This is the second in series of columns from Americans For Prosperity contributors focusing on the federal budget proposals in Congress. The first post will focus Chairman Ryan’s plan, the second post will focus on the Senate Democrats’ plan, and subsequent posts will focus important differences between the two plans.
On Wednesday, Senator Patty Murray released the first Senate Democratic budget in four years. Digging through the pages it’s obvious why the Senate has shirked its duty the past several years; Senate Democrats didn’t want to tell Americans just how much their plan for America costs and how much they want to raise taxes. But now that they’ve spilled the beans on tax hikes, the Democrats are trying to use doublespeak to cover their tracks.
In the beginning of Senator Murray’s budget she writes “since President Obama took office, Democrats in Congress have worked with the administration to pass 18 direct tax breaks for small business. These include 100 percent expensing of new investments.”
This is actually one of the few policy areas that Americans for Prosperity agrees with Democrats and President Obama on tax policy; businesses should be allowed to expense 100% of their investments upfront. (Many Republicans support this idea as well.) This is the proper tax treatment for capital purchases. If we are going to tax firms on their income, removing expenses from the calculation is a crucial first step.
However, just 30 pages later in Murray’s budget, she writes “We simply can’t afford to continue the practice of giving billions of dollars in wasteful tax incentives to companies reporting record-breaking profits. Other unfair tax breaks-such as the special depreciation rules enjoyed by corporate jet owners….” But what Murray ignored is that the “corporate jet loophole” is the 100% expensing provision she praised. Corporate jets, or any jets for that matter, are a “new investment” and should be fully deducted at time of purchase.
Murray and Democrats want it both ways. They want to preach the benefits of tax breaks for small business, but then rail against the same tax breaks for large corporations. Who decides what is a “small business” and a “large corporation?” The purpose of the tax code is to raise the necessary revenue for essential government services; not to punish individuals or firms for their size or success.
Similarly, Senator Murray’s is claiming that her budget has $975 billion in tax hikes—which is a huge tax increase. But the text of her budget actually spells out $1.5 trillion in tax hikes. In addition to the $975 billion, Murray includes $480 billion in tax offsets to undo sequestration and another $100 billion in tax hikes to pay for more flawed stimulus spending.
Once budget analysts and groups like Americans for Prosperity pointed out Murray’s sleight-of-hand yesterday, she responded by saying that the $480 billion and the $100 billion were part of the $975 billion in tax hikes she envisioned. While that could be a possible interpretation of her proposal, she is then misleading about the amount of deficit reduction that is in her plan. The deficit numbers only work if you assume the tax hikes are separate increases. Murray can’t have it both ways.
Democrats in the Senate have ignored their legal obligation to file and pass a budget for the past four years because their vision of America is too expensive for Americans to stomach. But now that it’s out in the open, Senator Murray and Democrats are trying to cover up the contents and mislead the American public in the process.