CBO: Dem Tax Hikes = Recession + 9% Unemployment

August 22, 2012

CBO: Dem Tax Hikes = Recession + 9% Unemployment

Democrats’ Demands for New Tax Hikes to Feed their Spending Addiction Are a Recipe for Economic Disaster

A newly released Congressional Budget Office report confirms that the Democrats’ plan for huge new tax hikes and devastating cuts to defense will cause another recession and hike the unemployment rate up past 9%.
This report follows extensive warnings from top economists that the Democrats’ tax hike plan is the last thing the frail economy needs.
Sadly, this hasn’t stopped Democrats from demanding a huge new tax hike on small businesses to continue feeding their spending addiction, even though their tax hike will only make life harder for working families.

A newly released Congressional Budget Office report confirms that the Democrats’ plan for huge new tax hikes and devastating cuts to defense will cause another recession and hike the unemployment rate up past 9%:

CBO: “JUMPING OFF FISCAL CLIFF WOULD CAUSE RECESSION, DRIVE JOBLESS RATE TO 9 PERCENT”: “Tax increases and spending cuts from the ‘fiscal cliff’ would send the U.S. economy into a recession and drive the unemployment rate up to 9 percent by the end of 2013, according to fresh forecasts from the Congressional Budget Office.” (“CBO: Cliff Would Cause Recession,” National Journal, 8/22/2012)

UNEMPLOYMENT RATE WOULD HIT 9% BY END OF 2013: (“CBO: Cliff Would Cause Recession,” National Journal, 8/22/2012)

DEMOCRATS HAVE THREATENED TO USE TAX HIKES AS A “WEAPON” TO GET MORE SPENDING:

NO. 2 SENATE DEMOCRAT: TAX HIKES AND CUTS TO DEFENSE ARE A LOADED “WEAPON”: “Democrats believe Republicans might be willing to compromise once the spending cuts and tax increases are felt.

“‘That may be the only way to bring some Republicans into a position of talking,’ Sen. Richard J. Durbin of Illinois, the assistant Democratic leader, said late last week. ‘We’re not going to unload our weapons at this point.’” (Lisa Mascaro, “Congressional Democrats Dig In on Fiscal Cliff Scenario,” Los Angeles Times, 7/16/2012)

“DEMOCRATS THREATEN TO GO OVER ‘FISCAL CLIFF’ IF GOP FAILS TO RAISE TAXES”: (Lori Montgomery, “Democrats Threaten to Go Over ‘Fiscal Cliff’ if GOP Fails to Raise Taxes,” The Washington Post, 7/16/2012)

“SENIOR DEMOCRATS” ARE READY TO “PLUNGE THE NATION BACK INTO RECESSION” IF THEY DON’T GET THE TAX HIKES THEY WANT: “Emboldened by signs that GOP resistance to new taxes may be weakening, senior Democrats say they are prepared to weather a fiscal event that could plunge the nation back into recession if the new year arrives without an acceptable compromise.” (Lori Montgomery, “Democrats Threaten to Go Over ‘Fiscal Cliff’ if GOP Fails to Raise Taxes,” The Washington Post, 7/16/2012)

This report follows extensive warnings from top economists that the Democrats’ tax hike plan is the last thing the frail economy needs:

AP: “ECONOMIC RECOVERY IS THE WEAKEST SINCE WORLD WAR II”: “The recession that ended three years ago this summer has been followed by the feeblest economic recovery since the Great Depression. Since World War II, 10 U.S. recessions have been followed by a recovery that lasted at least three years. An Associated Press analysis shows that by just about any measure, the one that began in June 2009 is the weakest.” (Paul Wiseman, “Economic Recovery is the Weakest Since World War II,” Associated Press, 8/15/2012)

FEDERAL RESERVE: UNEMPLOYMENT TO “REMAIN ELEVATED FOR ANOTHER FIVE TO SIX YEARS”: “Federal Reserve officials agreed at a meeting in June that unemployment would remain elevated for another five to six years, but most did not regard that as a reason for the Fed to expand its efforts to stimulate growth, according to an official account published Wednesday.” (Binyamin Appelbaum, “Fed is Torn on Tipping Point for Action,” The New York Times, 7/11/2012)

FEDERAL RESERVE CHAIRMAN BEN BERNANKE: IF DEMS GET THEIR WAY “RECESSION WOULD OCCUR EARLY NEXT YEAR”: “The Congressional Budget Office has estimated that, if the full range of tax increases and spending cuts were allowed to take effect–a scenario widely referred to as the fiscal cliff–a shallow recession would occur early next year…”(Bernanke testimony before the Senate Banking Committee, Federal Reserve Web site, 7/17/2012)

STUDY: UP TO 10 MILLION JOBS COULD BE LOST FROM DEMS’ DISASTROUS PLAN: “The negative fiscal shock exceeds Gross Domestic Product (GDP) growth in any year over the past two decades, and when considering economic multipliers, the contraction could approach ten percent, which would amount to the biggest year-to-year decline since 1932. This upper-bound estimate would result in a loss of 10 million jobs, according to the administration’s methods.” (“New Study Examines Economic Effects of the Fiscal Cliff,” American Action Forum, 7/17/2012)

NATIONAL ASSOCATION OF MANUFACTURERS: 3.44 MILLION JOBS COULD DESTROYED BY SEQUESTER FROM 2012 – 2022: (“Defense Spending Cuts: The Impact on Economic Activity and Jobs,” National Association of Manufacturers, Accessed 7/18/2012)

EVEN OBAMA ONCE ADMITTED THAT TAX HIKES IN A FRAIL ECONOMY ARE A BAD IDEA:

OBAMA IN DEC. 2010: TAX INCREASE “WOULD HAVE BEEN A BLOW TO OUR ECONOMY JUST AS WE’RE CLIMBING OUT OF A DEVASTATING RECESSION”: “…tax rates for every American were poised to automatically increase on January 1st… would have been a blow to our economy just as we’re climbing out of a devastating recession.” (President Obama, Remarks At Bill Signing, 12/17/10)

OBAMA IN NOV. 2010: “IF WE ALLOW THESE TAXES TO GO UP… THE ECONOMY WOULD GROW LESS”: “If we allow these taxes to go up, the result would be that a lot of people most likely would spend less, and that means that the economy would grow less.” (“Remarks by the President and Vice President to Chrysler Plant Workers in Kokomo, Indiana,” The White House, 11/23/10)

ANOTHER BROKEN OBAMA PROMISE: “YOU DON’T RAISE TAXES IN A RECESSION.”(“Obama: We Must ‘Help Elkhart Reinvent Itself,’” MSNBC, 8/5/09)

Sadly, this hasn’t stopped Democrats from demanding a huge new tax hike on small businesses to continue feeding their spending addiction, even though their tax hike will only make life harder for working families:

TAX HIKE WOULD BE A $201 BILLION HIT TO THE ECONOMY: (Robert Carroll and Gerald Prante, “Long-Run Macroeconomic Impact of Increasing Tax Rates on High-Income Taxpayers in 2013,” Ernst & Young, July 2012, Appendix C)

710,000 JOBS COULD BE DESTROYED BY DEMOCRATS’ TAX HIKE PLAN: (Robert Carroll and Gerald Prante, “Long-Run Macroeconomic Impact of Increasing Tax Rates on High-Income Taxpayers in 2013,” Ernst & Young, July 2012, Appendix C)

1.8% DROP IN WAGES: “Real after-tax wages would fall by 1.8%, reflecting a decline in workers’ living standards relative to what would have occurred otherwise.” (Robert Carroll and Gerald Prante, “Long-Run Macroeconomic Impact of Increasing Tax Rates on High-Income Taxpayers in 2013,” Ernst & Young, July 2012)

JOINT COMMITTEE ON TAXATION: 940,000 SMALL BUSINESSES TO GET HIT BY DEMOCRATS’ LATEST TAX HIKE: “Congress’s Joint Tax Committee—not a conservative outfit—estimates that in 2013 about 940,000 taxpayers will have enough business income to meet Mr. Obama’s tax increase threshold.” (Editorial, “Off the Tax Cliff He Goes,” The Wall Street Journal, 7/10/2012)

MORE THAN HALF OF NET BUSINESS INCOME WILL BE HIT BY HIGHER TAX RATES UNDER OBAMA PROPOSAL: “And of the roughly $1.3 trillion in net business income, about 53% will get hit with the higher tax rates. This is because millions of businesses report their income as sole proprietors and subchapter S corporations that file under the individual tax code.” (Editorial, “Off the Tax Cliff He Goes,” The Wall Street Journal, 7/10/2012)

OBAMA’S NEW TAX HIKE WOULD HAVE SOME SMALL BUSINESSES PAYING HIGHER TAX RATES THAN GENERAL ELECTRIC AND J.P. MORGAN: “So Mr. Obama wants these businesses to pay higher tax rates than the giant likes of General Electric or J.P. Morgan. Does that qualify as ‘tax fairness’?” (Editorial, “Off the Tax Cliff He Goes,” The Wall Street Journal, 7/10/2012)

TAXMAGEDDON WILL COST AVERAGE FAMILY $4,138 IN 2013: (“Taxmageddon Costs Average Family $4,138 Next year,” The Heritage Foundation, 6/14/2012)

CBO: FOURTH STRAIGHT YEAR OF TRILLION DOLLAR DEFICITS: (Alan Fram, “CBO Projects $1.1 Trillion Deficit for 2012, Modest Recovery,” Associated Press, 8/22/2012)

$5.34 TRILLION INCREASE IN NATIONAL DEBT SINCE OBAMA TOOK OFFICE: (“The Daily History of the Debt Results,” Bureau of the Public Debt, Accessed 8/22/2012)

CBO: Dem Tax Hikes = Recession + 9% Unemployment http://ow.ly/d9til #stopthetaxhike