Double dip? Not acceptable

The president of the U.S. Chamber of Commerce last week made strikingly vocal and dire predictions about the direction of the nation’s economy because of taxes and regulations being pursued by the Democratic leadership in Washington, D.C.

“Congress, the administration and states must recognize that our weak economy could not sustain all the new taxes, regulations and mandates now under consideration. It’s a sure-fire recipe for a double-dip recession, or worse,” Tom Donohue said.

Wow. A double-dip recession.

It is unusual for the Chamber to engage so stridently against a political party’s agenda, but that’s exactly what is happening. Donohue vowed that the Chamber would be more involved in the 2010 elections than it has been in any election cycle before because of the potential consequences.

Like the Chamber, we think the tax proposals being advanced or considered in Washington are obvious poison for the economy.

On the table are a tax on banks, a series of taxes and fees associated with health-care legislation, stock-market transaction taxes, energy taxes with cap-and-trade legislation and even a value-added tax that would be akin to a national sales tax. And that’s on top of the strong potential that Congress will allow income-tax cuts enacted under the Bush administration to expire at the end of the year.

Sure, it’s not likely that all of the above will come to pass, but Washington is sending bad signals to business owners and investors. Instead of giving them incentives to invest, expand and hire, the federal government is giving them a heaping dose of uncertainties about the cost of doing business in the future.

Many deficit-plagued state and city governments aren’t helping by pursuing their own varieties of tax and fee increases.

What’s worse about the Washington tax schemes, Donohue noted, is that they are intended to support increased government spending rather than reducing bloated deficits.

Obama administration officials can prattle on all they want about the number of jobs being supported by federal stimulus spending, but don’t buy it. The fact remains that the country has a 10 percent unemployment rate that is actually more in the range of 17 percent if underemployment and discouraged workers are taken into account.

If the administration wants real job creation, there needs to be a new direction on taxes and regulation, because the engines of the private sector are ultimately going to drive job growth.

A double-dip recession is something the country cannot afford.