July 13,2022

Crapo: Raising Taxes and Killing Jobs No Cure for Inflation

Democrats’ tax hike proposals would hit small businesses and taxpayers earning less than $400,000

Washington, D.C.--Amid consumer price inflation surging to 9.1 percent in June and an economy facing rising odds of a recession and stagflation, U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee, led a news conference with Finance Committee Republicans to emphasize why this is the worst time to consider raising taxes on all Americans.  

To watch Crapo’s full remarks, click HERE.

To download the video, click HERE

On tax hikes worsening inflation:  

“Today’s new data shows the Consumer Price Index remaining at painful 40-year highs, jumping to 9.1 percent for June from 8.6 percent in May. . . . Nonetheless, in the face of a recession, Democrats want to raise taxes, including on the middle class and taxpayers earning far less than $400,000. 

“Tax increases would make inflation worse by further suppressing the supply side of the economy, including by depressing investment and productivity growth as well as labor supply when labor force participation remains below pre-pandemic levels.   

On small business tax hikes:  

“One of the tax increases being considered in the resurrected Build Back Better Bill is an expanded Net Investment Income Tax—or NIIT—on so-called ‘flow-through businesses,’ which are businesses whose owners’ incomes flow through to their personal tax forms.  Small business groups estimate up to one million small and family-owned businesses would be at risk of having their rates increased under this policy, which will negatively impact their growth prospects and their employees.   

“An expanded NIIT will drive down small business investment; drive down employment and reduce small business hiring; lower wages in small business jobs; and increase prices, which are passed on to consumers. “Small businesses are struggling in the Biden economy.  It is not the time to levy a $252 billion new tax, especially on small- and medium-sized businesses recovering from the COVID-19 pandemic, massive inflation and worker shortages.  

On tax hikes hitting taxpayers in every income category:  

“A new analysis from the Joint Committee on Taxation confirms that Democrats’ new reported proposals will increase taxes on all Americans, with millions of Americans making less than $400,000 seeing a tax hike and the average tax rate rising for every single income category. 

“As the economy faces runaway inflation, a first-quarter decline in GDP, and increasing and uncomfortable odds of a recession and stagflation, raising taxes and killing jobs as we face prospects of recession makes no sense.