Taxmaggedon is coming. Unless President Obama and Congress act, Americans will be hit with what would be in total dollars the largest tax increase in history in little more than five months.
Income taxes will go up on every single taxpaying American. The Alternative Minimum Tax, designed decades ago to ensure that 154 wealthy Americans paid income taxes, would hit an additional 27 million Americans with a $92 billion tax hike. The death tax will come roaring back—hitting farmers, ranches and businesses.
The cost? A family of four earning $50,000 would see their tax bill go up by $2,200. A single mother with a $36,000 a year paycheck would see $1,100 more go to Uncle Sam. And a married senior citizen couple with $40,000 in income would see their taxes double—paying $1,700 in higher taxes.
And there's a clear difference in vision for how to address this fiscal crisis.
I and other Republicans have proposed stopping these tax increases for all Americans. As the top Republican on the Finance Committee, I've put forward a proposal to prevent the largest tax hike in history from taking place and to pave the way for comprehensive tax reform in 2013.
If Congress doesn't agree with President Obama's plan to raise taxes on one of the most productive segments of our economy by allowing the top two marginal tax rates to expire, Washington Democrats' default position appears to be to let everyone's income tax rates skyrocket.
The Senate Democrats' plan would hit just under 1 million small business owners who file their taxes not as C corporations but as individuals. These are the job creators trying to lead our economic recovery and the Democrats seek to raise their taxes substantially. That doesn't make any sense.
Taxmageddon is real, and the uncertainty caused by it is contributing to the lackluster economic recovery. That's not a Republican talking point; that's based on comments from job creators across the country.
It's based on people like Brent Gines from Sandy, Utah, who said that "Any increase in expenses or outlay always has a big decrease on our ability to do business."
It's based on data like those from a recent report by accountants at Ernst & Young, who find that President Obama's proposed tax hike would shrink the economy by 1.3% and shed 710,000 from the American workforce. It's based on information from the National Federation of Independent Business and the U.S. Chamber of Commerce.
Federal Reserve Chairman Ben Bernanke recently told the Senate Banking Committee that our country's economic recovery "could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken."
The Congressional Budget Office and International Monetary Fund have also both issued warnings.
The American people understand that raising taxes is not a solution. In 2010, the president said that allowing tax rates to increase "would have been a blow to our economy, just as we're climbing out of a devastating recession." He was right, and the same idea applies today.
The only solution is to provide job creators and working families the certainty they need by extending all the current tax rates for another year, as we did in 2010, and then work next year to fundamentally reform our broken, costly tax code.
The president and his allies need to listen to what Americans are saying. They need the certainty of an extension of current tax rates for another year, and they need Congress to move forward together to reform the tax code to spur economic growth and job creation.
What does fundamental tax reform look like?
It means lower marginal income tax rates that would lead to more hiring, greater capital formation, better returns on our investments and a stronger economy.
A simpler tax code means that many of the resources currently poured into complying with the tax laws could be put to other uses—investing in new businesses, paying for our children's education, and giving money to charitable causes, to name a few.
This is not a time for political games, divisiveness and vilifying business and industry. Businesses continue to sit on the sidelines because they don't know what Washington is about to throw at them. The uncertainty is holding them back, and it's stifling our economy.
The president and his liberal allies in the Senate need to stop holding America's economy hostage in order to get what they want—which is higher taxes that would hit small businesses and the workers they hire.
Let's extend current tax rates for a year to give job creators and working families some certainty, then roll up our sleeves and pass meaningful tax reform to ensure America remains the leader we know it to be.
This originally appeared as an op-ed on CNN.com. -Team Hatch