Graves Will Oppose 1.3 Trillion Dollar Tax Increase

Press Release

Graves Will Oppose 1.3 Trillion Dollar Tax Increase

U.S. Congressman Sam Graves will oppose the plan endorsed by House Leadership to raise taxes by $1.3 trillion dollars. The plan, introduced by Rep. Charlie Rangel from New York, would be the largest individual income tax increase in history.

The new higher tax rates would affect approximately 10 million taxpayers directly - including those who report business income, like small business owners and farmers - but the damage will ripple throughout our economy. Because small businesses and family farms often pay their income taxes as individuals, this is a massive tax hike on the engine that drives job growth in this country.

"Missourians are already overtaxed," said Graves. "The knee jerk reaction in Washington is to simply take more of taxpayer money. It's exactly the wrong policy. Increasing taxes will hurt small businesses, farmers and people the government thinks make too much money."

Most small business owners file their small business income on their individual tax returns. There are up to 3.4 million individuals who have small business income on their tax returns and earn over $150,000, so they could have to pay the new "Additional Mandatory Tax" - the 4 percent surtax created by the Democratic legislation. The bill also takes the manufacturing tax deduction away from small business, raising their taxes and putting them at a competitive disadvantage compared to larger companies.

"We do not have a revenue problem, we have a spending problem," said Graves, echoing former President Ronald Reagan's famous line. "The way to get out of debt is to get Washington's spending under control. This Congress is spending billions of dollars in new domestic spending that we cannot afford."

Over the next few years, the individual income top tax rate in the United States will rise from 35% to 44%. By way of comparison, the other 29 Organization for Economic Co-operation and Development countries - basically other developed nations - have an average top marginal tax rate of 35.7%. In fact, only five OECD countries would have higher top marginal tax rates in 2011 than the U.S. if this bill is enacted.

"We need to make the United States the best place in the world to do business," said Graves. "The 2001 and 2003 tax relief resulted in millions of new jobs. Missourians do a better job of spending their own money than the government."

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