Skip to main content

Taxmageddon is headed our way

By Orrin Hatch, Special to CNN
updated 8:59 AM EDT, Wed July 25, 2012
STORY HIGHLIGHTS
  • Orrin Hatch: Unless President Obama, Congress act, Americans face big tax increases
  • He says without agreement all taxpayers would face higher rates
  • Hatch says Democrats' plan would hit small business owners, inhibiting job creation
  • He says rates should be extended a year to allow time for a tax reform plan

Editor's note: Sen. Orrin Hatch of Utah is the ranking Republican on the Senate Finance Committee.

Washington (CNN) -- Taxmaggedon is coming. Unless President Obama and Congress act, Americans will be hit with what would be in total dollars the largest tax increase in history in little more than five months.

Income taxes will go up on every single taxpaying American. The Alternative Minimum Tax, designed decades ago to ensure that 154 wealthy Americans paid income taxes, would hit an additional 27 million Americans with a $92 billion tax hike. The death tax will come roaring back -- hitting farmers, ranches and businesses.

The cost? A family of four earning $50,000 would see their tax bill go up by $2,200. A single mother with a $36,000 a year paycheck would see $1,100 more go to Uncle Sam. And a married senior citizen couple with $40,000 in income would see their taxes double -- paying $1,700 in higher taxes.

Sen. Orrin Hatch
Sen. Orrin Hatch

And there's a clear difference in vision for how to address this fiscal crisis.

I and other Republicans have proposed stopping these tax increases for all Americans. As the top Republican on the Finance Committee, I've put forward a proposal to prevent the largest tax hike in history from taking place and to pave the way for comprehensive tax reform in 2013.

If Congress doesn't agree with President Obama's plan to raise taxes on one of the most productive segments of our economy by allowing the top two marginal tax rates to expire, Washington Democrats' default position appears to be to let everyone's income tax rates skyrocket.

The Senate Democrats' plan would hit just under 1 million small business owners who file their taxes not as C corporations but as individuals. These are the job creators trying to lead our economic recovery and the Democrats seek to raise their taxes substantially. That doesn't make any sense.

Goolsbee on tax reform
Lee: Congress should extend tax cuts
Sen. Blumenthal: Extend tax cuts

Taxmageddon is real, and the uncertainty caused by it is contributing to the lackluster economic recovery. That's not a Republican talking point; that's based on comments from job creators across the country.

It's based on people like Brent Gines from Sandy, Utah, who said that "Any increase in expenses or outlay always has a big decrease on our ability to do business."

It's based on data like those from a recent report by accountants at Ernst & Young, who find that President Obama's proposed tax hike would shrink the economy by 1.3% and shed 710,000 from the American workforce. It's based on information from the National Federation of Independent Business and the U.S. Chamber of Commerce.

Federal Reserve Chairman Ben Bernanke recently told the Senate Banking Committee that our country's economic recovery "could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken."

The Congressional Budget Office and International Monetary Fund have also both issued warnings.

The American people understand that raising taxes is not a solution. In 2010, the president said that allowing tax rates to increase "would have been a blow to our economy, just as we're climbing out of a devastating recession." He was right, and the same idea applies today.

The only solution is to provide job creators and working families the certainty they need by extending all the current tax rates for another year, as we did in 2010, and then work next year to fundamentally reform our broken, costly tax code.

The president and his allies need to listen to what Americans are saying. They need the certainty of an extension of current tax rates for another year, and they need Congress to move forward together to reform the tax code to spur economic growth and job creation.

What does fundamental tax reform look like?

It means lower marginal income tax rates that would lead to more hiring, greater capital formation, better returns on our investments and a stronger economy.

A simpler tax code means that many of the resources currently poured into complying with the tax laws could be put to other uses -- investing in new businesses, paying for our children's education, and giving money to charitable causes, to name a few.

This is not a time for political games, divisiveness and vilifying business and industry. Businesses continue to sit on the sidelines because they don't know what Washington is about to throw at them. The uncertainty is holding them back, and it's stifling our economy.

The president and his liberal allies in the Senate need to stop holding America's economy hostage in order to get what they want -- which is higher taxes that would hit small businesses and the workers they hire.

Let's extend current tax rates for a year to give job creators and working families some certainty, then roll up our sleeves and pass meaningful tax reform to ensure America remains the leader we know it to be.

Follow @CNNOpinion on Twitter

Join us at Facebook/CNNOpinion

The opinions expressed in this commentary are solely those of Orrin Hatch.

ADVERTISEMENT
Part of complete coverage on
updated 5:01 PM EDT, Wed October 22, 2014
Paul Callan says the grand jury is the right process to use to decide if charges should be brought against the police officer
updated 12:19 PM EDT, Thu October 23, 2014
Theresa Brown says the Ebola crisis brought nurses into the national conversation on health care. They need to stay there.
updated 6:35 PM EDT, Tue October 21, 2014
Patrick Hornbeck says don't buy the hype: The arguments the Vatican used in its interim report would have virtually guaranteed that same-sex couples remained second class citizens
updated 9:36 AM EDT, Fri October 24, 2014
Paul Begala says Iowa's U.S. Senate candidate, Joni Ernst, told NRA she has right to use gun to defend herself--even from the government. But shooting at officials is not what the Founders had in mind
updated 6:08 PM EDT, Thu October 23, 2014
John Sutter: Why are we so surprised the head of a major international corporation learned another language?
updated 5:54 PM EDT, Thu October 23, 2014
Jason Johnson says Ferguson isn't a downtrodden community rising up against the white oppressor, but it is looking for justice
updated 12:21 PM EDT, Fri October 24, 2014
Sally Kohn says a video of little girls dressed as princesses using the F-word very loudly to condemn sexism is provocative. But is it exploitative?
updated 4:06 PM EDT, Tue October 21, 2014
Timothy Stanley says Lewinsky is shamelessly playing the victim in her affair with Bill Clinton, humiliating Hillary Clinton again and aiding her critics
updated 10:14 AM EDT, Thu October 23, 2014
Imagine being rescued from modern slavery, only to be charged with a crime, writes John Sutter
updated 12:00 PM EDT, Tue October 21, 2014
Tidal flooding used to be a relatively rare occurrence along the East Coast. Not anymore, write Melanie Fitzpatrick and Erika Spanger-Siegfried.
updated 7:35 AM EDT, Tue October 21, 2014
Carol Costello says activists, writers, politicians have begun discussing their abortions. But will that new approach make a difference on an old battleground?
updated 9:12 AM EDT, Tue October 21, 2014
Sigrid Fry-Revere says the National Organ Transplant Act has caused more Americans to die waiting for an organ than died in both World Wars, Korea, Vietnam, Afghanistan and Iraq
updated 2:51 PM EDT, Tue October 21, 2014
Crystal Wright says racist remarks like those made by black Republican actress Stacey Dash do nothing to get blacks to join the GOP
updated 6:07 PM EDT, Tue October 21, 2014
Mel Robbins says by telling her story, Monica Lewinsky offers a lesson in confronting humiliating mistakes while keeping her head held high
updated 9:29 AM EDT, Mon October 20, 2014
Cornell Belcher says the story of the "tea party wave" in 2010 was bogus; it was an election determined by ebbing Democratic turnout
updated 4:12 PM EDT, Mon October 20, 2014
Les Abend says pilots want protocols, preparation and checklists for all contingencies; at the moment, controlling a deadly disease is out of their comfort zone
updated 11:36 PM EDT, Sun October 19, 2014
David Weinberger says an online controversy that snowballed from a misogynist attack by gamers into a culture war is a preview of the way news is handled in a world of hashtag-fueled scandal
updated 8:23 AM EDT, Mon October 20, 2014
Julian Zelizer says Paul Krugman makes some good points in his defense of President Obama but is premature in calling him one of the most successful presidents.
updated 10:21 PM EDT, Sun October 19, 2014
Conservatives can't bash and slash government and then suddenly act surprised if government isn't there when we need it, writes Sally Kohn
updated 8:05 AM EDT, Wed October 22, 2014
ISIS is looking to take over a good chunk of the Middle East -- if not the entire Muslim world, write Peter Bergen and Emily Schneider.
updated 9:00 AM EDT, Mon October 20, 2014
The world's response to Ebola is its own sort of tragedy, writes John Sutter
updated 4:33 PM EDT, Fri October 17, 2014
Hidden away in Russian orphanages are thousands of children with disabilities who aren't orphans, whose harmful treatment has long been hidden from public view, writes Andrea Mazzarino
updated 1:22 PM EDT, Sat October 18, 2014
When you hear "trick or treat" this year, think "nudge," writes John Bare
updated 12:42 AM EDT, Sat October 18, 2014
The more than 200 kidnapped Nigerian schoolgirls have become pawns in a larger drama, writes Richard Joseph.
updated 9:45 AM EDT, Fri October 17, 2014
Peggy Drexler said Amal Alamuddin was accused of buying into the patriarchy when she changed her name to Clooney. But that was her choice.
updated 4:43 PM EDT, Thu October 16, 2014
Ford Vox says the CDC's Thomas Frieden is a good man with a stellar resume who has shown he lacks the unique talents and vision needed to confront the Ebola crisis
updated 4:58 AM EDT, Sat October 18, 2014
How can such a numerically small force as ISIS take control of vast swathes of Syria and Iraq?
updated 9:42 AM EDT, Fri October 17, 2014
How big a threat do foreign fighters in Syria and Iraq pose to the West? It's a question that has been much on the mind of policymakers and commentators.
updated 8:21 AM EDT, Fri October 17, 2014
More than a quarter-million American women served honorably in the Iraq and Afghanistan wars. Now they are home, we have an obligation to help them transition back to civilian life.
updated 4:27 PM EDT, Thu October 16, 2014
Paul Begala says Rick Scott's deeply weird refusal to begin a debate because rival Charlie Crist had a fan under his podium spells disaster for the Florida governor--delighting Crist
updated 12:07 AM EDT, Thu October 16, 2014
The longer we wait to engage on Ebola, the more limited our options will become, says Marco Rubio.
updated 7:53 AM EDT, Wed October 15, 2014
Democratic candidates who run from President Obama in red states where he is unpopular are making a big mistake, says Donna Brazile
updated 12:29 AM EDT, Thu October 16, 2014
At some 7 billion people, the world can sometimes seem like a crowded place. But if the latest estimates are to be believed, then in less than a century it is going to feel even more so -- about 50% more crowded, says Evan Fraser
updated 12:53 PM EDT, Mon October 20, 2014
Paul Callan says the Ebola situation is pointing up the need for better leadership
updated 6:45 PM EDT, Wed October 15, 2014
Nurses are the unsung heroes of the Ebola outbreak. Yet, there are troubling signs we're failing them, says John Sutter
updated 1:00 PM EDT, Wed October 15, 2014
Dean Obeidallah says it's a mistake to give up a business name you've invested energy in, just because of a new terrorist group
updated 7:01 PM EDT, Wed October 15, 2014
Fear of Ebola is contagious, writes Mel Robbins; but it's time to put the disease in perspective
updated 1:44 PM EDT, Tue October 14, 2014
Oliver Kershaw says that if Big Tobacco is given monopoly of e-cigarette products, public health will suffer.
updated 9:35 AM EDT, Sat October 18, 2014
Stop thinking your job will make you happy.
updated 10:08 PM EDT, Tue October 14, 2014
Ruben Navarrette says it's time to deal with another scandal involving the Secret Service — one that leads directly into the White House.
updated 7:25 AM EDT, Tue October 14, 2014
Americans who choose to fight for militant groups or support them are young and likely to be active in jihadist social media, says Peter Bergen
updated 9:03 AM EDT, Mon October 13, 2014
Stephanie Coontz says 11 years ago only one state allowed same sex marriage. Soon, some 60% of Americans will live where gays can marry. How did attitudes change so quickly?
updated 4:04 PM EDT, Tue October 14, 2014
Legalizing assisted suicide seems acceptable when focusing on individuals. But such laws would put many at risk of immense harm, writes Marilyn Golden.
updated 9:07 AM EDT, Mon October 13, 2014
Julian Zelizer says the issues are huge, but both parties are wrestling with problems that alienate voters
updated 6:50 PM EDT, Mon October 13, 2014
Mel Robbins says the town's school chief was right to cancel the season, but that's just the beginning of what needs to be done
updated 11:43 AM EDT, Sat October 11, 2014
He didn't discover that the world was round, David Perry writes. So what did he do?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT