Sen. Ron Johnson: 'We Haven't Made the Case for Economic Growth'
(CNSNews.com) - Lost amid the demand for higher taxes is the simple fact that a growing economy automatically pumps more money into the U.S. Treasury.
Growing the economy would be "ten times more effective than just increasing tax rates," Sen. Ron Johnson (R-Wis.) said Tuesday on CNN.
He said it's no surprise that most Americans favor a tax hike on the wealthy, "because we haven't made the case for economic growth. The American people really doesn't understand that economic growth is 10 times more effective."
Johnson offered numbers to back up his argument:
"Even in this meager economic recovery we've had since 2009, revenues to the federal government increased by $344 billion per year. If we just returned to a normal economy, like we had in 2007, when we had the same tax rates we're...experiencing now, when federal revenue was 18.5 percent of our economy, that would add another $400 billion of revenue per year. So when you total that all up, it's about $750 billion of added revenue through economic growth.
"Now, the president's proposal -- let's just kind of round it up, because you hear different figures out there. Let's say about $75 billion per year (the estimated amount produced in the first year if Obama raises tax rates for the wealthy). That $75 million, Johnson said, is a tenth of the $750 billion you'd get with economic growth.
Johnson said the problem with "punishing success" by raising taxes on the wealthy job creators is that "you put at risk the economic growth that is ten times more effective."
Johnson offered another example of economic growth:
"Let's take a look at just the Bush tax cuts," he said. "In 2003, federal revenue was a little under $1.8 trillion when those Bush tax cuts were enacted. Four years later, in 2007, revenue had risen to $2.5 trillion. That's a 44 percent increase through economic growth. It actually works.
"And this president (Obama) just simply doesn't understand that. And so, as a result, he's going to punish success. We're going to put at risk the economic growth that we really need to create the jobs -- to create taxpayers, to create the revenue we need to lower our deficit."
As for raising tax rates on the wealthiest two percent of Americans -- Johnson said he understands that would raise "maybe $75 billion the first year, which is 7 percent of our $1,090,000,000,000 deficit. What's the solution for the other 93 percent?" he asked. "That's what Republicans are talking about."
Johnson noted that President Obama has proposed four budgets, but the last two were "so unserious," they got "zero votes" from his fellow Democrats. "Democrats haven't passed a budget in three years," Johnson said, nor have they proposed a solution to save Social Security or Medicare.
"If you want to actually have a deal, put something on the table the American people can actually evaluate. I am tired of these secret negotiations where the financial future of America is going to be determined by, what, one or two individuals and their staffs? This should be a very open process that is debated by elected officials, members of Congress, congresspersons and senators. That's how this process should work.
"But the Democrats in the Senate have refused to follow the regular order; actually put even one vote to a budget. That's where we have to start."