WASHINGTON, D.C.—Senator John Thune (R-S.D.), Chairman of the Senate Republican Conference and a member of the Senate Finance Committee, today denounced the Senate’s failure to protect small businesses and middle class families from looming tax increases scheduled to take place at the beginning of next year. The Senate today voted on legislation introduced by Senator Orrin Hatch (R-Utah) and Senator Mitch McConnell (R-Ky.) that would extend all of the current individual tax rates and death tax relief through the end of 2013, and would instruct the Senate Finance Committee to undertake comprehensive tax reform during that time. This legislation failed by a vote of 45 to 54.
“Our country’s abysmal job growth and economic uncertainty demand immediate action by Congress to extend all tax rates,” said Thune. “If the president and Senate Democrats are serious about growing our economy and preventing our country from heading over the fiscal cliff, they should provide certainty to small businesses by extending the current tax rates for all Americans. Just two years ago, the president and 40 Senate Democrats agreed with Republicans saying that we should not be raising taxes on small businesses in a weak economy. If it was bad economic policy to raise taxes then, it is hard to believe that slower economic growth and higher unemployment now make it good policy to raise taxes on job creators.”
The Senate also voted today on legislation introduced by Senator Harry Reid (D-Nev.), that would increase taxes on individuals making more than $200,000 or families making more than $250,000 a year. This legislation (S.3412) would also increase taxes on capital gains and dividends for certain individuals and would allow the death tax to return to a 55 percent rate with a million dollar exemption. Under Reid’s legislation, the death tax would hit 24 times more farms and 13 times more small businesses. This legislation passed by a vote of 51-48.
Under the Democrats’ plan, tax hikes would hit nearly one million businesses that employ 25 percent of the nation’s workforce.
A recent Ernst & Young report provided additional evidence that the president’s proposed tax hike, which Reid’s bill is based on, would further reduce jobs and hurt the economy. The new study found that the president’s proposed small business tax hike would slash over 700,000 jobs, reduce economic growth by 1.3 percent, reduce investment by 2.4 percent, and cut wages by nearly 2 percent.