To the Editor:
I’m a small business owner/operator and an engineer by trade, so I make my business and economic decisions based largely on facts and numbers.
Thirty-one years ago, I graduated from the Virginia Tech College of Engineering, and embraced the Republican Party because I shared its values of personal responsibility, hard work and economic progress. The Republican policies of that time included some measures that would benefit the very rich, including a dramatic reduction in the marginal tax rates on the highest income earners, which had varied from 70 percent to above 90 percent in the prior decades.
I agreed with the Republicans that rates that high were a significant disincentive for some of the more productive individuals in our society. Republican policies also included welfare reform, which would place demands on low-income people to work at available jobs, instead of receiving public assistance. However, perhaps through some mixture of idealism and naiveté, I believed at the time that the Republican party's policy mixture that benefited the rich and was more demanding on the less well off was the result only of well thought-out analysis and concern for the greater good.
As the years went by and the Reagan-era tax cuts and eventually the Clinton era welfare reform passed, I expected the Republicans to see less need for this policy mixture. But instead, the Republican party has grown even more audacious in pursuing it—even if it had to ignore the economic history, and adopt some rather crank economic doctrine in doing so.
The core of current GOP economic policy is its unyielding support of a bill that the U.S. House of Representatives recently passed, but the U.S. Senate rejected, to extend the Bush tax cuts for the richest 2 percent, which lowered the top income tax rate from 39.6 to 35 percent. Conversely, both the House and Senate GOP bill would raise taxes on 25 million Americans by an average of $1,000, by eliminating or reducing refundable tax credits for children, college tuition and earned income.
In addition, nearly every Republican in Congress voted against a bill that would give every American a tax cut on the first $250,000 of household income because the legislation didn’t include extra tax cuts for income above that level. The Republicans, in their defense of these tax cuts that would give millionaires a windfall average tax break of $160,000, have ignored the last 65-plus years of economic history.
In fact, a new report by the nonpartisan Congressional Research Service concludes: “There is not conclusive evidence . . . to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth” (http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf).
Most people making over $250,000 do not create jobs because they make most of their money in the stock market. In contrast, 97 percent of small business owners who, like me, make under $250,000 are job creators.
It’s time to restore some balance to our tax system and insist that the wealthiest Americans start to pay their fair share. It’s not right to ask the middle class to pick up the tab for extending tax cuts for the richest 2 percent that would cost nearly $1 trillion in lost revenue over the next decade.
Unless Congress acts before the end of the year, all of the Bush tax cuts will expire. I urge Virginia’s congressional delegation to vote to end the Bush tax cuts for the richest 2 percent who don’t need them and extend them for the 98 percent of Americans and 97 percent of small business owners like me who can play a key role in restoring our economy.