Revenues Aren’T The Problem; Spending Is The Problem

Advertisement

Americans all recognize certain dates. We know Jan. 1, July 4, Dec. 25, to name a few.

And then there’s April 15: Tax Day.

It tells us a lot that Tax Day is so firmly ingrained in our national consciousness; but it’s no surprise. Americans pay a lot of their hard-earned money to Uncle Sam every year. In fact, this year, Americans had to work until April 9 — Tax Freedom Day — just to earn enough to pay their federal, state and local taxes, according to the nonpartisan Tax Foundation.

If Americans have to work more than three months just to pay their yearly taxes, that ought to be enough. But unless Congress acts, the lower tax rates that have been in place since 2001 will expire on Dec. 31, triggering close to a $3 trillion tax increase over the next decade. The marriage penalty will reappear in full force. The child tax credit will be cut in half. Income-tax rates for all taxpayers (including small businesses) will increase, with the 10 percent rate on those in the lowest tax bracket alone set to increase by 50 percent. A family of four earning $40,000 a year would owe an additional $2,053 in taxes. These tax increases would only prolong the economic harm, adding to the strain already felt by families and business.

Then there’s the Democrats’ new health care law, which adds more than $500 million in new taxes. To collect some of that revenue, Washington will have to hire an estimated 16,500 IRS agents.

And Democrats are talking about even more new taxes. Their cap-and-trade energy plan could impose anywhere from $600 billion to $2 trillion in new taxes over the next decade. And Paul Volcker, whom President Obama tapped to lead the Economic Recovery Advisory Board, recently touted a value-added-tax (VAT), a kind of national sales tax that is popular in Europe. A VAT would be added on top of our current taxes, making our tax burden even more onerous.

All of these new taxes would mean that Americans would have to work even more to pay their share of taxes. In European nations, where the tax burden is already high and many nations have instituted a VAT, taxpayers work almost half a year to pay their taxes. A British think tank found that, in 2009, British taxpayers had to work until the middle of May. In Belgium, the accounting firm Pricewaterhouse-Coopers estimated Tax Freedom Day fell on June 8 in 2009.

When taxpayers have to send that much of their earnings to the government, there’s less left over for families and businesses to save and invest. As a result, the economy suffers, as increased taxes force businesses to pay more to the government instead of creating new jobs. Our nation has lost a lot of jobs — almost 4 million this year alone. Now taxes would simply add to the unemployment.

Some argue that Americans will have to pay more taxes in order to pay off the nation’s soaring debt, but Americans already pay enough in taxes. Revenues aren’t the problem — spending is the problem. On Tax Day 2010, Congress should commit to stopping the spending and building a prosperous future for our children and grandchildren.

Sen. Jon Kyl is the Senate Republican Whip and serves on the Senate Finance and Judiciary committees. Visit his Web site at www.kyl.senate.gov.

Comments

Use the comment form below to begin a discussion about this content.

Requires free registration

Posting comments requires a free account and verification.