[Congressional Record Volume 156, Number 128 (Wednesday, September 22, 2010)]
[Senate]
[Pages S7310-S7311]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               TAX POLICY

  Mr. JOHANNS. Mr. President, I rise today to speak about something 
that is enormously important, and that is tax policy and the economy.
  Over the most recent break, I had the opportunity to go out across 
the State of Nebraska. I traveled throughout the State and I conducted 
14 townhall meetings. I listened to a lot of concerns, but there was 
one issue that dominated all of the discussion and that was the state 
of our Nation's economy. Nebraskans, like all Americans, are wondering 
when the economy will turn around. They are wondering when this 
administration is going to actually take action to support job creators 
instead of just talking about it.
  A recent CNN poll shows that 57 percent of Americans disapprove of 
the President's handling of the economy. The President's job agenda to 
date has simply failed to produce the results that were promised.
  Take a look at the economic stimulus that cost taxpayers $862 
billion--$1 trillion if you add interest--and it has come up short. 
Instead of more government spending that fails to create jobs, we need 
to create a progrowth environment that fosters job creation that is so 
desperately needed in every part of this great Nation. In order to do 
so, we must first and foremost give individuals and businesses some 
degree of certainty about the future. Unfortunately, the health care 
bill and the financial bill are doing exactly the opposite. Businesses 
are actually fearful of the regulatory environment and the list of 
pending tax hikes, causing them to wait out the anxiety and stay on the 
sidelines.
  The National Federation of Independent Business describes it this 
way:


[[Page S7311]]


       Uncertainty about the economy and looming tax hikes have 
     kept this sector from hiring new workers, resulting in a weak 
     economic recovery and slow to nonexistent job growth.

  But the NFIB doesn't stop there. They further describe this:

       Congress can take an important step to address the 
     uncertainty by holding a vote and passing legislation 
     extending all of the expiring tax rates. No small business 
     owner should face higher taxes.

  At a time when Americans are struggling in their businesses to meet 
next month's payroll, they don't need more uncertainty from Washington. 
What they need are assurances from their government that there will be 
no more taxes or unnecessary regulatory burdens piled on top of them at 
a time when their plates are already overflowing.
  Even White House economic adviser Larry Summers recently acknowledged 
the importance of providing businesses with certainty about the future. 
He said something actually quite profound:

       Confidence is the cheapest form of stimulus, and we've got 
     to be very attentive to creating an economic environment in 
     which there is confidence.

  I agree with him.
  One way to help eliminate this uncertainty and bring confidence back 
to the economy is to continue the current tax rates. Failing to do so 
will only cause further uncertainty and inadequate growth. Most 
alarmingly, letting these tax rates increase will result in the largest 
tax hike in American history. Let me repeat that: One hundred days from 
today, the largest tax hike in history will take effect, unless 
Congress acts.
  Considering the state of our economy, with a lackluster growth rate 
of 1.6 percent and unemployment at 9.6 percent, with real unemployment 
in the double digits, tax increases are the last thing Americans need. 
Tax increases are the last thing our job creators need.
  It is no surprise that businesses aren't willing to take the chance 
to expand and to hire. We keep hearing the President and his 
administration tell businesses to create jobs, to get off the 
sidelines. We keep hearing the President say that. Meanwhile, the same 
administration has increased taxes, imposed mandates, created 
uncertainty, and now is willing to allow this massive historic tax 
increase to hammer our job creators. It simply makes no sense. Why 
would an administration that is supposedly committed to small 
businesses try to take more of their money while at the same time 
urging them to spend more money on expanding and creating jobs? Maybe 
it is because they claim that only rich Americans--rich Americans--
would be impacted.
  As small business owners across the country can tell us, this is 
simply a false notion. Many small business owners file as individuals 
and, therefore, report income above $200,000. We rely heavily on these 
small businesses to use that capital to create jobs to boost our 
economy.
  Over the past 15 years, small businesses have been responsible for 
generating--get this--64 percent of all of our new jobs. Under the 
administration's proposal, the Joint Committee on Taxation estimates 
that nearly 750,000 taxpayers with small business income will be hit 
with a tax increase 100 days from today. I don't get it. I can't fathom 
why we would raise taxes on job creators when we are facing record 
unemployment and a sputtering economy.
  It is not just small businesses. It is also family farms and ranches 
that would be caught up in the net of this massive tax increase. 
Suddenly, they would all find themselves classified as the ``rich'' 
people this administration claims are the only ones impacted by this 
foolhardy policy.
  It is unfair and unwise policy I am speaking about. What our small 
businesses, farms, and ranches need now is a stable economic 
environment, not tax increases from their government. It is time for 
government to stop suppressing businesses and give them a chance to 
grow in a certain environment--to expand, create jobs, to buy new 
equipment--because that is what will fuel job growth in this Nation. 
Our small businesses are the heart of our economy. We need to give them 
the opportunity to move our economy forward, not be stifled by 
government policies.
  The original intent of the tax cuts when instituted nearly 10 years 
ago was to free up capital for these entities to grow, to hire, and to 
produce. In fact, in 2007, once these tax breaks had taken effect, our 
tax collections achieved an all-time high in this Nation. Let me repeat 
that. In 2007, once these tax rates took effect--they were fully in 
place--our tax collections achieved an all-time high. The reason is 
obvious. When you have people working, they pay taxes, they add to the 
economy, they fuel economic growth.
  The bottom line is that tax breaks help to get our economy moving 
which, in turn, generates revenues. We saw it in 2007. Even Christina 
Romer, the former chairwoman of the President's Council of Economic 
Advisers, recently published some research on tax policy. I am quoting:

       Tax cuts have very large and persistent positive output 
     effects.

  In contrast, she wrote:

       Tax increases appear to have a very large, sustained, and 
     highly significant negative impact on output.

  I couldn't agree more.
  Standing idly by while taxes skyrocket at the end of this year, in 
100 days, will--and it is very predictable--have a chilling effect on 
American businesses and, therefore, hard-working families. It is time 
that the actions of this administration and this Congress match the 
promises being made about creating an environment that fosters growth 
instead of hindering it.
  The American people are no longer willing to accept empty words at 
face value. They want to see policies that match promises. Fortunately, 
it is not too late. This administration and this Congress still have an 
opportunity to make good on their promises to small businesses, to 
those working families, but it will mean taking action to prevent a 
massive tax hike on January 1, 2011.
  I ask all of my colleagues to show they are willing to work together 
to fulfill their promises to small businesses. Let's deliver on those 
promises to provide stability instead of uncertainty. Let's work 
together to prevent a huge tax hike on our job creators in 100 days.
  The American people--hard-working families--deserve no less.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Burris). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BROWN of Ohio. Mr. President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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