Current Law Disrupts Investors, Businesses from Planning for the Future

“The status quo is sabotaging the economy,” says Schatz

(Washington, D.C.) – Citizens Against Government Waste (CAGW) today called on Congress to get on the pro-growth bandwagon by making the Bush tax cuts — initiated last year but scheduled for repeal in nine years — permanent.

“We have seen what lower taxes do,” CAGW President Tom Schatz said.  “When Americans received their tax credit last year, these funds were plowed back into the economy.  There is abundant data to show that lower marginal tax rates stimulate new business ventures and risk taking.  The nation is emerging from a recession and businesses are looking to hire more workers.  Our economy would be growing faster — thereby increasing government revenues — if all the tax cuts and new rates were in place and made permanent.”

As the various tax breaks go into effect, people will have more take-home pay to spend and invest.  Small businesses that pay on the personal income tax schedule will find their taxes going down too, helping them to be more successful.

“By the time the tax cut is fully phased in, 43 million married couples will see their taxes reduced by an average of $1,700 per year and those with children will receive an annual tax cut of more than $1,500,” Schatz continued.  “This money will help millions of Americans buy the goods and services they need, such as child care, a new car, or even a down payment on a home.  All of this will end in nine years if Congress does not make these tax cuts permanent.” 

“As the end of the tax cuts approach, financial advisors and accountants will advise their clients to shelter their money, businesses will stop hiring, and citizens will stop spending, knowing that just around the corner they will face higher taxes.  As a result, the economy will become stagnant,” Schatz also said.  “We have also seen what leaving money in Washington will do:  the 2002 Congressional Pig Book chronicled a record 8,341 pork barrel projects, costing taxpayers $20.1 billion.  Congress spent taxpayers’ money on frivolous projects like $50,000 for a tattoo removal program, $5.7 million for wood utilization research and $2 million to restore a statue of the Roman god Vulcan.” 

“If the politicians cut back government waste, fraud, abuse, and mismanagement and stuck to the basics, there would be plenty of money to make these tax cuts permanent and to initiate new, deeper tax cuts,” Schatz concluded.  “The status quo is sabotaging the economy.”

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.