The Voice of Young Conservatives Blog

As the Democrats quickly approach a likely trouncing in the November midterms, they are ready to jump on any opportunity to play politics with the American People’s money.

The newest round in the Democrats political game is the fight over extending the Bush-era tax cuts, which are set to expire next January. Their expiration will amount to a roughly $500 billion tax hike over the next ten years. The Republicans, the party of economic growth vis-à-vis the free market, and even some Democrats, want to permanently extend all of the tax cuts. Unfortunately, the majority of Democrats, are desperately looking for some way (or rather, someone) to pay off their extravagant spending binge. So why not soak the rich, so to speak? Nobody likes them!

Of course, this puts the Republicans in somewhat of a bind. If the Democrats were to put forward a bill that extends middle-class tax cuts, while raising taxes on the wealthy, what will Republicans do?  Will they go against their principles and vote for a bill that ends up raising taxes while there is still so much spending to cut? Or will they vote against the bill and push hard for extending all of the tax cuts? Should they do the latter, the Democrats will pull out their classic class-warfare line, insisting that Republicans are the party of the rich and care nothing for the beloved middle class.

Democrats may not be able to craft sound policy, but they sure are good at deceptive politicking.

In response to their tactics, Republicans and Conservatives alike need to expose the fallacies of this Liberal demagoguery. They must call the Democrats out and show how raising taxes on the so-called wealthy will not only hurt all Americans, but also slow down economic recovery.

How can we do this?

First of all, Republicans must point out that tax hikes on the “wealthy” are actually tax hikes on a significant number of small businesses.  A memo recently released by Americans for Tax Reform summarizes the effect of the coming tax hikes on small businesses:

Unlike corporations, small businesses usually don’t pay their own taxes. Rather, business profits flow through to the business owner. The business owner pays taxes on her small business by adding the profits to her income tax form. Therefore, personal income taxes are the same thing as small business taxes…

There were 30 million tax returns reporting small business income in 2008. On net (profits reduced by losses), these owners reported business profits of $981 billion. A large chunk of this net profit–$488 billion—faced taxation in households making more than $200,000 per year. A majority of small business profits will face a tax rate hike under the Obama-Pelosi-Reid plan.

Democrats relish in painting Republicans as the party of the super-rich and big corporations. But the truth is that Republicans’ support for extending all of the Bush tax cuts is an extension of their support for small businesses, which lay the heart of America’s economy.

This brings me to the second argument Republicans must make to the country:

Democrats don’t have a clue what they are talking about when they say that their plans to raise taxes won’t affect job creation and economic recovery.

Small businesses employ over half of America’s private sector employees and represent 99.7% of all employer firms.  At a time when unemployment is still hovering close to the double digits, how on earth could Democrats even be thinking about raising taxes on small businesses?

And, more importantly, what on earth could left-leaning, tax-evading Treasury Secretary Timothy Geithner be talking about when he said, “I do not believe [these tax hikes] will affect growth?”

If small businesses have less money, they will higher fewer people. If fewer people have jobs, fewer people will spend money, and the economy will contract.  That’s basic Econ 101. Most college freshmen at any university in the country could follow this line of logic.

This kind of talk coming from Geithner is utter nonsense, and Republicans would do well to call Democrats out on it.           

And when we take the offensive in this tax-cut fight, the public will listen.

Polls show that a growing percentage of the public thinks taxes are an important issue.  68% of voters say that taxes are a “very important” issue.  More notably, 45% of voters would prefer a candidate who opposed all tax hikes, rather than one who wanted to raise taxes on the wealthy.

Support for low taxes concerning small businesses and all other Americans has been and remains a winning issue for the Republican Party. The American People know that across the board tax cuts translate into more jobs, more wealth and more growth.

If Republicans take control of this tax debate, we have the ability to make these tax hikes yet another losing issue for Obama and his band of merry Democrats.

Let’s get to work.

By Avi Snyder (edited by Samantha Cohen)