Democrats Consider More Job-Killing Taxes

With the popular Bush tax cuts set to expire at the end of the year, House and Senate Democrats scheduled a meeting last week to begin discussing tax policy. Given that the majority party never met a tax hike it didn't like, it's always cause for anxiety when they talk taxes. Predictably, early indications are that congressional Democrats support tax increases totaling over $200 billion next year and $3.8 trillion over the next 10 years.

The liberal advocates of raising taxes are already claiming that any increases will spare most working families and only affect the wealthiest Americans. But an analysis by the non-partisan Joint Committee on Taxation demonstrates that this assertion is simply not true. Even if the Democratic majority succeeds this year in raising taxes in only the top two tax brackets, the effect on small businesses would be devastating. Small business owners would pay over half of the new taxes created by increases to the 33 and 35 percent tax brackets. Considering that roughly 70 percent of the job creation in America comes from small businesses, workers at all income levels could see their employment prospects -- and paychecks -- dwindle if small businesses get slammed with massive tax increases.

American businesses are already strained almost to the breaking point, resulting in a remarkable wave of public criticism directed at the White House from frustrated employers. The frequent occurrence of headlines like "Small business owners uneasy with Obama" demonstrates the impatience employers feel toward a White House agenda that has heaped new taxes, costs and regulations on businesses without making any discernable progress in lowering the near 10 percent jobless rate. At a jobs summit hosted by the U.S. Chamber of Commerce last week, Chamber President Tom Donohue did not mince words in describing the "job-destroying" nature of Obama's policies and urging the administration to extend the Bush tax cuts. Donohue stated: "Taken collectively, the regulatory activity now underway is so overwhelming and beyond anything we have ever seen, that we risk moving this country away from a government of the people to a government of regulators." Added Donohue, "Our current economic direction is not working."

Rank-and-file business leaders echoed the Chamber's sentiments. Small business owners interviewed by Politico described how the economic uncertainty created by the health care takeover and new financial regulations made it difficult to expand their businesses and hire new people. Said one, "It's just easier for me to sit and wait."

Signals that Democrats are considering tax increases will only add to uncertainty and the general anti-business climate that continues to stifle job growth. If President Obama will not listen when employers declare his policies are hurting the economy, perhaps he will pay more attention when the American people express their disapproval in November.

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