Client & Advisor Update - February 08, 2010
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Hearings Highlight Tax Hikes in 2011 Budget In Senate Finance Committee hearings on the administration's record $3.8 trillion budget proposal, ranking member Chuck Grassley, R-Iowa, said the proposed tax increases would hurt job growth.
"Too often, the other side views tax increases as a necessary imperative to a healthy economy," he said. "Fiscal history shows it to be precisely the opposite."
"Appropriations are up 25 percent over the last two years," he noted, while American families and businesses have not had that luxury. "Both sides agree small business is the key to a goal both sides agree on: job creation. Yet the president's budget raises the marginal rate on small businesses by over 15 percent," he said.
U.S. Chamber of Commerce executive vice president for government affairs R. Bruce Josten said that the budget, if enacted, would balloon the deficit, dramatically increase taxes in a weak economy, and undermine American job creation.
"The FY11 budget proposes even larger deficits and even more spending than last year's record-breaking totals," he said. "Over the next 10 years, the White House proposes to increase spending by 12 percent more as a share of the economy than it has averaged over the past three decades. Using its own numbers, the administration's proposed budget deficits will cause debt as a share of the economy to increase by 13.6 percentage points."
While the National Association of Manufacturers criticized the budget for its tax increases on business, it expressed support for the proposal to extend some key international and investment tax provisions that expired last year, and its recommendation to make the R&D credit permanent.
"We hope Congress will move quickly on these extenders and establish a permanent, strengthened R&D credit," said