Senate Republicans are open to supporting White House proposals to expand business tax credits for research and development but not before Congress decides to extend the Bush tax credits that will expire at the end of the year, U.S. Sen. Lamar Alexander said Tuesday.
Alexander, the chairman of the Senate Republican Caucus, told the Chattanooga Pachyderm Club that taxes shouldn’t be raised during a recession, even on wealthy Americans whose small businesses hire most workers.
“The first thing we need to do is to make sure that we don’t raise taxes” by allowing the Bush tax credits to expire at the end of the year, Alexander said. “That is going to take most of September. Then we can turn our attention to seeing if we have money to reduce taxes.”
In a speech planned today in Cleveland, Ohio, Obama will ask Congress to let businesses quickly write off 100 percent of their spending on new plants and equipment through 2011. The move is the latest by the White House to help spur an economy that is expected to take years to regain most of the jobs lost over the past three years.
Alexander said he has supported such R&D investment credits in the past. But Tennessee’s senior senator said the best way to revive the economy is to lower taxes and the deficit and provide a more stable environment for all businesses.
President Obama has “put a wet blanket” on job creation with the health care reforms, financial regulations and higher taxes planned in the next year, Alexander told the GOP luncheon club at the DoubleTree hotel downtown.
Alexander said the health care legislation “rammed through Congress in the cold of Christmas Eve” will raise the tax burden on many small businesses who hire most American workers. The extra taxes and compliance costs for health care and Wall Street reform measures adopted this year are making businesses more uncertain about their future, especially with the prospect of new energy regulations and easier unionization rules.
Alexander said the stimulus legislation written in 2009 by congressional Democrats is driving up federal deficits but not promoting enough job growth.
“It was a spending bill, not a stimulus bill,” Alexander said.
The tax cuts on capital gains and marginal income adopted when George Bush was president are scheduled to expire at the end of the year. Obama has proposed extending the tax credits, but only for those making under $250,000 a year.
Alexander said half of jobs created by small businesses come from companies whose income tax would be raised in January under the White House’s plans.
Tennessee Democratic Party Chairman Chip Forrester said the U.S. economy has added private sector jobs for the past eight months after falling for the previous 22 months.
“Unfortunately, there is not a single Republican that has supported any measure to bring the country out of the worst economic crisis that we have experienced since the Great Depression when the Republicans drove the economy into a ditch,” he said.
If tax cuts are the answer to creating more jobs, why hasn't the stimulus plan and other fiscal policies helped create jobs? Alexander denounces the stimulus plan even though it included nearly $247 billion of tax cuts, including many targeted for small businesses. At the same time, the estate tax was eliminated this year for the first time in my lifetime. With corporate profits down, business tax payments dropped in 2009 and taxes as a share of GDP also fell. Yet, Alexander and other Republicans keep blasting the stimulus and other Obama economic policies for not generating jobs and they want more tax cuts, claiming tax cuts will create jobs. Can anyone identify a single job that a particular business in Tennessee will create with a lower capital gains rate?
Cutting marginal tax rates will free up capital for the private sector to expand, hire more workers and boost the economy. President Kennedy recognized that in the early 1960s and President Reagan proved it can work in the 1980s coming out of a recession. Raising taxes will only cut into business investment and employee hiring.
The Bush tax cuts took us to near economic meltdown shortly before he left office. Using tax cuts to prime the pump only works when there's something to pump- we dried up the well by allowing businesses to close shop and move off shore. The stimulus provided short term relief but the hole we've dug is deep. Bipartisan solutions are needed but our elected officials are too entrenched to fight the battle.
Remember Charlie McCarthy's line when he told his ventriloquist partner Edgar Bergen " I saw your mouth move".
We have had the Bush gift-to-his-wealthy-friends tax cut in place for 10 years now. I see it really created a lot of jobs for this country in those ten years. Are you really suggesting we need more of the same?
Without Congressional action, taxes are going up for many small businesses in January and that can't help any economic recovery.
Obama is getting the message and agreeing to cut business taxes for R&D and other investments. Republicans would traditionally embrace such a fiscal policy. But it appears that Republicans in Congress want the politics over the policy, at least until election day. Obama needs to stop blaming Bush and Republicans need to work to support Obama on business tax cuts, military spending reductions and entitlement reforms. Once the economy revives, Republicans are going to need to support tax increases, Democrats are going to have to agree to spending cuts and all of us are going to have to support a higher retirement age. It's time for Americans to stop complaining and share in a little sacrifice. It's what the Greatest Generation did in World War II and what we need again today -- not on the battlefield but in the marketplace.
Any objective person, wealthy or poor, that looks at the statistics showing an ever-widening income gap between the wealthiest and middle-class Americans, should be supportive of tax cuts for the middle class. The current tax system and financial system is strongly weighted in favor of the rich getting richer. It needs to change or the country will collapse. If Obama and his staff could demonstrate any gamesmanship whatsoever, they would challenge Alexander and other Republicans to not only extend the tax cuts for incomes below 250k, but to eliminate the tax cut for incomes above 250k and replace it with a more significant tax cut for the middle class. On a separate note, Alexander and other career politicians with limited ideas and lack of statesmanship need to go. The people deserve better and should demand more from these clowns.
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