In Senate Finance Committee hearings on theadministration's record $3.8 trillion budget proposal, ranking member ChuckGrassley, R-Iowa, said the proposed tax increases would hurt job growth.
"Too often, the other side views tax increases as anecessary imperative to a healthy economy," he said. "Fiscal historyshows it to be precisely the opposite."
"Appropriations are up 25 percent over the last twoyears," he noted, while American families and businesses have not had thatluxury. "Both sides agree small business is the key to a goal both sidesagree on: job creation.Yet thepresident's budget raises the marginal rate on small businesses by over 15percent," he said.
U.S. Chamber of Commerce executive vice president forgovernment affairs R. Bruce Josten said that the budget, if enacted, wouldballoon the deficit, dramatically increase taxes in a weak economy, andundermine American job creation.
"TheFY11 budget proposes even larger deficits and even more spending than lastyear's record-breaking totals," he said. "Over the next 10 years, theWhite House proposes to increase spending by 12 percent more as a share of theeconomy than it has averaged over the past three decades.Using its own numbers, theadministration's proposed budget deficits will cause debt as a share of theeconomy to increase by 13.6 percentage points."
While the National Association of Manufacturerscriticized the budget for its tax increases on business, it expressed supportfor the proposal to extend some key international and investment tax provisionsthat expired last year, and its recommendation to make the R&D creditpermanent.
"We hope Congress will move quickly on theseextenders and establish a permanent, strengthened R&D credit," saidNAM."Based on data from aMilken Institute study that the NAM commissioned, increasing the R&D taxcredit by 25 percent and making it permanent would create 316,000 manufacturingjobs and would boost real GDP by 1.2 percent."
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