Congress Should Support Plan B
Congress should support the so-called Plan B. Maintaining economic growth is an absolute prerequisite to addressing our deficit and debt problems. Going over the fiscal cliff and allowing the largest tax increase in our history would certainly severely hamper if not totally eliminate economic growth for the near term.
Thus, Plan B, which would extend the current tax rates for 99.81 percent of the American people – all but those making over $1 million, patch the alternative minimum tax (AMT), extend current estate tax levels, and creates parity for capital gains and dividends taxes, and replace the sequestration spending cuts with more thoughtful spending restraint, is a viable option.
However, the U.S. Chamber believes that the sole benefit of this legislation is that it averts going off the fiscal cliff. It does not address our excessive government spending, does not reform our unsustainable entitlement programs, and does not achieve fundamental comprehensive tax reform. Indeed, a case could be made that by eliminating the exigency brought on by the approaching cliff, that this bill makes it less likely that Congress and the Administration will address these important issues in the near future. We would be much more at ease with our support for this bill, if it contained assurances and a mechanism to achieve these important long run goals.
The Chamber believes that extending the current tax rates for all while building a pathway to a bigger deal with fundamental entitlement reform and fundamental comprehensive tax reform is clearly the best policy. Moreover, we are not comfortable allowing tax increases on anyone in this environment. However, we understand that, at times, politics requires compromise.