Orrin Hatch

The following originally appeared as an op-ed in USA Today. -Team Hatch

On Jan. 1, Democrats will raise taxes -- the question is whose and for how long. By not extending critical tax relief enacted in 2001 and 2003, our nation would face the largest tax increase in history.

According to the Congressional Budget Office, our Gross Domestic Product (GDP) would take a 1.4% hit -- potentially enough to trigger another recession, the last thing out-of-work Americans need.

We need to stop these tax hikes and create a foundation for economic growth that, coupled with spending cuts, will reduce our massive budget deficits.

Dr. Christina Romer, chair of the president's Council of Economic Advisers, found that "tax increases are highly contractionary" and that there's "a powerful negative effect of tax increases on investment." Her analysis showed that $1 in tax cuts results in a $3 increase in GDP, demonstrating why lower taxes are key to investment and an economic recovery.

In contrast, many Democrats argue that Congress needs to spend more money we don't have to stimulate the economy. They didn't learn from the last stimulus that failed to stop unemployment from going over 8%. In fact, these massive tax hikes would be an anti-stimulus -- putting our economy at greater risk.

Washington doesn't have a revenue problem; it's got a spending problem. Federal spending is expected to reach 25.2% of GDP by 2020 -- up from the 20% average. Revenues, even with this tax relief extended, are projected to reach 20%, way up from the 18% norm.

Some say Congress should raise the top tax rates so the "rich" pay more. But if that happens, it'll be small businesses paying the price -- to the tune of a 17% hike in the top marginal rate.

According to a recent Gallup survey, small businesses employing up to 20 million Americans would be hit by these tax increases.

The Joint Committee on Taxation says half of the around $1 trillion in business income in 2011 will be reported on individual returns subject to the tax hikes on the top two tax rates. That doesn't make sense, especially when our economy is so weak.

Let's stop these tax hikes and instead create a climate for economic growth and job creation by keeping taxes low and cutting spending.