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Reduce spending; don’t raise taxes

To resolve the current $14.3 trillion debt ceiling the White House is proposing to raise the debt ceiling and also raise taxes while others advocate living within our means and reducing government spending.

As June came to a close there was a historic lesson to be learned about taxes. Higher taxes, once in place, are unlikely to go away.

House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, has just taught us that lesson about taxes. He refused to extend the Federal Unemployment Tax Act surtax of 0.2 percent. Since 1976 employers have been paying a FUTA tax of 6.2 percent rather than the historical rate of 6.0 percent. The “temporary” 0.2 percent surtax was to repay the federal general revenues used to provide unemployment benefits from the 1973-1975 recessions. The surtax raised $27 billion by 1987 fully repaying the general revenue.

Did the tax go away then? No, with the support of Charlie Rangel, a New York Democrat, the prior House Ways and Means Committee Chairman, the tax continued through eight extensions with the most recent extension in 2009 as part of the Worker, Homeowner and Business Assistance Act.

Yes, as we were going through the depths of the Great Recession, Congress saw fit to have employers pay higher taxes rather than giving them some relief to help businesses survive. The surtax, while not significant, cost employers about $14 per employee beefing up government revenues $1.4 billion per year.

As the White House and Congress strive to resolve our debt ceiling dilemma, we need to encourage our elected officials in Washington to take a lesson from the Congressman from Michigan. We need to live within our means by reducing government spending rather than raising taxes or we and our children may be paying for the choices they make for another 35 or more years.

Mike Tennis

Sleepy Hollow