Memorandum on Income Tax

TO:          Reporters and Editors
FROM:   Antonia Ferrier for Senator Orrin Hatch, (202) 224-4515
RE:           Setting the Record Straight on Senator Hatch’s Comments on Income taxes and the Poor
DATE:     July 8, 2011

                The left-wing blogosphere is out asserting that Senator Hatch wants to raise taxes on the poor.  It’s hard to imagine any Senator more opposed to tax hikes than Senator Hatch.  But since the other side has twisted and contorted his comments, this provides us with another opportunity to explain what Senator Hatch’s concerns are.  Concerns not only felt by him, but by the millions of hard-working families across America. 

                In May, the Joint Committee on Taxation found that 51 percent of households do not pay income taxes – that’s the first time ever that a majority of households don’t pay these taxes.  Why is this important?  First, this clearly shows that fewer and fewer people are supporting the government.  This is not sustainable, especially when those people paying for the government are middle-class families who work hard every day to make ends meet. 

                Secondly, as Senator Hatch said when he released these numbers, this has a huge impact in terms of deficit reduction as well.  He said, “American taxpayers are skeptical that the answer to our fiscal problems is for them to sacrifice more, when almost half of all households are not paying any income taxes.  Those who promote higher income tax rates in the name of equality and deficit reduction need to come clean about what this means.  With the income tax base so narrow, meaningful reductions in our deficits would require far more than taxes on the rich.  Those tax increases would squarely hit the middle class, which the President and others have said is off limits. In short, the quest for social equality results in fewer resources and worse outcomes for the nation as a whole and the poor in particular.”

                Thirdly, and this is critical, when government grows and taxes are increased, there’s less money for the private sector and for job creation.  So the solution here is NOT more taxes on fewer and fewer Americans.  The solution is growth and getting people employed so they are paying into the tax system.  This is Econ 101 – the more growth, the more revenue, and the less debt – and the less growth, the less revenue, and more debt.  This sentiment was very clearly articulated by Senator Rubio on the Senate floor:  “We don’t need new taxes, we need new taxpayers, people who are gainfully employed, making money, paying into the tax system and then we need a government that has the discipline to take that additional revenue and use it to pay down the debt and never grow it again.”

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