Tax Increases Won’t Create Jobs
by Rep. Pete Olson (R-TX)Recently, my colleagues in the U.S House of Representatives passed a bill that will undoubtedly further harm our already weakened economy by discouraging investment in businesses and real estate. With national unemployment at 9.5% and no sign of relief in sight for the real estate market, now is no time to be discouraging this type of investment and the jobs that it creates.
The American Jobs and Closing Tax Loopholes Act (HR 4213) that passed the House by a narrow margin included an extraordinary tax increase on carried interest returns from successful investments by real estate, venture capital, and private equity partnerships. This revenue is currently taxed at the 15% capital gains rate, which is already scheduled to increase to 20% next year. Carried interest provides incentive for investment partners to take the risky investments that are needed to create jobs and boost the economy.
The U.S. Senate expects to vote on the bill in the coming weeks. Senator Max Baucus introduced a compromise amendment that would tax a smaller portion of the carried interest revenue at the new higher rates, but the impact of any tax increase on carried interest will still be harmful and widespread. I will not vote for any bill that includes a tax increase on carried interest, and I will urge my colleagues to join me in opposition.
What’s most alarming about this tax rate increase is that it is deeply punitive on the very businesses we need to help stabilize our economy. The increase would overturn decades of partnership tax law, and these partnerships would be the only businesses in the country whose enterprise value would be taxed at the income tax rate rather than the capital gains tax rate. These partnerships would be unfairly punished for the mistakes of a few Wall Street managers, despite the fact that these partnerships are in the best position in our economy to continue to create and grow businesses and jobs.
Additionally, the carried interest revenue is often pumped right back into the economy. Typically investment partners use the revenue of successful investments to invest in new small businesses and commercial properties, and expand and restore existing investments. This leads to job growth and economic investment in communities.
The Private Equity Council just released a study on the impact of a tax increase on carried interest. They found that a tax increase of just one percentage point would cause investment to decline by $1.8 billion. The House bill’s proposal would cause investment to decline by $27 billion.
Without the tax increase, these partnerships will be investing $27 billion in jobs and the economy. That’s a lot of money, and a lot of jobs.
It’s clear that a tax increase, especially an increase of the magnitude passed by the House, would be a bad move for the economy. Our nation must focus on getting real estate investment, employment rates, and the general economic outlook back up, not loading down the economy with unfair tax increases.
I’ll be voting against the tax increase on carried interest when it comes back over to the House, and I urge my Senate colleagues to do the same.
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99 Comments
Peter Orszag is resigning, we need to put Art Laffer in his place!!!!
Does anyone in Washington D.C. actually know how to stop the USA from imploding from the incredible debt that has been put up the American people? I have my doubts…
Well, if businesses aren't taxed, then where is the money supposed to come from for all the social engineering programs? We just need to hold our breath and wait for trickle up economics to work. Any minute now, all those winos and crackheads that got "tax cuts" should be starting their own businesses, and they'll be hiring millions of new employees, you just wait and see.
Fred
Congressman Olsen, until we can eradicate the buffoon gene, we will undoubtedly have to deal with fool hardy attempts at generating revenues by tax increases. The commercial real estate foreclosures are now starting and with that, we will see more banking troubles. Of course, this will be another excuse to print more money in the name of rescue. It will be another excuse to indenture our future generations and an even bigger excuse for people to go to the polls each and every election. The nation will begin voting just as New Hampshire has for decades, early and often.
What part of……We need tax cuts……don't D.C. ( better known as dumb chumps) understand?
The US economy is a Ferrari, and the fools in Washington that are behind the wheel are all Mr. Magoo. http://rds.yahoo.com/_ylt=A0oGdFLArSBMU94AHexXNyo...
This is the real magic of the phrase "jobs created or saved." Tax increases like these put the screws to private business and investors, but they "save" union jobs that the unions have rendered unsustainable. For a little while, at least; until it's time for the next tax increase…
As for the Laffer Curve, any suggestion that higher taxes don't equal increased government receipts is fat-cat propaganda as far as the left is concerned.
.
Our current iteration of government exists solely for the convenience and wealth of the politician. Raising taxes will only create more of them.
If you feed something, it grows. If you starve it, it dies.
.
Jobs?
If Obongo wants to create jobs, he could bus all the unemployed to the Gulf, give them all a mop, and tell them to start swabbing oil from the "Obama Tar Pits".
tax increases create all sorts of jobs, in government. just look at the healthcare bill, all the extra work the irs needs to do, will require all sorts of new people there. when you create a big beast, you need lots more people to feed it, and manage its care. so we need to turn uncle sam into a little hamster, from the whale it is today.
The nit wits on the hill don't even get armchair economist status. I suggest they call a couple of pros in for advice. Perhaps they could start with Dr. Williams and Dr. Sowell.
Morning P2O great to see you back! ……Agreed on that! Before too long monopoly money will be worth more than ours.Ooops…..it already is!
In 1917 it was easy to take over a country of uneducated peasants with promises of a good life for all. Today it's ridiculous to wave the banner of a better tomorrow while destroying the jobs of today. It can't work. Simple. But the agony the attempt will put this country through isn't worth it. Any politician who doesn't stand up to this administration in no uncertain terms is guilty of complicity in the attempted destruction of this country. Obama shaking down BP is the just one of the more visible tactics this dictator uses. He lies constantly. He is not upholding the constitution. He is a traitor.
That's too damn sensible! Common sense isn't allowed on the hill.
The only jobs that will be created is the seiu, acorn thug groups. Running around the streets with clubs in hand ready to smack down anyone with an "impeach obama" bumper sticker on their car.
If this economy doesn't improve soon a wino or crackhead can just take over my business, I'll probably have to sell it for a bottle of MD 20/20. With all of the government disincentives the wino is probably just as likely as I am to make a profit.
On second thought the government does not allow me to lay myself off and draw unemployment, so the wino is probably not interested. Now accepting bids.
With all due respect sir, . . . . . . duh.
"these partnerships will be investing $27 billion in jobs and the economy. That’s a lot of money, and a lot of jobs"
That's a lot of jobs when private interests make the investment. When government spends this kind of money they create 14 jobs, save 57 squirrels, and build a turtle bridge to nowhere. Keep fighting congressman. We'll be watching. And soon, we'll be voting.
I'm sorry, but Art isn't qualified to work in a democrat administration. He hasn't cheated on his taxes.
Thanks, needed to come out and clear the noodle a bit. Seems most have been very busy. The real pisser in all of this seems to be that fixing the economy is the last thing they really want to do. There is more than enough evidence that taxing more and spending more doesn't fix anything. Keynsian economics sounds wonderful but has no historical proof that it works. Private sector investment makes the machine roar with jobs, products and liberty. China seems to have it down. Very sad indeed that the Chicoms get it and the hill of beans can not get it.
lol, yeah, and pigs will fly, fairies will come out your butt and sprinkle pixie dust all around curing all the world's ills.
Or Nancy Pelosi's bar tab.
It's all about "Crime Inc."…….BTW if you didn't catch last nights Beck show, you may want to, it will make your blood boil.
With these regressives, it's not about creating jobs. It's about taking money away from the rich (in this case, anyone still with a job) and redistributing it. The recipients are those the democrats can form into a voting block (gay/lesbian, black, hispanic, illegal's, the unemployed, teachers and their unions, college professors, government employees). Do you want to see where your money is being spent?….. just look at those groups and you'll find a lot of it.
You'd think those in Congress and the the guy in the White House would take notice that Russia, formerly the mother of all things communist, has implemented a 13% flat income tax and eliminated the tax on capital gains altogether to stimulate economic growth in that nation.
Instead those in Congress and the guy in the White House are proposing substantial tax increases and more deficit spending to further their agenda of wealth redistribution. Don't they realize that Russia rejected collectivism and recognized capitalism is the best way to duplicate what the U.S. accomplished over the first 230 plus years of its history: the greatest economy, creation of wealth and individual freedom the world has ever known?
Can you name just one thing government does better than private enterprise? Can you name just one thing government does cheaper than private enterprise? Google: LearnfromtheGiants.com (The lessons of the most successful people who ever lived.) Share them with your "Obama loving friends."
Good luck. I work for a company and employ sales people who call on the real estate vertical. The real estate vertical market still cannot get financed. Companies that have been around for a long time, show they still are making some money do not get financed. Nothing has changed.
Morning P20. There have been bank failures every week or two for eighteen months.
http://www.fdic.gov/bank/individual/failed/bankli...
Sorry, those jobs are reserved for Union contractors from CA. Out of work Louisianans aren't eligible.
Fortunately for Mr. Magoo and his viewers, he always made it through repeated blunders, I have my doubts that we will be that lucky. Stupid and Evil are a scary combo.
Thanks. RE is dead right now because banks aren't lending even if a client has perfect credit. I think banks are holding their breaths because this regime is hostile to Capitalism.
Morning FC. Yes there have and more are coming. These will be huge groans of insolvency in the commercial real estate market. The ship I fear, is going down.
What are you talking about? They are perfectly executing their tyranical plans.
NObama and his administration is destroying the economy, increasing our debt, increasing people's dependency on the fed gov, increasing State's dependency on the fed gov, dividing the country with class warfare and racial differences. They are setting us up for a radical 'Change' to tyranny and sociaIism. They are succeeding.
We must stand up and fight back. Do not accept this un-constitutional direction we are going in. Rock the frickin VOTE in November!!!!
Sheeesh, I have been requiring plasm infusions daily to replace cookoff. I don't know if I can handle any more boiling blood. LOL
Or obama's legal defense fund.
Mr. Olsen… Thank you for supporting the Fairtax. Just one simple Bill and all of this nonsense goes away.
Keep up the Texas size fight!
Thanks for the read and keep fighting, please.
Edited: Originally I mistakenly referred to you as a Senator. I apologize for the oversight.
The Russians are smart enough to know that all the investment capital that's being driven out of the US has to go somewhere. That's the only reason they've eliminated capital gains taxes. Once obama has crushed the American economy, Russia will take control of those investments, because after we're gone there will be no where else for investors to go.
Yeah, Magoo always makes it through, but it's the Ferrari (economy) that I'm worried about.
I'll drink to that.
I'm beginning to wonder if the guys up on Capitol Hill who create or vote for these bills ever passed basic economics. All signs thus far point to "no".
Part 1 of 2: You said "Well, if businesses aren't taxed, then where is the money supposed to come from for all the social engineering programs?"
I explain it like this. It's not just social engineering, but the notion that Modern Liberals/Progressives actually dislike business. In other words, it's not that they need the money from businesses, but that, independently of the Social Engineering mindset, they need to tear down businesses.
We all need to peel the onion a bit more as it's all deeper.
In general, Modern Liberals hate success. Normal people measure success as when things are better or can get better. Modern Liberals measure success as when things are "equal". It's a huge difference.
In the Modern Liberal/Progressive mind, if everything is "equal", all of our societal problems will go away. No arguing, no fighting, no war, no poverty, etc. It's Utopian.
Part 2 of 2: They literally drive everything off this thought process.
But to force everything to be "equal", they have to treat people unequally! In other words, their ideas can never work – AND THEY KNOW IT.
This is where the Socialism comes from. Since they think their ideas are so pure and so good, they think they have the right to control others. In other words, they think they are helping people!!!!
Back to businesses. Since businesses produce success, Modern Liberals/Progressives HATE businesses. Success means things are more unequal so they tear it down. It's that simple.
All of the nasty side effects DO NOT MATTER TO THEM. You can see the effects of their ideas in the inner cities. After 50 years of liberalism, about all we can say is that there is a lot of hopelessness, despair and death. But to the Modern Liberal, everything is going along as planned. It's a mental disorder that when put into policy ends up hurting people – always.
I would rather have a VAT tax instead of a flat tax. (Of course this is AFTER the other taxes are done away with). A VAT is better (IMHO) than a flat tax because everyone will have a stake in the game, unless you find a way to buy everything underground. A flat tax still keeps too many people as takers instead of givers.
Humorous cartoon on "The Job Creation Myth" at http://drawfortruth.wordpress.com/2010/02/18/real...
If you haven't seen this yet . . . it may make you smile.
Maybe Wile E. Coyote instead of Magoo?
Yeah, don't insult the man! (wink)
And the VAT is working beautifully in Europe.
Congressman, if our elected officials were serious about the American economy, their own constituent’s employment (not their vote) and the fundamental restoration of our country, all of you would begin to dismantle the economic killing machine of governmental departments. Starting with:
1. Department of Education
2. Department of Agriculture
3. Department of Transportation
4. Department of Energy
5. Department of Health and Human Services
6. HUD
7. Department of Labor
8. Department of Interior
These 8 alone will reduce the overbearing, extortional regulations that are killing our economy, in conjunction with eating Taxpayers resources to the bone. Yes, 500K public sector union persons will be unemployed. Yet, with the budget and deficit reduction of $1.4 trillion+, the Taxpayers will be able to begin creating jobs with a cost savings that equals to $4800 for every man, woman and child US Citizen.
Just do it!
I agree to a point, but I don't think liberals want to tear down businesses to the point where we go back to an agrarian economy (other than the really far left environmentalist loons), they like their creature comforts too. They just think that big business gets too uppity and they fear it because they don't understand what they're dealing with.
I think they are going to exhume Lenin and appoint him……
The one and only thing government does better than private enterprise is screw up.
I would also recommend the discontinuation of the EPA, OSHA, DHS, stateless department, and our continued support of the failed useless nations.
I can't wait to get some patriots in the Congress. Maybe then the investigations will begin and shortly there after, the trials. Should those investigations not occur. We the People must begin them with the brightest and most patriotic attorneys we can find. This is high treason, plain and simple. Had to love the village idiots face when Garrett asked him about the loan to Petrobras.
No.
You are confusing the jobs bill with Obamacare.
The tax cut part.
Before Maobama and his merry band of islamocommiesocialists are through the Ferrari will be turned into Fred Flinstone's Rockmobile!
How about we tell the illegals it's pompadour oil? Problem solved. Please libtards no hate mail. IT'S A JOKE!
Morons are running our country into a ditch. These people do not understand the basic Econ 101.
———————————————————–
Obama's Presidency summed up in one photo: http://bit.ly/bbu9HZ
Yes. And we are currently averaging one home foreclosure every 90 seconds. But…the worst is behind us, right? I mean, we have Hussein's word on that…so it must be true, right?
Personally, I am looking forward to the convictions and executions! We need a few suits hanging from lamp posts to wake these crooked pols up.
That was a great episode, wasn't it? I can't believe they haven't tried to have Glenn killed yet! Thank God for my DVR. I never miss an episode with it. I guess I got over my anger at him for tossing us out in the "street". It was probably for the best, anyway. Who knows how many more lists we'd be on if he'd let us stay on the Project.
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You are correct! That was the recent news – most of the job increases were in government. That's just what we need, more pigs at the trough!
[...] » Tax Increases Won’t Create Jobs – Big Government [...]
Has the government and people in charge of the hill not learned anything from historic examples like the Great Depression?! The past will repeat itself if not learned from, thus we have had depressions since then. An increase in taxes will discourage the investments in businesses according to basic economics. It is an apparent fact that government jobs won't cure depressions. Check out this article for reasons why:
http://www.intellectualtakeout.org/library/progre...
"Above all, [the prince] must abstain from taking the property of others, for men sooner forget the death of their father than the loss of their patrimony." Niccolo Machiavelli, "The Prince", 1513
Why are serious spending cuts never on the table?
It's a matter of statistics. Prior to the 60's and 70's, Modern Liberals/Progressives were small in number. But during the 60's and beyond, their numbers grew and they really worked to undermin eour foundations. Now, they run huge parts of our culture.
Conservatives were asleep at the wheel because we couldn't fathom that Modern Liberals/Progressives actually wanted what they say they wanted. We couldn't fathom that they didn't want things better. We couldn't fathom that they want things equal above everything else.
Find the time to watch the video "How Modern Liberals Think" by Evan Sayet. Evan used to be a writer for Bill Maher. It's very good.
It's at http://www.youtube.com/watch?v=eaE98w1KZ-c
I was laid off after dedicating my time and giving everything I had to give to my company. What did I get in return? I was laid off even though I had more seniority than most of my co-workers. And now no extension after 26 weeks. What a slap in the face. Jobs are hard to find. School is out and even college grads can't find work. My neighbors live in houses paid for by the government. They get free food, utilities and money for their children. I have watched as they sit on their front porches without a care drinking their free alcohol. I have seen them supplimenting their income by selling illegial drugs. Why do some people slip through the cracks and others have to pay the price? The way I see it my hard work paid for those who don't want to work and only care about getting around the system. Doesn't anyone else see it that way? How about cutting off the lazy Americans who haven't worked a day in their lives along with their parents and grandparents and give us some money for a change. How much is Welfare costing every day? Whittle off some of that money and send it to deserving people. PASS THIS BILL!!!
[...] » Tax Increases Won’t Create Jobs – Big Government [...]
[...] » Tax Increases Won’t Create Jobs – Big Government [...]
[...] » Tax Increases Won’t Create Jobs – Big Government [...]
[...] » Tax Increases Won’t Create Jobs – Big Government [...]
[...] » Tax Increases Won’t Create Jobs – Big Government [...]
[...] » Tax Increases Won’t Create Jobs – Big Government [...]
I just heard on Fox that new home sales were down 33% in May.
[...] » Tax Increases Won’t Create Jobs – Big Government [...]
[...] » Tax Increases Won’t Create Jobs – Big Government [...]
[...] » Tax Increases Won’t Create Jobs – Big Government [...]
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