National tax relief and reform vital for economic growth

With nearly one in 10 Americans looking for a job, the last thing Congress should do is raise taxes on middle class families.

That’s one of the clear messages from last month’s election and that’s why I’m continuing to push to extend the vast majority of the tax cuts passed in 2001 and 2003, which are set to expire at the end of this year.

Americans know better than the federal government how to spend their money, and extending these tax cuts gives working Americans more money in their pockets to spend and help our economy recover.

But some of President Obama’s advisors and Republicans are wrong when it comes to giving more tax breaks to the richest of the rich, the top 2 percent of income earners.

Giving tax breaks to millionaires and billionaires adds another $700 billion to the national debt. This means borrowing more money from China to give to the richest Americans and handing our children the bill.

This scheme already has added more than $1.2 trillion to the national debt over the last decade. Instead of investing this extra income into the economy, those in the millionaire and billionaire club have been hording cash at a greater amount than in previous decades.

The recent recommendations from the President’s national debt commission should serve as a wake-up call to all of us that we need to get serious about tackling the crippling national debt. Adding to it by giving tax breaks to the richest is irresponsible.

Instead, we need real reform to continue our economic recovery. Here are three smart and fiscally responsible ideas:

Stimulate small business growth

As a long-time small business owner, I know first-hand how important capital is for growing businesses. Tweaking the income levels for middle class tax cuts will do this.

That’s why I’d support raising the proposed cap for tax relief from those earning $250,000 and below to $500,000 for individual earners to $1 million for couples. The result would be tax relief for 98 percent of taxpayers, and more money in the pockets of small business owners to hire more workers and grow their companies.

Encourage business innovation

Instead of extending tax breaks to the rich, let’s use a portion of that money to fuel business innovation. My colleague, Virginia Senator Mark Warner, has proposed several good ideas such as greater tax allowances for expensing of business investment, fine-tuning depreciation allowances and promoting hiring with a temporary reduction in payroll taxes for companies hiring new workers.

Instead of taking cash out of the economy, as tax cuts for the rich have done, let’s reinvest tax dollars back into the economy to encourage investment and jobs.

Adopt long-term tax reform

Extending middle class tax cuts for the short-term will create the economic stimulation we need now to get our economy moving again. But a more permanent stimulator is reforming and simplifying our burdensome tax code, which has 10,000 sections and costs Americans and businesses $200 billion a year just to complete the paperwork.

I have co-sponsored the bipartisan Tax Fairness and Simplification Act, which would simplify our tax structure. It would reduce the tax code to just three brackets so that most taxpayers will have to complete just a one-page form. It increases our international competitiveness by reducing the corporate tax rate from the second highest in the world to be on par with other global economies. And it’s especially good for small businesses, reducing their taxes an average of $5,000.

Our country needs tax reform to keep our economy growing, but we must do it smartly. Instead of a quick and easy political fix – giving the rich another tax cut – let’s adopt real reform by putting money into the pockets of working Americans and make our businesses more competitive.

U.S. Sen. Mark Begich is the new chairman of the U.S. Senate Democratic Steering and Outreach Committee.