Tax Relief, Not IRS Grief
By Sen. John Thune
Government can’t create prosperity, but it can and should cultivate opportunity. Too often, government stifles opportunity and gets in the way of hardworking South Dakotans. Before Republican-led tax reform five years ago, the federal tax code was doing just that, leaving our economy stuck in neutral. Tax reform played a key role in reversing this sluggishness and fostering a healthy economic environment that promoted growth and opportunity for all. Fully preserving key elements of tax reform and stopping Democrats’ reckless big-government policies are essential to restoring this economic strength.
Tax reform delivered on Republicans’ promise of a pro-growth and pro-worker economy by modernizing the tax system with lower rates and simpler rules. Tax cuts meant South Dakotans, and all Americans in every income bracket, saw bigger paychecks. Businesses of all sizes, including farms and ranches, took advantage of lower rates and a simpler tax system by increasing investment in themselves and their employees. And by reducing our sky-high corporate tax rate, which until tax reform was the highest in the industrialized world, we made the United States a more competitive place to do business, bringing jobs and production back to America.
The effect of these reforms was that our economy was firing on all cylinders. Companies passed tax savings on to workers with increased paychecks and benefits. South Dakota utility companies lowered utility bills in our state. The national unemployment and poverty rates fell to record lows as the income gap narrowed, and lower- and middle-income Americans saw some of the greatest benefits. And the government has even collected record-high revenues while individual Americans are paying less in taxes.
Reversing key elements of tax reform, or allowing provisions to expire, as Democrats have suggested, would reduce opportunity and raise taxes on South Dakotans whose budgets are already strained by the historic inflation Democrats’ reckless spending helped create. To make matters worse, at the beginning of this year, a series of Democrat-led tax hikes went into effect. These new and unnecessary tax hikes will drive energy bills even higher and lead to lower wages and depressed job growth.
In addition to new tax burdens on Americans, the Biden administration will move forward this year with plans to supersize the IRS. Under the Democrats’ so-called Inflation Reduction Act, the IRS was given $80 billion – or almost six times its annual budget – to hire as many as 87,000 new agency employees. With more than half the funding going toward enforcement and just 4 percent going to improve the agency’s lackluster customer service, I’m concerned the only real changes will be increased audits on middle-income families and small businesses.
Stopping this unnecessary expansion of government is a top Republican priority. When the Senate considered the Inflation Reduction Act in August, Republicans offered amendments – which Democrats unanimously rejected – that would have blocked the IRS expansion and protected small businesses and middle-income taxpayers from increased audits. In addition, I have introduced multiple bills to help rein in the IRS and add much-needed accountability. And the new Republican majority in the House has already made repealing IRS expansion one of its first orders of business in the new Congress.
More government is most often the problem, not the solution. When it comes to getting our economy moving again, bigger government, increased regulations, and higher taxes are definitely not the solution. Republicans know that the strength of the American economy is the working families, small business owners, farmers, and ranchers who work hard every day for a chance at their American dream. Tax reform helped create an economic environment that set people up for a more secure future. We should build on these successes and strive to provide more opportunity for South Dakotans, not less.
###
MADISON–The start of a new year brings with it new chapters in our lives and a fresh outlook on the future. As your lawmakers convene in Pierre this January for the 98th Legislative Session, we enter the new session prepared to lead with new members, new leaders and new ideas to improve South Dakota. In 2023, legislators will come together to strengthen our economy, support our communities and improve the lives of our residents.