Bond and Emerson: Tax plan threatens economy
Sunday, March 15, 2009
A big part of President Obama's budget proposals to shrink the annual federal deficit to $533 billion in four years involve increasing taxes on higher-income Americans. On Saturday, U.S. Sen. Kit Bond and U.S. Rep. Jo Ann Emerson took aim at the president's initiatives, calling them a threat to jobs, families and charities.
"What they are doing is threatening to undermine the profitability of small banks, of small businesses, of all kinds of institutions, charities, even the economy itself," Bond said during a forum with small-business owners and leaders of charitable organizations. Bond and Emerson, both Republicans, met with the group of about 15 at JCS/Tel-Link 1606 N. Kingshighway.
They questioned the wisdom of Obama's budget proposal that would increase the top tax rate from 36 percent to 39.6 percent, place limits on the tax benefit of itemized deductions for charitable giving and mortgage interest and create a system to make utilities bid for the right to emit greenhouse gases.
The higher tax rates would be imposed on single people making more than $200,000 a year and couples earning more than $250,000. The limit on deductions would cap the tax benefit at 28 percent, a change that would only apply to people who itemize deductions.
The emissions proposal, called cap-and-trade, would auction off emission permits. Obama's budget anticipates $646 billion in revenue over 10 years from the auctions and would use $150 billion to encourage clean energy and rebate the remainder to individual taxpayers to defray higher utility costs.
The higher energy costs would come at the worst possible time, Emerson said. "Our argument is that the best way to put a company out of business in an economic crisis is to raise their energy costs," she said.
Charities are weathering the same kind of problems facing other sectors of the economy, Bond said. Charitable donations are down. Holly Lintner of the United Way of Southeast Missouri said the local campaign is about $100,000 short of its annual goal; other representatives of charities said their donations are down 25 to 30 percent.
"I have said I wanted to work with President Obama, but I am going to draw the line when I think he is off base," Bond said as he explained his opposition to Obama's proposals.
The federal deficit is expected to be a record $1.75 trillion in the next budget year. After falling the next few years, the deficit will start to rise again. Bond said the key is controlling spending, not raising taxes.
"President Obama is providing a whole bunch of Band-Aids and antiseptic for a patient that has cardiac arrest," Bond said.
Emerson took issue with some conservatives who contend the way out of the economic mess is to cut taxes. While she said she is opposing Obama's tax proposals, she's not ready to endorse cuts, either.
"I do not believe that, as I have said in the past, that cutting taxes is always the way to solve the problem," Emerson said. "I have never said that. I have just said I believe strongly that lower taxes encourage people to expand businesses."
1606 N. Kingshighway, Cape Girardeau, MO