In The News

No, Mr. President, The Private Sector Is Not 'Doing Fine'
The Detroit News
U.S. Rep. Bill Huizenga and Robert Genetski
July 19, 2012

The private sector is not doing fine. America's families are not doing fine.

According to a June study by the U.S. Federal Reserve, the average family's net worth dropped by nearly 40 percent between 2007 and 2010. In 2010, median family income fell by 7.7 percent alone. There is no reason to think this trend has reversed itself in the last 18 months. In fact, the evidence may prove just the opposite.

President Barack Obama's agenda based on increased regulation, reckless spending and higher taxes has increased economic uncertainty and created an environment in which businesses are afraid to invest and hire new employees.

Obama repeatedly refers to "revenues" not "taxes," just as he refused to allow Obamacare to be called a tax. That is, until the Supreme Court called his bluff. Taxes are not the same as revenues. The reason is very simple. If you tax Americans at 0 percent, you get no revenue. And, if you tax Americans at 100 percent, you will also get no revenue. Why work if your money will simply be redistributed by Washington? The key is to find the sweet spot, where the government is forced to cut its spending and the people are not overburdened, especially in a recession.

Last month, the Commerce Department confirmed that GDP grew by an anemic 1.9 percent in the first quarter of 2012. The latest monthly jobs report confirmed that private sector growth has stagnated and that job creation is unable to keep up with population growth. Under Obama's failed economic model Americans have been forced to suffer through 41 consecutive months of unemployment above 8 percent, causing millions of Americans to give up looking for work altogether. On top of that, now Obama wants to raise taxes on already struggling small businesses.

With job creators unable to expand and hire, families need all the help they can get. "Taxmaggedon," as it's been labeled, may just prove to be the real 2012 doomsday story.

Stopping this onslaught will take not only legislative will, but a change in occupancy at the White House.

Some pundits assume Obama and Congress will reach a compromise on tax policy. However, given Obama's announcement this week (one that reverses his previous position) to raise taxes on small business owners, there is no reason to believe taxes will be going anywhere but up should Obama be re-elected.

With no third term to face and no repercussions to exercising his veto power, Obama could effectively block any bipartisan tax reform Congress offers that he doesn't approve of.

That is why we support Speaker John Boehner and Majority Leader Eric Cantor's efforts to extend all the current tax rates, and by doing so ensure that no American faces a tax increase during these difficult economic times.

It makes no economic sense to raise taxes on small businesses as millions of Americans struggle to find work. By preempting these scheduled tax hikes, we can add certainty for our job creators and prevent further reductions in family incomes.

Congressman Bill Huizenga represents Michigan’s Second Congressional District and Robert Genetski is an economist at classicalprinciples.com. 

Read the article online at the Detroit News' website HERE