Don't Mess With Success
As Congress prepares to tackle the annual federal budget process, we are a week away from a vote that could put our economy on a dangerous new path. Yesterday, the majority party unveiled its budget proposal to impose higher taxes on families and businesses in order to pay for more wasteful Washington spending.</br></br>Despite campaign promises not to raise taxes, the new majority party's budget fails to keep existing tax policies in place, which amounts to a $900 billion tax hike over five years, the largest tax increase ever. The Democrats may try to use smoke and mirrors to mask this increase, but it is there, and the real victims will be average Americans.</br></br>Under a Democratic budget that does not extend existing tax policies, the lowest-income families who pay taxes will see their taxes increase by 33%. The $1,000 per child tax credit would be cut in half, and the standard deduction for married couples would be cut by $1,700. Forty-five million working families with two children would pay $3,000 more in taxes per year, equivalent to a 5% pay cut. Three thousand dollars may not sound like a lot in Washington, but in New Hampshire and Iowa it pays for a year's worth of groceries, health- care expenses, home-heating oil or electricity.</br></br>In addition to taking more from hard-working families, that tax hike would serve to slow the economy, suppressing investment and job creation. It would dampen the positive impact that the capital gains tax rate has had on the investments of families and seniors. That tax hike would become a noose around the neck of the economy.</br></br>Following the bursting of the Internet stock- market bubble, corporate scandals and the Sept. 11 terrorist attacks, the U.S. economy was struggling to stay afloat. A Republican Congress joined forces with the president to enact fair, pro-growth tax policies in 2001 and 2003. These tax cuts have had a remarkable effect. The economy has not only remained afloat, it has also thrived, offering increased prosperity and opportunity to millions of American families and businesses.