President Barack Obama says he wants to help entrepreneurs grow their firms and create jobs. But where's the proof? According to the Small Business & Entrepreneurship Council (SBE Council), his relentless pursuit of tax increases is wearing down the national psyche of small business owners. The President's specific proposals take direct aim at the entrepreneur's access to capital or their own resources to grow, invest, hire or pay down debt. Weak business revenues compounded by a tough environment for accessing capital are squeezing small firms. The last thing they need, or want to hear, is that Washington will be taking more of their reinvestment capital, or making it less attractive for investors to finance U.S. companies.
"President Obama's tax proposals are not only misguided, they are momentum killers. You can't expect small business owners to take extraordinary risks and move forward with expansion plans while Washington continuously threatens to take more of the money they earn. These resources are typically plowed back into their businesses. Whether it's a tax increase on personal income, capital gains, carried interest and now limiting the tax deductions that upper-middle class and high-earning entrepreneurs can take, these tax policy threats are suffocating confidence. The awful economy is proof of that," said SBE Council President & CEO Karen Kerrigan.
The White House has touted its federal government loan programs, and targeted and temporary tax relief to help small businesses, but these initiatives are not nearly enough to help entrepreneurs prosper in the challenging economic environment. The President's weak initiatives aimed toward helping small businesses are unfortunately matched with punishing tax increases on firms that are in the best position to add jobs and invest if they only had Washington's support. On top of raising taxes on upper-middle income and high-earning small business owners, President Obama has also proposed capping itemized deductions at the 28 percent personal income tax rate, which is yet another tax increase on many small business owners.
Raymond J. Keating, SBE Council chief economist, observed: "Understanding that most businesses pay the personal income tax, that the bulk of 'upper-income' earners are entrepreneurs, and that much of these higher incomes are earned by small businesses, President Obama's proposal to limit tax deductions amounts to a big tax increase on the entrepreneurial sector of our economy. Quite simply, this would mean fewer resources available for entrepreneurs to invest in building their businesses, innovating and creating jobs. No amount of political rhetoric or spinning the numbers can change this fundamental economic reality."
SBE Council is calling on President Obama to stop the politicking and class warfare, and start leading. Workers, small business owners, families and the unemployed are hurting. The country and economy is in a distressed state, and many people have no hope.
"The President has been provided numerous opportunities to fashion bipartisan consensus around tax reform, spending issues, trade agreements and other issues to help stabilize and grow the economy. Yet, he continues to revert to small political discourse and class warfare. Unfortunately, the country is suffering because of his unwillingness or inability to provide leadership," said Kerrigan.