When President Obama was sworn into office more than two years ago, he took out an unlimited credit card in the name of the American taxpayer and immediately proceeded to charge a trillion-dollar stimulus that failed to hold unemployment below 8 percent, as the White House promised.

In February, President Obama proposed a budget with $8.7 trillion in new spending, despite the fact our nation is already more than $14 trillion in debt and increasing daily. Instead of fulfilling a promise made while vying for the White House to cut the U.S. deficit in half in his first term, he presented a budget that kept the U.S. on the same, unsustainable fiscal road.

Last week, House Republicans introduced a real budget proposal that reduces deficits by more than $4 trillion over the next decade. It introduces real reforms to get our fiscal house in order and actually pay off the debt before our children and grandchildren are stuck with our spending bill.

But yesterday, President Obama offered empty, political rhetoric to the American people. Suddenly he’s feigning outrage against the current debt levels and the out-of-control spending. He thinks taxing those making over $250,000 will solve our budget woes and create jobs. It won’t. The President is just singing the second verse of his same old song.

If President Obama was serious about saving the taxpayer money, he would have started asking for cuts two years ago.

Uncertainty is in the air this holiday season, as lawmakers are yet to pass legislation preventing Obama’s tax hikes from affecting all taxpayers on January 1, 2011. Even though Congress likely will vote on a tax bill in the next 16 days, more uncertainty is just around the corner.
 
As a former federal tax attorney, I know our nation’s current tax system is onerous and confusing. The new majority must take a cold hard look at our way of doing business. According to an article in today’s Wall Street Journal, we find ourselves in a perpetual state of temporary tax codes:

“In the late 1990s, there were typically fewer than a dozen tax provisions that had just a limited lease on life and needed to be renewed every year or so.

“Today there are 141.

“Now Congress, taking up a deal worked out between the Obama administration and Republican leaders, is poised to turn the whole personal income-tax system into something of a temporary structure. The plan embraces a broad range of provisions—an extension of Bush-era rates, a new estate-tax formula—but for only two years. A payroll-tax cut in the bill is for a single year.

“This means that if the compromise passes largely intact, the U.S. will have no permanent regime governing levies on salaries, capital gains and dividends, the Social Security tax, as well as a slew of targeted breaks for families, students and other groups. This on top of dozens of corporate-tax provisions that already were subject to annual renewal.

“The level of uncertainty, unusual for developed nations, complicates planning and discourages hiring and investment, many economists and corporate executives say.”

Our founding fathers never intended a larger-than-life government manipulating our very economy via the tax code. We can start to reverse this course by focusing on pro-growth measures that will provide needed certainty to businesses and families. The 112thCongress should consider cutting the corporate tax rate to make it more attractive for businesses seeking to operate in the industrialized world. I would also like to see the zeroing out of capital gains taxes. Then, let’s reduce all marginal personal income tax rates for individuals and start debate on ending the death tax. Better yet, given our nation’s dire economic situation, let’s begin a serious discussion about whether or not to scrap the current tax code and replace it with a fairer, flatter tax code. I think Americans would appreciate slashing the tax code to a fraction of its current length of more than 50,000 pages.
 
The American people have given Republicans a second chance. In the 112th Congress, it is my desire to see Congress bring greater simplicity to our tax policy. As a small business owner myself I know a  pro-growth economy is possible and one place to start is through tax code certainty for small businesses, corporations and families.

Finally the Democrat’s train of big spending and big government has been stopped in its tracks. Starting in January the majority can focus on reducing the debt, repealing Obamacare, and restoring limited government. But in the meantime, a dangerous agenda could be presented by the Democrats in the lame duck session of Congress and Americans must keep a vigilant eye.

Democrats scurried out of Washington in September before addressing the tax cuts scheduled to expire at the end of the year. This has put businesses and families in a difficult position. They don’t know what the financial playing field will look like in 2011 and how much will be owed to Uncle Sam. During the lame duck session the issue will be brought to the House floor. When it is, the existing Republicans must do everything within our power to extend the current tax rates for all Americans.

The Tea Party played an influential role in yesterday’s results but now they must stay visible. Please continue to put the pressure on your representative during the lame duck. Then, at the start of the new Congress in January, remember to hold us accountable to the limited government designed for our great nation by the founding fathers.

Earlier this week I told you about  the growing list of banks that are choosing to opt out of the TARP program and give the money back. Today, TCF Chief Executive Bill Cooper appeared on Fox News to explain his reasons for doing so.

I've got a great article that I came across over the weekend. CNBC did a thorough analysis of where the wealthy folks live whom President Obama is targeting for tax hikes as prescribed by his budget for fiscal year 2010. The President's budget raises tax rates on those couples making over $250,000 a year and individuals making $200,000 a year. The article reports that it will impact about 3% of all U.S. Households.

Among those states that will be most affected by the President's tax hikes is Minnesota:

15. Minnesota

% of Households Earning $200K : 3.8%
Total Households: 2,062,681
Households Earning $200K : 77,772
Median Income: $57,932

Election Results:
Obama: 54%
McCain: 44%

This might come as a surprise to you, but the United States is near the top of the list of industrialized countries with the highest corporate tax rates.

You may be asking yourself "so what," or "who cares," but it's important to recognize that lower corporate tax rates result in attracting more investment capital. A reduction of the federal corporate tax rate would increase firms' productivity and investment incentives, and ultimately stimulate our nation's long-term competitiveness by enhancing economic freedom.  The end result would be a boon to your family budget.

The trend for countries around the world is to slash corporate tax rates to spur economic growth, yet Washington has yet to come to grips with this financial reality. 

Currently, America's combined corporate tax rate sits at 40%, and it has been there since 1994. Last year alone, 23 counties slashed their corporate rates, including Canada, China, Columbia, the Czech Republic, Denmark, Germany, Hong Kong, Israel, Italy, Malaysia, New Zealand, Singapore, South Africa, Spain, Switzerland, and the United Kingdom.

According to a new study release by the accounting firm KPMG:
 
“U.S. corporate income tax rate is higher than all other global regions—14 percentage points higher than the global average and nearly 17 percentage points higher than the average among European Union nations. Of the 106 countries surveyed, only the United Arab Emirates, Kuwait, and Japan impose a higher corporate tax rate than the combined rate of 40 percent. The United Arab Emirates and Kuwait each have a staggering tax rate of 55 percent; Japan’s rate is 40.69 percent.”

The Heritage foundation reports that:

"Even Europe's old welfare states have joined the aggressive tax cut parade: Sweden has cut its corporate tax rate to 28 percent from 60 percent; Norway's rate has dropped over 50 percent to 28 percent; and Denmark's corporate tax rate is now 25 percent."

In fact, Sweden is considering reducing it further to 26.3 % from the 28% it is at now.

If our competitors around the world are making their country a friendlier place to do business while America’s corporate rates remain high, it doesn't take an economist to realize that our global competitiveness will be left in the dust.

For more information about the study, check out the non-partisan Tax Foundation's most recent newsletter (Pg. 5).

If we want to create jobs and stimulate the economy, one of the best ways we can do that is by cutting the corporate tax rate, not by spending hundreds of billions to stimulate government and creating more and more debt for our children.

Democrat leadership in Congress and President-Elect Barack Obama have made it perfectly clear that they are dead set on renewing the Death Tax rather than letting it expire in 2010.

An editorial in today's Wall Street Journal does a nice job detailing the ins-and-outs of the death tax and it's impact on the struggling middle-class businesses that Obama and the Democrats say they want to protect.

Democrats want to make the current death tax rate of 45% permanent, and while the Democrats like to portray the tax as targeted to those super-wealthy folks like Bill Gates and Warren Buffett, that is simply not the case. According the WSJ piece:

"The death tax strikes most heavily at small- and medium-sized family-owned businesses that generate the majority of new American jobs. So hitting these family businesses with a multimillion dollar tax bill when the owner dies won't help job creation."

I am an original cosponsor of H.R. 205, the Death Tax Repeal Act, just reintroduced in the House. Don't let the them fool you with their messaging -- this tax isn't about the wealthy. It impacts family farms and businesses -- the lifeline of Main Street that is vital to a healthy economy. With the economy in such a fragile state, renewing this tax will continue to hamper the economic prospects of our nation. Let's let the death tax die, once and for all.

The non-partisan Tax Foundation released their 2009 State Business Tax Climate Index earlier this week, and Minnesota was in the spotlight. Minnesota made the list of the ten WORST states for businesses, coming in at 41 - not exactly the place we want to be in today's already sluggish economy.

The foundation notes, "The modern market is characterized by mobile capital and labor. Therefore, companies will locate where they have the greatest competitive advantage. States with the best tax systems will be the most competitive in attracting new businesses and most effective at generating economic and employment growth."

The Index has been published yearly since 2003. It ranks states based on the taxes that matter most to businesses and business investment: corporate tax, individual income tax, sales tax, unemployment tax and property tax.  The states are scored on these taxes, and the scores are weighted based on the relative importance or impact of the tax to a business.

For more background on their findings, click here.

To read the full report, click here.

Today, the House passed H.R. 6275, the Alternative Minimum Tax Relief Act, sponsored by Rep. Charles Rangel (D-NY). This atrocious bill would impose $61.6 billion in permanent tax increases on businesses and individuals over eleven years in order to temporarily prevent for just one year a huge, unintended tax increase.  This bill would place a one-year “patch” on the exemption level for the Alternative Minimum Tax (AMT), without which more than 25 million taxpayers would be subject to a large tax increase beginning in tax-year 2008. 

Congressman Charles Rangel (the bill’s architect) and I had a nice little debate about it on CNBC’s Squawk Box this morning.



What makes this bill worse is that it would single out oil and gas companies from a broad domestic manufacturing tax deduction available to nearly all manufacturing in the United States. This is an irresponsible measure. Not only would it create disincentives for domestic energy production and investment, but it would make foreign energy investment and reliance more attractive. At a time when gas prices are soaring , increasing taxes on energy companies will make it even less likely that energy prices can come down.

We should completely repeal this antiquated tax policy without tax increases and give American taxpayers the full relief they deserve. This bill is a permanent tax increase to give a one-year tax cut. That’s a really a bad deal for the American people.

For more info on this legislation, check out my article published today by National Review Online: Be Pro-Choice: The AMT really has a hold on the middle class.