The same folks who larded up the emergency war appropriations bill with billions of dollars in pork-barrel projects are at it again. Yesterday House Democrats voted to impose the largest tax hike in American history. Every spring Congress approves a budget blueprint that lays out its spending priorities and revenue assumptions for the next fiscal year and those that will follow. The budget approved by Democrats on Thursday reverses 12 years of Republican tax cuts and pro-growth policies. It lays the groundwork for increasing personal income tax rates on middle-income families, slashing the child tax credit, reinstating the marriage penalty and bringing back the death tax.
We've seen this play before. The last time Americans faced a massive tax hike was in 1993 -- the last time Democrats were in the majority. President Clinton campaigned on middle class tax cuts only to turn around and sign what was then the largest tax hike in history. But Clinton's tax hike pales before this one.
While Democratic friends may view them as just lines on a page, these impending tax hikes are real dollars and cents. Their budget would raise the tax bill for every working American -- 115 million taxpayers will see their taxes go up by an average of $1,795. And if you're married, have children, or own a small business, you're in for extra punishment.
For example, 48 million married couples will face an average tax increase of $2,899. Seventeen million elderly individuals will pay an average tax increase of $2,270; 26 million small business owners will be hit by an average tax increase $3,960. More than five million individuals and families who would have seen their income tax liabilities completely eliminated will now have to pay taxes. And by failing to reform or eliminate the alternative minimum tax (AMT) that's threatening to engulf more and more Americans, the Democrats' budget imposes an immediate $50 billion tax hike on middle class families.
That isn't all. By using a budget gimmick known as a "reserve fund," Democrats propose additional spending for federal programs, promising to pay for it later. How? Given their track record, the most likely scenario is that Democrats would burden the middle class with an additional $115 billion in new taxes.
The president's tax cuts of 2001 and 2003 are a principal reason the economy has enjoyed an uninterrupted string of monthly employment gains. Tax relief under the Republicans has fueled five straight years of overall growth and led to enormous capital investment. By coupling tax hikes with their insatiable appetite for political pork, the Democrats' budget could bring economic growth to an abrupt end.
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