|Senate Vote on the Tax Agreement|
|News Releases - Business, Economy & Finance|
|Written by Sen Chuck Grassley|
|Thursday, 16 December 2010 15:14|
Statement by U.S. Senator Chuck Grassley of Iowa
Ranking Member of the Committee on Finance
Senate Vote on the Tax Agreement
Wednesday, December 15, 2010
“Preventing a tax increase is the best thing we can do for the economy right now. It’s common sense that you don’t raise taxes in a recession, including on employers in small business where 70 percent of new jobs are created.
“The only thing better than passing this legislation would be to make tax relief permanent. Uncertainty about tax rates works against America’s economic recovery. We’ve seen nearly 23,000 jobs in biodiesel disappear because its tax incentive was allowed to lapse at the end of last year. Every small business owner who pays taxes on the individual level faces higher taxes if a tax increase isn’t prevented across the board with this legislation. There’s a rule that if you want more of something, don’t tax it. We want more employment, so Congress should not allow higher taxes on employment.
“This legislation extends 51 tax incentives for different sectors of America’s economy, including ethanol. These tax policies have been extended previously because they’ve been proven to help create economic activity. This legislative agreement also makes sure the government can’t take more than half the estates of farmers and small business owners who have scrimped, sacrificed and saved their entire lives to build up a family business by imposing a 55-percent estate tax even after those business owners spent a lifetime paying income, investment and property taxes.
“Since World War II, the tax burden has averaged 18.2 percent of the gross domestic product. Even if Congress were to extend all of the current-law tax levels permanently, the nonpartisan Congressional Budget Office indicates that taxes as a percentage of gross domestic product will still be much higher than they have been over the last 70 years. So, even if we were to permanently keep the tax rates at current levels, Americans will be overtaxed when compared with what they’ve paid in recent history.
“We don’t have a deficit problem because people are taxed too little. We have a deficit problem because Washington spends too much. The deficit needs to be taken on through economic growth and reduced spending. Revenue to the federal Treasury will continue to increase with the level of taxes as they are today, which this bill will secure for two more years.
“Congress needs to listen to the people and support less spending. In 2010, I voted for $278 billion in spending reductions. All of those reductions were rejected by the majority party’s leaders.”
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