United Liberty

It’s clear that President Barack Obama and Senate Democrats will continue to push tax hikes on hard-working Americans. But Senate Minority Leader Mitch McConnell is throwing coldwater on their plans.

President Obama managed to get higher taxes rates on Americans earning more than $400,000 per year, which hit many small businesses. But in an interview with FreeEnterprise.com, the official blog of the United States Chamber of Commerce, McConnell stated very pointedly that there will be no more votes on tax hikes in the Senate.

“[At] the end of [last] year, and unfortunately, a lot of small businesses already got a tax increase,” McConnell noted to FreeEnterprise.com. “S-Corps and LLCs were hit with a tax increase from 35% to 39.5%. That’s more than enough. They shouldn’t have gotten that in the first place, and we’re not going to be voting for anymore tax increases.”

McConnell also noted that the Obama Administration is trying to “create a nanny state” with ObamaCare. Noting the 7-foot tall, 20,000-page stack of regulations that have come with the healthcare law, McConnell said, “It’s no wonder we’re having a tepid growth-rate, the government itself is responsible for this slow recovery we’ve had after a big recession.

Last night, Rep. Tom McClintock (R-CA) appeared on CNN to discuss the debate in Congress on the “fiscal cliff” and taxes. McClintock, who was elected to the House in 2008, put President Obama’s tax hike proposal in a different context, explaining that it would hurt the middle class if taxes on higher-income earners, many of which file as S-Corps or sole proprietors.

If taxes on business owners is raised, fewer jobs will be available in an already struggling economy. McClintock explains that anywhere from 200,000 to 700,000 will be lost, depending on the estimate. This makes the debate, not about class warfare, as the White House wants, but rather, as McClintock says, a “battle for the middle class.” McClintock notes that raising taxes on the top-2%, it would have an “enormous impact…on small business job creators.”

The Free Enterprise Alliance has launched a national ad campaign encouraging Americans to call their representatives in Washington to start supporting small businesses.

The expiration of the Bush tax cuts is expected to have an impact on small business owners as the Americans for Tax Reform recently noted, 55% of S-Corp and partnerships and 34% of sole prorietors will see tax hikes in 2011.

Here is a great video of Sen Jim DeMint (R-SC) and Sen. Max Baucus (D-MT) debating the expiration of the Bush tax cuts. DeMint explains that if the tax cuts expire, the increases will hit the job creators, small business and individuals that file under S-Corps and sole proprietors. But rather than answer a legitimate concern, Baucus calls DeMint’s warning a “stunt” and a “gimmick.”

H/T: Club for Growth

In a column at the New York Post, Dan Mitchell explains that soaking the rich in taxes will hit hurt the middle class:

The Obama administration’s approach is to look at tax policy mainly through the prism of class warfare. This means that some of the 2001 and 2003 tax cuts can be extended, but only if there is no direct benefit to anybody making more than $200,000 or $250,000 per year.

That’s bad news for the so-called rich, but what about the rest of us? This is why the analysis about direct and indirect costs is so important. The folks at the White House presumably hope that we’ll be happy to have dodged a tax bullet because only upper-income taxpayers will face higher direct costs.

But it’s the rest of us who are most likely to suffer indirect costs when higher tax rates on work, saving, investment and entrepreneurship slow economic growth. When the economy slows, that’s bad news for the middle class — and it can create genuine hardship for the working class and poor. Indeed, punitive taxation of the “rich” is one reason why middle-class people in high-tax European welfare states have lost ground in recent decades compared to Americans.

The White House may be playing smart politics by engaging in class warfare, especially if President Obama succeeds in blaming the recession on tax cuts that took place five years before the downturn began. But for those who care about prosperity more than politics, what really matters is that the economy is soon going to be hit with higher tax rates on productive behavior.

As the debate over the extention of the Bush tax cuts heats up, with Obama Administration officials foolishly saying that their expiration will have no impact on a fragile economy, Dan Mitchell points out that the working class, lower and middle income earners, will be causualities of the War on the Rich:

Unfortunately, the Obama Administration’s approach is to look at tax policy only through the prism of class warfare. This means that some tax cuts can be extended, but only if there is no direct benefit to anybody making more than $200,000 or $250,000 per year. The folks at the White House apparently don’t understand, however, that higher direct costs on the “rich” will translate into higher indirect costs on the rest of us. Higher tax rates on work, saving, investment, and entrepreneurship will slow economic growth. And, because of compounding, even small changes in the long-run growth rate can have a significant impact on living standards within one or two decades. This is one of the reasons why high-tax European welfare states have lost ground in recent decades compared to the United States.