My View: Clear differences when it comes to governing
Glenn ‘GT’ Thompson
Member of Congress
While campaigning for Congress, I made few promises. I assured voters that I would be an advocate for smart government, rather than big government solutions to the problems ailing our nation. I vowed to weigh each piece of legislation on its individual merits and always cast my vote accordingly. Most importantly, I promised to be a good steward of your tax dollars.
These are the same three principles I used to evaluate President Obama‘s budget proposal and every other piece of legislation that has come before me on the House floor.
While some may be led to believe that President Obama’s budget will cut taxes for 95 percent of Americans, the reality is much different.
It is what I call an, ‘in the left pocket – out the right pocket’ policy.
Let me explain.
President Obama’s budget proposal will give most Americans a nominal return. This is called the, “Making Work Pay” tax credit, which amounts to roughly $7.69 per week for a single filer and $15.38 for those who file jointly. Annually, this is roughly $400 and $800, respectively, for folks earning less than $75,000 and couples earning up to $150,000.
Here is the catch.
The budget also proposes a tax increase of $646 billion on consumers of traditional energy sources through a complicated “cap and trade” program. This program will tax the use of carbon based fuels – oil, natural gas, and coal – which supply 85 percent of our energy needs here at home.
Affordable energy is not only vital for transportation and electricity generation, it is also essential as a feedstock and ingredient for many products.
As a result, imposing this new tax will increase the cost of every processed and manufactured good we consume – costing each household an additional $3,128 annually.
While every American will bear the burden of this new tax, those living on fixed incomes and the poorest among us will suffer most.
Also tucked away in the President’s budget is a hefty tax increase on small business owners. Many small business owners in the Fifth District file under the individual tax code.
What does this mean?
In 2010, the President’s budget will increase taxes on all taxpayers who earn more than $250,000. The majority of the burden for this additional $637 billion tax increase will be borne by small businesses that pay taxes under the individual code.
Small businesses create 7 out of every 10 new jobs in America. They are the backbone of our rural communities and are the very segment of the economy best equipped to assist in revitalization and restoring economic stability.
The President’s budget also caps the value of itemized deductions at 28 percent for couples earning more than $250,000 and single filers earning more than $200,000 annually.
This change in the tax code may seem harmless at face value, but it will have a direct negative impact upon charitable giving. Under this proposal, organizations that assist those in need will see their budgets decrease by an estimated $9 billion.
These three changes to the tax code, coupled with the President’s proposal to increase the national debt to $9.3 trillion over the next ten years, is not the direction we should be heading.
House Republicans have an alternative plan that will curb spending, lower taxes, and control the national debt.
These three pillars will create an environment where small businesses can flourish and prosper, while avoiding penalties for using the very energy sources that built this country to what it is today.
Our alternative budget proposes a fair tax, with a marginal 10 percent rate for income up to $100,000 for couples ($50,000 if single) and 25 percent thereafter. Folks that would choose to continue paying taxes at their current rate would be permitted to do so under this plan.
The practice of using the tax code to penalize savings and investment would come to an end.
Under this alternative, the individual capital gains tax is suspended for 2010, the death tax is permanently repealed, and a new deduction will allow small businesses (fewer than 500 employees) a write off equal to 20 percent of its gross income. This will allow for crucial reinvestment, so our nation’s economic engines can continue to grow.
Our proposal also includes generous standard and personal exemptions. For example, a family of four earning $39,000 would not pay federal incomes taxes.
To stop the outrageous growth of national debt, Republicans put an end to the failed policy of bailing out Wall Street at Main Street’s expense.
The principles of the free market economy have long served this nation well. While government should have a limited oversight role, outright investment and governmental ownership of private corporations is a practice that needs to end.
There are obvious differences between the two proposals. House Republicans, as the loyal opposition, I believe have a duty to offer alternative solutions when we disagree with the President. As was done with the stimulus package and the President’s housing plan, this alternative budget offers a new way to get America through these tough times, back to work, and looking forward to future prosperity.