An increase in the tax rates on investments would also negatively impact many important sectors of the economy, including manufacturing, utilities, telecommunications firms, retailers, drug companies, and food producers that employ millions of Americans and are vital for economic growth, job creation and U.S. global competitiveness. According to a recent analysis by the American Consumer Institute Center for Citizen Research (ACI), an increase in tax rates on dividends and capital gains will reduce private investments by 6 percent, leading to the loss of nearly two million jobs. ACI didn’t even factor in the negative impact other tax increases and spending cuts included in the fiscal cliff would have on job creation, which according to the Congressional Budget Office, would drive the economy back into a recession next year and increase unemployment to 9 percent.
This is not the type of leadership the American people expect from Washington. The potential negative impact and unintended consequences of raising tax rates on investment income is a serious threat to the American economy and the American people and must be considered by lawmakers and policymakers before reaching a deal on the fiscal cliff. Millions of Americans’ jobs and economic prosperity depend on it. It’s time for members of both parties to come together to provide solutions to address our fiscal problems — but raising tax rates on investments is not one of them.
Kuhn is president of the Edison Electric Institute, the association of U.S. shareholder-owned electric companies.