SBE Council noted that such tax increases would hurt small business in four key ways.
SBE Council President & CEO Karen Kerrigan noted, "First, many successful entrepreneurs rank among these top income earners. Are we really better off reducing the resources these individuals have for business expansion, innovation and job creation? The answer to this question should be obvious to all, but the President keeps missing or ignoring this fundamental point."
Kerrigan continued, "Second, this proposal would effectively jack up taxes on capital by effectively raising levies on, for example, capital gains and dividends. Investing in start-ups and small businesses is a high-risk venture. It makes no sense to reduce the potential returns from these critical investments."
SBE Council chief economist Raymond J. Keating added two more points. Keating said, "Here's a fundamental question: Is the economy better off leaving these resources in the private sector, or handing them over to politicians and their appointees? Quite frankly, you have to be a blind political ideologue to think that the economy is going to benefit more by putting these resources in political hands. This economy is only going to get back on track when government stops creating uncertainty and imposing costs on entrepreneurs and investors. This proposal does exactly opposite of what we really need."
Keating added: "For good measure, when faced with trillions upon trillions of dollars in added federal spending and debt, it's preposterous to think that this tax increase would accomplish anything substantive. Especially after upper-income individuals adjust their behavior and decision-making, the eventual revenue take for the government would be far less than the expected. And in the end, revenue gains would only be feeding increased government spending. It seems like President Obama is more interested in scoring political points among his base rather than getting serious about growing the economy and reducing the size of government."