Even before the President declared in Cleveland yesterday that he would not compromise on extending the Bush tax cuts on the highest-earning Americans, key business leaders were drawing the proverbial “line in the sand” on this issue.
In what is almost certain to be a repeated theme from the business community before the fast-approaching midterm elections, two business leaders who spoke to HUMAN EVENTS said without hesitation that Obama’s ending of the Bush cuts was a tax increase.
Not only is the business community sharply opposed to tax rates going back to their pre-2001 levels for couples making more than $250,000 a year, but they are also unimpressed with Obama’s call for $180 billion in selected tax credits and infrastructure spending.
One key player in the economy from the Bush Administration felt the latest Obama package was simply more stimulus spending and higher taxes.
“We should not do anymore government stimulus and we should not raise taxes on anyone,” former U.S. Secretary of Commerce Carlos Gutierrez told HUMAN EVENTS. “It is not right to ask the American people to pay for inefficient programs that are designed to get votes for the President’s party.”
Gutierrez, a former chief executive officer of the Kellogg Company, predicted that “the American people will pay dearly for this administration’s policies for years to come.”
The warning issued by Gutierrez could easily be a clarion call for a business-backed assault on both the Obama economic initiative and on congressional Democrats who support the President.
Jay Timmons, vice president of the National Association of Manufacturers, agreed. Referring to the selected tax credits supported by the President, Timmons told HUMAN EVENTS, “At face value, a 100% tax credit for plants and equipment and an expanded tax credit are extremely good for business and the economy and jobs.”
However, he quickly added, “unfortunately, the most effective economic growth tool is an extension of the ’01 and ’03 tax cuts, which the President refuses to do in total. Additionally, it is likely there will be a tax increase included which will raise energy prices and other taxes on business.
“You can’t fix one problem by creating two others,” Timmons said.
Reaction from other leaders of the business community is likely to pour in over the next few days, as the President and his congressional allies began the push to let the top Bush tax cuts expire. But the reaction is likely to be the same—that Obama is proposing a tax increase—and voters will be hearing a lot of that in the coming weeks.
“It’s a tax increase, isn’t it?”
When Human Events asked Karen Kerrigan what she thought of President Obama’s address in Cleveland Wednesday, that’s how the president of the Small Business Survival Committee reacted.
Kerrigan left little doubt that her committee planned to be in the forefront of efforts nationwide among small businesses to fight Obama’s “Cleveland cuts”—that is, permitting the Bush tax cuts on the top 2% of wage earners to expire and then advancing $180 billion in selected tax credits and infrastructure spending.
Coupled with the response of spokesmen for such durable business groups as the National Association of Manufacturers and the National Federation of Business, Kerrigan’s succinct reply was the latest case of a business association drawing the line in the sand with the White House on the economic front.
“We don’t think it will do much to help small business,” was how Bill Rys, tax counsel to the NFIB, reacted to Obama’s agenda.
Regarding the President’s call for tax credits for research and development, Rys told Human Events: “Only pretty specialized businesses will be able to take advantage of the R&D credits—some small manufacturers, software companies and the like. Most businesses will not benefit at all from these credits.”
Rys, onetime aide to former Rep. and House Ways and Means Committee member Melissa Hart (R.-Pa.) and U.S. Treasury Department official, added that the 355,000-member NFIB “had a lot of concerns” about Obama’s speech. Chief among them, he said, “was that some tax rates are going to go up.”
“The top 2% for whom tax cuts are expiring are those most likely to be doing the spending and doing the hiring,” said Rys.
“Businesses make investments, and they are the ones most likely to generate revenue.
“We’re not going to tackle the deficit until we tackle the recession first. And that means we need to get businesses going. What the President is talking about won’t do it.”