I thank my friend from Missouri for hosting this hour and for focusing on this important issue. At a time when we are just weeks away from facing what would be the largest tax increase in the history of our country, we have been pushing to…
I thank my friend from Missouri for hosting this hour and for focusing on this important issue. At a time when we are just weeks away from facing what would be the largest tax increase in the history of our country, we have been pushing to make the current tax rates permanent, to prevent, to stave off what would be that large, massive, job killing tax increase that is pending on January 1 if no action is taken. Unfortunately, the liberal leadership that is running this Congress right now will not address this issue in a proper way that ends that uncertainty.
You know, when you look out there throughout the country, when we talk to small businesses in our districts and all throughout the country, so many companies would like to hire, would like to make investment, even in these tough economic times; but because of the uncertainty created by the threat of these massive tax increases, it is holding back the economy. It is holding back the ability for these companies to make that investment and to create those good jobs. It is so unfortunate because we are at a point where there should be, and there is, I think, bipartisan agreement that, especially now in tough economic times, you shouldn't raise taxes on anybody, especially those small business owners who create the bulk of our jobs in this country, and yet that is exactly what they are facing and it is exactly what we are hearing from the people who say that they can't make decisions, they can't make those investments because they are looking out and they are seeing if Congress takes no action, or tries to play class warfare, which would be even worse, to try and pick winners and losers and say some people are going to see a tax increase and some aren't, what a bad message that sends to those people who are trying to get the economy back on track.
What is so sad about all of this is that history tells us, history tells us, whether you go back to John F. Kennedy, Ronald Reagan, you can go to President Bush, when taxes were cut, especially when you did aggressive tax cuts, not only did you see job growth, but you also saw a tremendous amount of money, billions of dollars more coming into the Federal Government, which goes against this myth that is out there, the President and others say, we can't afford to cut taxes.
Well, I think we can't afford not to keep the current tax rates. We surely can't afford to have a tax increase; but history tells us, any administration you look at, you can go to 1920, you can go to the sixties, the eighties, and 2003, when taxes are cut, job creation follows and more money follows and flows into the Federal Government. The reason we get deficits is because Congresses, both Republican and Democrat, have spent too much money. The deficits come because we spend too much money.
So the formula that has always been proven to be successful and the formula we should be following right now is cut taxes, make sure nobody's taxes go up and control spending at the same time. That way you not only stop getting more deficit spending, but you can actually get on a path to balancing the Federal Government budget, which is what we really need to do.
I thank the gentleman again for yielding.
The chart that you just showed really lays out in a very good graphical form what really does happen when you cut taxes, and unfortunately you don't hear this on the mainstream media. It's something that a lot of the pundits try to ignore. It's unfortunately something that the President I think has tried to cloud over and, in fact, speaks in contradiction to what really did happen when taxes were cut. You know, and the President is going around saying that he can't afford to keep the tax rates where they are and he needs to raise taxes on certain people, otherwise the government will lose money.
The problem with that is, it flies in the face of history. It flies in the face of facts; and in fact, your chart shows just what really did happen when taxes were cut for 48 consecutive months after those 2003 tax cuts. For 48 consecutive months our country had job growth. Every single month for 48 months, more American people were working than the month before, and during that same period of time of unprecedented job growth, 8 million new jobs were created, and your chart shows it very clearly. Not only were those 8 million jobs created, but the Federal Government took in over $750 billion more money.
Of course when I say that, somebody listening might say, well, hold on a second, the President just said, if you cut taxes, it costs money. If you maintain these current rates, rather than raising taxes, you have got to raise the taxes because it's going to cost the Federal Government money. The opposite happened, anytime in history, not just in 2003.
As I said in the 1980s when taxes were cut under President Reagan, tremendous job growth and tremendous growth in revenue to the Federal Government. Now, yes, we had deficits, because even though the Federal Government was taking in more money, they still spent even more money than all of that coming in, which gave you a deficit. But if they'd controlled spending, if they would have just frozen levels and had normal cost of living increases, just normal growth, you would have actually had surpluses because more money was coming into the Federal Government, and the same thing happened in the 1960s when President Kennedy cut taxes.
So this isn't a partisan issue, but this is history. Let's follow history. Instead of people making things up and saying things that are just flat out untrue, if we go back and use history as our guide, when we cut taxes in this country, job creators go out and create jobs, and the facts prove it.
I used the President's own Web site when I pulled the numbers to find out what really happened in terms of job growth which we confirmed on the President's own Web site and in terms of more money coming into the Federal Government. So when they say that they can't afford to keep the current tax rates the way they are, they think they need to raise taxes in order to bring in more money, just the opposite is true.
You know, when you look at these charts, all it really is, you know, is a reflection of what really happened historically. They say, If you don't learn from the mistakes of history, you are doomed to repeat them. You can flip that around and say, Go look at what has always been proven to work. There are things that have been good and bad throughout history. You can go into the 2000's and look at 2003 when taxes were cut. There were some good things and some bad things that came out of that.
The good thing was, when the taxes were cut in 2003, you had, as your chart shows very clearly, a tremendous increase in Federal revenue, and you had a tremendous increase in job creation. Eight million jobs were created. The bad thing that happened was that you had deficits, but it wasn't because of the tax cuts. It was because more money came into the Federal Government, but Congress spent even more than that. When Congress spends more money than that which comes in, you end up with a deficit.
You can control that not by raising taxes, because if you raise taxes--again, use history as a guide. When taxes are increased, one of two things happens. In some cases, you'll get a flat line--you'll get a flat revenue intake--but in many cases, you'll actually get a decrease. Even though you're raising taxes--and it might seem intuitive to some liberals--what happens is it's the cost of doing business. If a company is looking to hire people and now it costs more money in America to create that job or to manufacture that product, then it explains why so many of our manufacturing jobs have been leaving this country and going to other countries.
The tax increase that President Obama is creating might be good for economies, but it's good for foreign economies because it's pushing more and more investment out of this country. So the jobs that will be created will be created in countries like India and China and other places where they don't punish somebody for manufacturing. In our country, unfortunately, there is this mentality, and there are some in this leadership who continue to try to play this class warfare game and pit one American against another.
What we ought to be doing here in Congress and at the White House is working together to put policies in place that will help everybody, that will not just help the job creators but will help the people who are struggling at the bottom, the people who want to find jobs. There are millions of Americans out there who want to find jobs.
You know, in my State of Louisiana, we are seeing the negative repercussions of these policies coming from President Obama: how it's costing us jobs with this permitorium, as we call it now, on drilling, and how the President bragged about lifting the moratorium on drilling but now has replaced it with a policy where they're just not issuing permits.
Then today, just today, the President and Secretary of the Interior came out and said they were going to shut off more areas around the country that were getting ready to be opened for the exploration of energy. They're shutting those off. So now they're not issuing permits in the Gulf of Mexico, which, according to the White House, has already led to about 12,000 more Americans losing their jobs. This is not because of a downturn in the economy. Because of the policies of President Obama, 12,000 more people have lost their jobs, and billions of dollars have left the Federal Government and are going to foreign countries. Our energy security in our country has decreased, and we are now more dependent on foreign oil because of the policies of this President.
So, on one hand, he is trying to raise taxes on our small businesses, which, as your chart shows, is going to devastate the economy and is not going to bring in more money to the Federal Government. On the other hand, he has got policies, like the permitorium and the lack of open areas for the exploration of drilling for natural resources, which are taking away what would have been thousands of more new jobs, and now he is shipping those jobs to other countries, like Brazil and Egypt, which is where some of these rigs are going.
You know, it's sad to think, but it's true. It's a sad day in America when it's a better business climate to do business in Egypt, which is where some of these rigs are going, than in the United States of America because of the President's own policies. This is reality. This is what is really happening, and that's why we have got the job creation problems. That's why we have got the lack of jobs we have today. It is because of the policies of this administration.
Yes, I was.
You know, the gentleman referred to the meeting that we were both at today with Art Laffer, the brilliant economist who worked for President Reagan in the White House, who helped create a lot of those tax policies that gave us that unbridled economic growth. He goes into detail and talks about the decisions that went into that and what works and what doesn't work.
And there are things that don't work, but there are things that have been proven again historically throughout time.
Going back to the 1920s, you can go before that, things that you can do that have always worked in terms of cutting tax rates. And there are levels where you get above certain levels, and in the 20s is where you are starting to get into dangerous territory. Right now the President is trying to bring the highest rate up to 39.6 percent taxes, plus he's going to try to continue to allow this death tax to go to 55 percent. It's at zero today. If someone were to die today and have a family business that they built up over their lifetime, they could pass that onto their family, and there is a zero percent tax on their passing away, a tragic event that shouldn't be made even more tragic by government coming in and confiscating 55 percent of their business to the point where the children's decision, more of their grief is dealing not with the loss of their loved one but now the fact that they have to dismantle the company that their father built for his entire lifetime just to pay the taxes to the Federal Government. And that will happen. Starting January 1, that death tax goes up to 55 percent. It's one of the most onerous, obnoxious, and evil taxes, because you're talking about people who have already paid taxes to create that wealth.
I think one of the other things Art Laffer talked about today is if that person, instead of building up that company, creating that wealth and creating all those jobs that went along with it, if he would have just gone out and blown the money, he wouldn't have been taxed on that. There's no tax on just going out and spending the money and blowing it. But if he built his business and created hundreds of jobs and then wanted to pass that on to his children, the government is going to come in--starting January 1 if Congress doesn't take action--and tax that business 55 percent just by the virtue that that business owner passed away, to the point where now the family has to sell and dismantle the entire business and maybe have to lay off all those employees just to pay the taxes. That's not what America is all about, that's not what made America great, and yet that is tax policy that President Obama wants to put in place starting January 1.
It is such a sad state of affairs that in the greatest country in the history of the world--and you and I both know we've got really serious challenges, we've got real big problems in this country that we're facing, but with all of those problems this is still the greatest country in the history of the world. But what that light of freedom, the Statue of Freedom at the roof of this building right here, the Capitol dome, what that statue stands for, and when you pass through Ellis Island and you see the Statue of Liberty, it represents a freedom that exists nowhere else in the world. All of that is at risk if these kinds of policies continue. I know that's a dramatic statement, but I think most people across the country have recognized that when you take into account the radical level of spending, the unsustainable level of spending going on here in Washington--trillion- dollar-plus deficits as far as the eye can see, the first trillion- dollar deficit in the history of our country was last year, only surpassed now by this year's, and next year looks to be just the same-- everybody knows we can't sustain this level of spending. And then you look, and the President and Speaker Pelosi's plan for taxes is to raise taxes on American families and small businesses. And the American people get it. They know what that means to job creation. They know it's going to stifle job creation. It's going to make it harder for businesses to compete globally. And for many of them, it's going to make it harder for them to even keep their doors open. And yet those are policies that are continuing to be put in place by this administration.
But people know, I think--what's more than all of that, to a small business, if they don't make as much money as they did last year--you want
everybody to be able to be profitable so that they can continue to create jobs. But I think to most people what is the most concerning is not maybe this year they're making less than last year, that's bad, but what I think is concerning most people is that the one great tradition of this country, from the day George Washington took that oath of office until this day today, every generation has had better opportunity than the one that came before them. Every single generation in the history of our country has had better opportunity than the one that came before them. And I think we all know if we stay on this unsustainable path of spending and taxing, with unemployment like it is, the next generation is not going to have that same opportunity, and we cannot let that happen. I don't think the American people are going to let that happen. And I think that's why in November, in that historic election that was just held a few weeks ago, people said they're not sitting on the sidelines anymore because they know what's at stake. They know we can't keep going down this road. And if we want to keep the light lit on that Statue of Freedom, if we want to make sure that the promise that's envisioned and represented in the Statue of Liberty, if we want to keep that torch lit for the next generation, we have to make serious changes right now starting today.