Last year, over 25 million tax returns had all of their ordinary income attributed to the lowest tax bracket, the ten percent bracket, which was created by the Republican tax cuts in 2001. Under the Democrats' budget, that lowest tax rate would increase by 50 percent.
The Democrats' policy on the estate tax is simply bizarre. Republican tax cuts would eliminate the "death tax" altogether in 2010. But under the Democrats' budget, the estate tax rate will return to 55 percent in 2011. It sounds crazy, but it's true: Under the Democrats' plan, if a small business owner dies on December 31st, 2010, the owner's family will be able to carry on the business without paying additional taxes. But if the owner lingers on through the night and dies on January 1, 2011, the family could owe over half the value of the business to the federal government in taxes.
Not satisfied with passing the largest tax increase in American history, Democrats are also looking for ways to squeeze more revenue out of the American people. Everyone should pay the taxes they owe. That is beyond dispute. But Democrats' efforts to close the "tax gap" between the amount of taxes due and what is paid will result in onerous new rules. The burden could fall most heavily on farmers and small business owners, who have a particularly high rate of underreporting, according to the government.
The reality is that much of the "tax gap" is the result of honest errors. Instead of forcing the IRS to target more ordinary taxpayers, we should be working to make our tax code simpler and fairer. In a recent survey, 80 percent of taxpayers said that the tax code is too complex, and they are right.
The American people have clear priorities when it comes to reforming the way our government taxes and spends their money. According to the same survey, 60 percent of taxpayers said their taxes are too high. Only two percent think they are too low. A different survey asked how the government should increase revenue. By an overwhelming margin - 81 percent to 13 percent - the American people replied that we should increase economic growth rather than raise taxes. Republicans agree with the American people, and we have a record of success. Democrats are offering exactly the opposite: higher taxes, more paperwork, and slower economic growth. So enjoy this Tax Day, because under the Democrats' plan, future ones will be worse.
Congressman McCrery has concentrated his energies on producing fundamental tax reform, economic growth and making health care more available and affordable.
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