600 billion—I voted for the latter.  This bill also delays the Fiscal Year 2013 sequestration for two months, giving Congress the opportunity to focus the nation’s attention on the fact that we are spending more money than we have.

While not perfect, I supported H.R. 8 because this legislation prevents tax increases on 98 percent of taxpayers, or 114 million households, and delays the automatic across-the-board cuts to our armed forces and key priorities.  The House had already passed legislation to prevent tax increases for every American family, and it is unfortunate that President Obama insisted on taking more from hardworking taxpayers.  In addition, the House also passed legislation to replace the sequester with reasonable spending reductions, such as stopping fraud by eliminating government slush funds, putting an end to bailouts, and reducing waste and duplicative programs.  Regrettably, the Senate failed to take action on this alternative to sequestration.

Despite my concerns with other provisions in the bill, I commend my colleagues for limiting the damage as much as possible.  At a time when families and small businesses are facing high gas prices and overall increases in the cost of living, the last thing taxpayers need right now or in the future is a tax increase.

Now, we must return our attention to the real problem: Washington’s out-of-control spending.  This reckless spending drives the debt.  And this debt is hurting the economy today.  Unless the President gets serious about tackling spending, Americans will face a debt crisis—one that will threaten our most vulnerable in particular.  I am hopeful the President will come around and agree to meaningful spending cuts and reforms which are critical if we are going to avert the debt crisis and get the economy growing.  I have introduced several budgets that would get government spending under control and will continue putting forth my detailed solution in the upcoming budget this year.

The President’s budget proposal for Fiscal Year (FY) 2013

At a time when strong leadership is needed in the White House, President Obama’s proposed budget, in the words of The Washington Post, “falls short.” Failing to heed the warnings of economists and the concerns of our fellow Americans, the President’s budget accelerates our country down the path to bankruptcy. The House voted on President Obama’s budget proposal for FY2013, and unanimously rejected the President’s proposal, by a vote of 0 – 414, a clear indication that Republicans and Democrats alike did not believe the President put forth a credible plan to address America’s challenges.

No Budget, No Pay Act of 2013

Looking ahead to the President’s budget proposal for FY 2014, on January 14, 2013, the White House announced that it will not meet the statutory deadline of submitting its budget proposal to Congress by February 4.  The President has only met this deadline once since taking office.  This, combined with the Senate’s refusal to comply with the statutory requirement to pass a budget for nearly 4 years is a true failure of leadership.  To bring these failures to an end, the House passed H.R. 325, the No Budget, No Pay Act of 2013 by a vote of 285 to 144.  This legislation allows the Treasury to borrow to only pay its bills coming due until May 18, 2013.  At the end of that period of time, the debt limit would be increased by the amount that was borrowed to pay the government’s bills until May 18, 2013.  It also requires both houses of Congress to pass a budget as stipulated by federal law.  Under this bill, if either the House or Senate fail to pass a budget, its members’ pay will be withheld.  H.R. 325 is currently pending in the Senate.

I voted in favor of this bill because every family sets a budget to pay its bills.  Congress should do the same.  The House will comply with the budget law and we will not consider another debt-ceiling increase unless the Senate passes a budget.  The House will not just keep raising the debt ceiling either.  We need to take this opportunity to make a down payment on our debt reduction and point our country in the right direction.

Path to Prosperity

House Republicans have pledged to lead where the President has failed.  The budget advanced by the House of Representatives on March 29, 2012 helps spur job creation, stops spending money the government does not have, and lifts the crushing burden of debt.  The Path to Prosperity cuts more than $5 trillion in spending from the President’s budget over the next 10 years, putting the budget on the path to balance and the economy on the path to prosperity.  Specifically, the budget:

  • Restores Economic Freedom – The Path to Prosperity fosters a better environment for private-sector job creation by lifting the debt-fueled uncertainty and advancing pro-growth tax reforms.
  • Changes Washington’s Culture of Spending – The budget stops Washington from spending money it does not have on government programs that do not work.  It locks in spending cuts with enforceable spending controls.
  • Strengthens Health and Retirement Security – The budget puts an end to empty promises from Washington, offering instead real security through real reforms.  The framework established in this budget ensures no disruptions to existing health and retirement benefit programs for those beneficiaries who have organized their retirements around them, while at the same time building stronger programs that future beneficiaries can count on when they retire.
  • Provides for the Common Defense – With American men and women in uniform currently engaged with a fierce enemy and dealing with emerging threats around the world, this budget takes several steps to ensure that national security remains the Federal  government’s top priority, including the rejection of proposals to make thoughtless, across-the-board cuts in funding for national defense.
  • Lifts the Crushing Burden of Debt – The budget tackles the existential threat posed by rapidly growing government and debt, applying the nation’s timeless principles to this generation’s greatest challenge.  It ensures that the next generation inherits a stronger, more prosperous America.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s