Taking A Cue From Pro- Growth Texas Policies
Recently I opposed the $3.6 trillion federal budget proposed by President Obama and Democrat leaders in Congress. Simply stated, their budget taxes too much, spends too much, and borrows too much.
Perhaps most disappointing is how this budget treats small businesses, which are responsible for generating nearly 75 percent of all new private sector jobs. President Obama has proposed raising net taxes by $1.4 trillion over the next 10 years. The bulk of this burden will be shouldered by our state's most successful small businesses. The President's plan includes raising the top two tax brackets to a nominal rate of 36 and 39.6 percent. He also wants to limit the deduction for charitable donations and for state and local sales taxes— a deduction that provides Texans with over a $1 billion in federal tax relief every year. Altogether, the effective marginal tax rate on thousands of our small businesses could be more than 40 percent.
I have heard firsthand from small businesses in Texas that cannot afford a tax increase. On a recent visit in Tyler, I met Don Thedford, who opened Don's TV and Appliance with just one other employee 30 years ago. Today, Don has close to 50 employees who sell and service appliances and electronics. Don attributes much of his ability to grow his business over the past decade to the across-the-board federal tax cuts of 2001 and 2003. Since 2000, Don has hired eight additional workers to install and deliver appliances, seven more service technicians, six more clerical workers, four more sales people, and two more management positions. Don also added a new retirement plan for all his employees, in addition to the health benefits that he's offered for years. The recession has taken its toll on Don's sales. With home sales down, there is less demand for appliances and electronics. Don conveyed that higher taxes could force him to lay off some of his employees or trim the benefits he currently offers.
In Lubbock, John and Vicki Hoffman have owned J. Hoffman's & Brighton Collectibles, a women's clothing and accessories boutique, since 1974. They employ 12 individuals and have experienced steady growth in recent years. Like Don Thedford, the Hoffmans benefited from the tax relief enacted in 2001 and 2003. They were able to add many new brands and items to their store, and in 2003, they became an official retailer for Brighton Collectibles, a large national retailer of fashion items that can be found in 6,000 boutiques across the country. While they have been able to weather the economic downturn so far, John and Vicki believe the President's proposed tax increases will impact their business "significantly".
Here in Texas, we value the contributions of small businesses, and we have put pro-growth policies in place that attract entrepreneurs to invest in Texas and create jobs here. These are the successful Texas policies I have worked to bring to Washington. I have consistently supported tax relief and incentives for our small business owners so they can continue to expand and create new jobs. For the past three years, I have offered an amendment to the budget that would make it more difficult for Congress to raise taxes on small businesses and working families.
While I'm pleased my amendment passed on a bipartisan basis this year, that did not stop some from proposing to raise taxes on American families and small businesses to grow the size of Washington programs to an all-time high.
Washington should be supporting our small business owners, not burdening them with higher taxes. That's the vision that will lead to economic recovery, and that's what I'm fighting for in Washington. The best place to start is to look at what works and take a cue from our state's pro-growth, lowtax policies. After all, Texas has been able to weather the economic downturn better than most. I will continue to bring the experience of successful Texas policies to Washington, and I hope my colleagues there will join me in taking responsible, pro-growth steps to heal our nation's economy.