Guest column submitted by U.S. Senators Mike Crapo and Jim Risch
The United States is experiencing record price increases and rising inflation, and Americans are rightly concerned. A recent poll said that when Americans are asked to name the top economic problem facing their family today, rising prices and the cost of living are overwhelmingly the top issue. Economists on both sides of the aisle have warned excessive, non-productive spending could put us in this position. Now, Democrats are advancing an additional $3.5 trillion in spending that will balloon the federal government even more.
On August 11, 2021, we voted against the Democrats’ $3.5 trillion reckless tax-and-spending spree after Republicans forced the Democrats to separate this partisan wish-list spending spree from the Senate-passed hard Infrastructure Investment and Jobs Act (IIJA), and we will continue to fight and vote against it. Democrats are coupling runaway spending with job-and-growth-killing tax hikes to form their reckless tax-and-spend policies.
Business Taxes: Democrats plan to hike the tax rate paid by all types of businesses, including corporations, ignoring the fact that a significant portion of this tax burden is paid by workers. As the U.S. Chamber of Commerce notes, most corporations are small businesses, with 84 percent having fewer than 20 employees. A recent nonpartisan analysis suggests the majority of revenue raised from a corporate rate hike next year would come from people earning less than $500,000 a year, and that the increased burden borne by these taxpayers would grow over time.
Small Businesses and Family Farms: Today, family businesses passed down at death are only subject to estate tax and not an additional income tax. Instead, a business’s tax basis is increased or “stepped up” to fair market value, sparing the next generation a large capital gains tax bill. Democrats want to create a double death tax by eliminating the benefit of this step-up in basis, including for small businesses, farms and ranches passed down from one generation to the next at death. The Democrats’ plan would tax these businesses on simple inflation, sticking them with the bill for reckless inflationary tax-and-spend policies.
Capital Gains Tax: For decades, Republicans and Democrats have recognized the importance of encouraging people to save for future goals, including starting a business, saving for retirement, achieving financial independence, or buying a home or a car. Members of both parties have long supported a lower tax rate on long-term capital gains to help all Americans achieve these goals. Democrats want to sharply increase this tax rate to the highest in decades. This supersized tax hike would hit small businesses, savers, retirees, entrepreneurs and innovators and negatively impact all Americans regardless of their financial circumstances or goals.
IRS Funding and Bank Monitoring: The Biden Administration has proposed nearly $80 billion in additional Internal Revenue Service (IRS) funding. The Administration’s proposal would force financial institutions into reporting deposit and withdrawal flows on their customers’ accounts with inflows and outflows of greater than $600 in value, drag-netting law-abiding Americans, exposing sensitive data to future breaches, burdening financial institutions, and encouraging growth of shadow banking.
These are just some of the many negative impacts of the Democrats’ reckless proposals they are trying to rush through Congress without full and open debate. We are among Senate Republicans demanding a transparent process to rigorously examine and debate reckless tax-and-spend proposals in the committees.
The Democrats’ unprecedented, far-reaching and highly disruptive legislation should be fully vetted and afforded appropriate opportunity for debate, especially with trillions of tax dollars at stake.
We will continue to fight and vote against the President’s $3.5 trillion spending spree coupled with job-killing tax proposals and press for building on time-proven, pro-growth policies.
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