Talking Points for a Grownup Conversation with Your CongressmanBy Christian Klein
Article Date: 09-01-2012
Copyright(C) 2012 Associated Equipment Distributors. All Rights Reserved.
One of the best things about election time is the willingness of incumbents and challengers alike to listen.
Tax and budget issues are in the spotlight in this year's presidential and congressional elections. No wonder! With the national debt at $15.9 billion and going up $1 million every 40 seconds, the federal government is bleeding red ink. And the mindnumbing complexity of the tax code is made worse by provisions constantly expiring and a lack of consistency from year to year.
Solving the fiscal mess is AED's top legislative priority. In the near-term we're working to get expiring tax provisions extended for at least one more year. That would give our members some certainty and give Congress and the president breathing room to have an open and honest tax reform debate in the months ahead. In the longer term, we're working to restore tax certainty and fiscal solvency by putting a new, fair tax code in place that will encourage capital investment and longterm economic growth.
In the months leading up to the elections, candidates are particularly attuned to what voters are saying. This is your best opportunity to pin down your current and future representatives and get them to commit to doing the right thing during next year's budget debate. Here are some ideas to discuss:
Tax and budget reform must be the top priority for the next Congress and presidential administration. America is on track for a tax and fiscal train-wreck. Without congressional action, at the end of this year the 2001/'03/'10 tax cuts will expire, a $1.2 trillion across-theboard budget "sequester" will go into effect, there will be steep reduction in Medicare physician payments, the current alternative minimum tax patches will end, the payroll tax cut will expire, and the federal government will once again run up against its debt ceiling. The mess can't continue. Congress and the president must make tax and budget reform Job No. 1.
Tax uncertainty and federal fiscal problems are dragging down the economy. According to our most recent government affairs survey, 96 percent of AED members agree or strongly agree that "the uncertainty surrounding the tax code is undermining the nation's economic vitality." The same percentage agrees or strongly agrees that "the federal budget deficit and national debt pose a significant threat to the future health of the U.S. economy." A recent report by researchers at the Cleveland Federal Reserve Bank reached the same conclusion: "Policy uncertainty has a statistically significant negative effect on both small business hiring plans and small capital expenditure plans."
We're smarter than you think, so let's talk about real solutions. Watch out for politicians who try to sell you on easy solutions to tough problems. Given the scale of our debt and annual deficits, simply cutting nondefense discretionary spending or raising taxes on high-earners won't come anywhere close to solving the problem. According to our survey, 72 percent of AED members agree or strongly agree that "balancing the federal budget will require a combination of spending cuts, entitlement reform, and across-theboard tax increases" and that "everyone should shoulder some of the burden." Fewer than one-third (only 32 percent) agree or strongly agree that "tax increases should be off the table as a way to address the budget deficit." But 63 percent disagree or strongly disagree that "high earners should be taxed at higher rates to prevent tax increases on low- and middle-income families." In other words, most AED members understand solving the fiscal mess will be complicated and may involve tax increases; but if that's the case, the pain needs to be shared equally. If that's your perspective, push back when a candidate tries to dumb down the issue and pander with party talking points.
Highway user fees must be part of the broader tax and budget debate. Building infrastructure is a core function of government. Unfortunately, the revenues generated by the gas tax and highway user fees are insufficient to support even the current level of investment, let alone the additional road and bridge construction we need to reduce congestion and improve safety and efficiency. Because Congress has refused to consider increasing the gas tax, lawmakers have had to transfer tens of billions of dollars from the general fund to the Highway Trust Fund in recent years just to keep highway funding at current levels. In other words, putting the HTF back on solid financial footing will help improve the overall budget situation. Over the past 30 years, all major gas tax increases have happened as part of broader budget deals. That's what needs to happen again next year.
AED is still developing aspects of its 2013 tax reform agenda. If you'd like to be part of that process or have other comments, shoot me an e-mail.
Christian klein (email@example.com) AED's vice president of Government Affairs and Washington counsel. He can be reached at 703-739-9513.
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