With unemployment in California over 12 percent last month – and above 10 percent for the past 30 months – I have been focused since day one on job creation for our region. In fact, not only am I privileged to be the author of one of the only job-saving bills signed into law by President Obama this year, but I have supported the 12 other jobs bills passed by the House that unfortunately still await action by the Senate. Therefore, I was heartened that the President decided to present the nation with his jobs plan earlier this month.
Just as President Obama and I agreed that my bill, H.R. 4, to reduce paperwork and tax burdens on small businesses was essential for our nation’s job creators, I am confident that we can find some common ground on other job-creating proposals. For example, I support measures to advance trade agreements and shrink federal bureaucracy. As the House gives careful consideration to the President’s ideas, I hope that the White House and Senate would extend that same consideration to the dozen House-passed jobs bills now sitting in the Senate.
Some ideas in the President’s job plan in my opnion are misguided. These include funding projects similar to the 2009 stimulus that failed to keep unemployment below 8 percent as promised. We do not need to repeat the failed policies of the past but must look at new ways to empower job creators to create jobs.
To pay for this latest stimulus, the President has also drawn upon earlier ideas for new taxes, including limiting deductions for charitable contributions, increasing taxes and fees on airfare, and increasing taxes on small businesses that file as individuals. Many of these ideas were previously rejected by the Democratic House and Senate in the 111th Congress when the President suggested these tax increases to pay for his health care bill. As the President himself recognized in August 2009, these tax increases will undermine economic growth.
Furthermore, the President has suggested a “Buffett Rule,” claiming that taxes need to be increased on the wealthiest earners because they pay fewer taxes than their secretaries. However, the Associated Press (AP) quickly published a “fact check” of the President’s fundamental justification for increased taxes and concluded, “This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes, payroll taxes and other taxes,” whereas “Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.”
In fact, the top 10 percent of earners pay more than 70 percent of all federal income taxes. And nearly 50 percent of all households – mostly low- and medium-income families – pay no federal income taxes at all.
I agree with the President that we need to reform our tax code. I disagree with his premise that we can improve the tax code by making it more complex, inequitable, and burdensome. Instead, we must make our tax code fair, simple, and competitive. This will mean increasing revenues by closing loopholes that allow politically-connected companies to avoid paying taxes and lowering tax rates for all income earners.
The President has promised to veto any legislation forwarded by the Joint Committee on Deficit Reduction and passed by the Democrat-controlled Senate and the Republican-controlled House unless it includes his ideas for tax increases. I expect - and suspect that you also expect - the President to give careful consideration of any deficit-reduction plan that can garner bipartisan support instead of rejecting it before it has even been formulated or publicized.
Sincerely,
Daniel E. Lungren
Member of Congress
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