[Congressional Record Volume 156, Number 128 (Wednesday, September 22, 2010)]
[Senate]
[Pages S7309-S7310]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             TAX INCREASES

  Mr. BOND. Mr. President, this morning, all across America families 
are struggling to make ends meet. Their incomes are stagnant, but the 
cost of living keeps rising and the tax burden they face at the 
Federal, State, and local level keeps getting worse--and they are 
threatening to go higher.
  Just as troubling, today's ongoing economic uncertainty is crippling 
job creation and hurting small businesses--the real engines of growth 
in our country. Some of our small businesses have told me it is not 
uncertainty, it is the certainty that they know what the Federal 
Government has already done in the health care bill this body, 
unfortunately, passed.
  But what is the answer from Washington to this situation? More job-
killing taxes.
  Let me be very clear: The last thing we should be doing in this 
difficult economy is raising taxes on American families and small 
businesses. It is a recipe for disaster. I do not think anyone believes 
raising taxes on somebody in a recession is a good idea, particularly 
on the very small businesses we need to hire more workers and get the 
economy back on track. But unless Congress acts before the end of this 
year, that is exactly what will happen.
  This is not a Republican or Democratic issue, which is why 31 House 
Democrats have recently written the Speaker of the House urging her to 
act now to stop the tax increases on the American people. As these 31 
Democrats said, defying their leadership, raising taxes now could 
``negatively impact economic growth.'' Obviously, that would affect 
jobs.
  Instead of listening to the American people, and even those members 
of his own party, President Obama is trying to convince our Nation that 
the largest tax increase in history will not hurt them.
  Whether it is justifying their failed trillion-dollar stimulus bill 
or government takeover of health care, which will cost even more, and 
now their historic tax increases, the administration is guilty of using 
some very fuzzy math.
  Last week, the President took to the airwaves and claimed he 
``opposes tax cuts for millionaires''--a statement he repeated in Ohio 
as well. But the President's plan to increase taxes is on any 
individual earning $200,000 or more or any couple earning $250,000 or 
more. I do not know who the President is talking to, but I do not know 
any Missouri families with two working people making $250,000 a year 
who consider themselves millionaires. In fact, these Missouri families 
would be surprised that the President lumps them in the same category 
as George Soros, Warren Buffett, and Bill Gates.
  In fact, the tax on these ``rich'' people, as the President calls 
them, is a tax increase on small businesses. Under the President's tax 
increase plan, half of all small business income would be affected, and 
the President's tax increase plan would affect up to 25 percent of all 
American workers. They are employed by those small businesses, and they 
certainly will be affected.
  According to the Wall Street Journal's September 9 article entitled 
``The Small Business Tax Hike and the 3 percent Fallacy,'' IRS data 
shows that 48 percent of the net income of sole proprietorships, 
partnerships, and S corporations reported on tax returns went to 
households with incomes over $200,000 a year in 2007.

  It is very clear we are talking about small businesses that have a 
much broader impact than just 3 percent of all taxpayers, as the spin 
we hear from the White House puts it.
  This plan to increase taxes defies common sense. At a time when we 
need small businesses to expand and to create jobs, President Obama 
plans on raising their taxes. Imagine that. When jobs should be our top 
priority, with unemployment near 10 percent, this Congress and the 
President are proposing a historic job-killing tax increase.
  Bear in mind, according to the Small Business Administration, small 
businesses employ half of all private sector employees. They generated 
65 percent or 9.8 million of the 15 million net new jobs produced over 
the past 17 years. They produce 13 times more patents per employee than 
large patenting firms.
  The President has actually been very clear about his intensions for 
additional revenue raised by tax increases. As a matter of fact, on 
September 8, in Parma, OH, the President repeatedly said:

       I've got a whole bunch of better ways to spend the money.

  Well, Mr. President, I strongly disagree. As Milton Friedman once 
famously said:

       Nobody spends somebody else's money as wisely as they spend 
     their own.

  I think we have all seen proof of this over the past 21 months, and 
it is not

[[Page S7310]]

working. The nearly trillion-dollar stimulus plan that was supposed to 
create jobs immediately and keep unemployment below 8 percent failed, 
and now our children and our children's children are stuck with the 
bill that will be on their credit cards for a long time. But now the 
administration is pushing for even more tax increases in order to 
finance their massive spending spree.
  Each time I return home, I am reminded of the anger and the distrust 
that my constituents have for Washington. The people of my State are 
angry. They are on fire. They have every right to be. The people in 
Missouri know that additional tax revenue generated from their hard 
work will not be used to pay down our national debt but, instead, it 
will be used for more spending they do not want and the country cannot 
afford. The people in Missouri know they cannot afford these tax 
increases. They want to keep more of their hard-earned paychecks so 
they can support their families.
  On dividends and capital gains, the administration believes that 
taxes should go up. They also believe these two types of taxes on 
investment should be treated differently, with dividends being taxed as 
high as nearly 40 percent.
  Higher taxes on investment income will halt new investment and force 
these investors with much needed capital on to the sidelines. If you 
tax something, you get less of it. If you reduce taxes, you get more of 
it.
  But since Congress passed the 2,000-plus page regulatory overreach 
bill this year, we have seen a drop in capital formation, and tax 
increases will only continue to discourage private productive capital 
formation in the nongovernmental private sector.
  The looming tax increases will raise the price of capital and make 
lending much more expensive than it would be if we had properly reined 
in the bad actors and allowed the lending system to revert to practices 
based on creditworthiness, which means it will be even harder for our 
small businesses to get the lending, borrow what they need to continue 
to meet their payrolls, continue to employ workers, and keep their 
lights on.
  Dividends are payments made to shareholders by a profitable firm. 
They are the owners of the firm. Many of the folks who receive dividend 
income are not multimillion-dollar investors but, rather, many of them 
are seniors who rely on this as a supplement to their retirement 
income. We should not raise taxes on seniors who rely on this income.
  Recently, I heard from a utility in my State that came in and talked 
about the increased dividend tax and the concern as to what it would do 
to their shareholders. Many of their investors are senior citizens who 
are by no means rich and who live off of this income every day. They do 
not want to have, and they cannot afford to have, the government reach 
into their pockets and take more money.
  On the estate tax, death should not be a taxable event. There should 
not be taxation without respiration.

  The death tax hurts small, family-owned businesses, especially our 
family farmers. According to the Farm Bureau, individuals, family 
partnerships, or family corporations own 98 percent of our Nation's 2 
million farms and ranches.
  When faced with the death tax, farmers and ranchers are in an 
especially tough spot with most of their assets tied up in land and 
buildings, livestock and equipment. This gives them little flexibility 
when settling an estate. Unlike an investor with a stock portfolio, 
they can't simply sell off the stock and move on.
  The death tax punishes the American dream, making it virtually 
impossible for the American family to build wealth across generations, 
and this is particularly true for family farms.
  The death tax is antisavings, antifamily, and anti-investment. Quite 
simply, it is un-American, and it should be eliminated, or at least it 
should be reduced.
  Sadly, because of the Senate's failure to repeal this tax, I have 
signed on to the next best alternative--a bipartisan bill introduced by 
Senators Lincoln and Kyl which would increase the exemption for 
families to $5 million from the $3.5 million under the previous law.
  Under the President's plan, when you die, your estate will be taxed 
at a whopping 55 percent for assets above $1 million. The Kyl-Lincoln 
bill I am cosponsoring would reduce this rate to 35 percent for assets 
above the $5 million exception.
  Why is this important? Let me talk about farm country, where I live. 
Everybody knows that a successfully operated family-owned grain or corn 
or soybean farm is likely to have $1 million worth of land and likely 
more than $1 million worth of farm equipment so they can be a 
productive farmer in the world competitive economy. The President's 
plan would force these family farms to close rather than pass to the 
next generation of family farmers.
  I say to my colleagues, unless Congress acts now, in less than 100 
days Americans will be hit with the largest tax hike in our Nation's 
history. That is why I have joined with Senators McConnell, Grassley, 
and others to stop these tax hikes, cosponsoring the Tax Hike 
Prevention Act. This bill prevents the tax hikes scheduled for next 
year, permanently passes the alternative minimum tax, and protects 
families from increased death taxes.
  For most Americans across the Nation, recovery is what we desperately 
need. We need it in my State and we need it in every State. Small 
businesses are not hiring new workers or expanding. It is not just the 
uncertainty; it is the certainty of what the Federal Government is 
doing to them. Also, unemployment has been hovering at almost 10 
percent. More than 3 million Americans have lost their jobs since 
February of 2009, and more have quit looking or are underemployed.
  One of the best ways to help our economy and end the uncertainty that 
is crippling job creation is to stop the coming tax hikes. In addition 
to helping small businesses, stopping the coming tax hikes would let 
Americans keep more of their paychecks that they can save and invest. 
Our citizens know how to spend their money better than any government 
bureaucrat.
  We have tried it with the government money. We have tried it with the 
government stimulus. The government stimulus stimulated the expansion 
of government. That is not productive. Let's try it the other way. 
Let's go back to what we used to do in this country and let the private 
sector work and develop useful products and services, sell those 
products, gain a profit, and hire more workers. It is time this 
Congress acts, and I hope they will act soon.
  I thank the Chair and I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Nebraska.

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