In 2001, Congress passed the largest tax relief package in a generation. As a result, American families and small businesses have been able to save, spend, and invest more of their hard-earned dollars to best meet their needs. Ten years later, the Obama Administration is set to raise death taxes, as well as capital gains, small business, and income taxes, and once again impose the marriage tax penalty. Consequently, on January 1, 2011, Americans will face the largest tax hike in our nation’s history.

I helped pass tax relief legislation a decade ago because I am convinced that the most effective way to stimulate the economy is to leave more money in taxpayers’ pockets. History supports my view. Presidents from both parties, including Presidents Kennedy, Reagan, and Bush, have successfully employed tax relief to create jobs and spur economic activity.

But if we allow this administration to raise taxes next year, 43 million families with children would be forced to pay $2,300 more in taxes each year; more than 18 million seniors will owe $2,200 more in taxes; and 27 million small businesses will owe $4,100 more in taxes.

One of the coming tax hikes will hit close to home for millions of Americans. The marriage penalty is one of the most egregious, anti-family provisions in the federal tax code. It pushes married couples into a higher tax bracket than two single wage earners taking in the same combined income. As a matter of principle, the IRS should never do anything to discourage one of the most fundamental institutions of our society: marriage.

The tax exemption for each estate was increased on an annual basis from $675,000 in 2001 to $3.5 million in 2009. In 2010, the death tax is zero. But at the end of this year, the death tax rate will climb back up to 55 percent, and the tax exemption for each estate will fall to $1 million. 

In recent years, I have cosponsored multiple pieces of legislation to permanently abolish the death tax. I support its repeal because it penalizes hard work and saving. If a family sacrifices to build a farm, ranch, small business, or other assets, the parents should be able to pass the fruits of their labor on to their children. A fundamental part of the American dream is to provide a better life to our children and grandchildren.

The marriage penalty and the death tax are just two examples of many tax hikes that could harm American families and businesses starting next year. And at this time of economic uncertainty, the last thing we should be doing is raising taxes. I am committed to fighting these increases and lightening Americans’ tax burden.

Unfortunately, the Obama Administration continues to push for higher taxes and greater deficits in order to finance unprecedented spending programs. Meanwhile, the public debt has reached $13 trillion, and the national unemployment rate continues to hover around 10 percent. Americans want to end this reckless spending, which is neither creating jobs nor stabilizing the economy.

Dr. Christina Romer, chair of President Obama’s Council of Economic Advisers, has admitted that lower taxes are critical to investment and economic recovery.  Indeed, if we couple lower taxes with spending restraint in Congress, we can truly foster the economic growth and job creation that our nation badly needs.

Kay Bailey Hutchison is the senior U.S. Senator from Texas and is the Ranking Member of the Senate Committee on Commerce, Science, and Transportation.

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