Small business advocates like the Small Business & Entrepreneurship Council (SBE Council) continue to say that the proposed tax hikes moving through Congress will largely impact small business owners and entrepreneurs. We have argued that taxing small business owners in a down economy is a foolish policy move as the nation is even more dependent upon our sector for job creation, innovation and getting the economy back on a solid growth track.
A memo from U.S. Senator Chuck Grassley (R-Iowa), Ranking Member, Senate Finance Committee, and Rep. Dave Camp (R-Calif.), Ranking Member, House Ways and Means Committee, reports on a new study that finds more than half of the proposed $338.8 billion tax hike on “wealthy earners” will fall on small business owners.
Here is their analysis of the Joint Committee on Taxation report:
“According to the non-partisan Joint Committee on Taxation, in 2011, the President would tax $88 billion of net positive business income at the 36 percent rate and $349billion at the 39.6 percent rate. This tax increase would raise $18.694 billion in 2011. Multiplying this over ten years suggests the proposed higher marginal rates are likely to cost small business owners somewhere in the neighborhood of $187 billion over the ten-year budget window. That equates to roughly 55 percent of the revenue raised under the President’s proposed higher marginal tax rates coming from tax increases on net positive small business income ($187 billion out of $338.76 billion). Moreover, the Joint Committee on Taxation found that approximately half of the income (47%) targeted by the President’s marginal tax rate increase proposals in 2011 would be earned by small business owners.”
Obama Administration officials, and specifically U.S. Treasury Secretary Timothy Geithner, have said that only 2 percent of small business owners would get hit by their proposed tax hike. (This proposal, moving through Congress, allows the 33 percent and 35 percent brackets to rise to 36 percent and 39.6 percent in 2011.)
As an aside, it is estimated that the percentage of small business owners getting hit by the proposed tax hike would increase once you include taxpayers earning more than $200,000.
As SBE Council continues to say, raising taxes now on any individual or business
remains an unwise and counterproductive policy measure.
Karen Kerrigan, President & CEO
Showing posts with label tax hikes on small biz. Show all posts
Showing posts with label tax hikes on small biz. Show all posts
Friday, April 24, 2009
Wednesday, October 29, 2008
Raising Taxes is Not Smart Economics: The economy needs as much capital as it can get
The last thing our economy needs right now is for the government to be taking more capital from the private sector and out of our economy. Really, raising taxes is not a smart move – on anyone, or any business. There is no justification for siphoning more money out of our troubled, capital-deprived economy – period!
Politicians who supported the behemoth bailout package – including the two presidential candidates – rationalized that the taxpayer bailout would quickly infuse much needed capital and credit into the economy – into the hands of “Main Street.” Things were stuck, the economic engine was clogged. Taxpayers to the rescue!
That being the case, how can any politician reconcile their support for a bill that gives (ok – “lends”) billions upon billions of tax dollars (money – capital) to these larger firms in the name of shoring up troubled assets and credit markets, at the same time defend (and aggressively so) raising taxes on entrepreneurs or more “successful” individuals? The position is untenable.
Capital, credit and cash flow is extremely tight right now. Wouldn’t you want business owners, investors and entrepreneurs who may have some discretionary profits at their disposal putting these dollars back to work -- in their firms, their workforce, their communities and perhaps other business ideas?
And even if “the rich” lavish themselves with a vacation, new clothes, another big-screen tv, a home renovation project and a couple of nights out at their favorite restaurant – isn't it better that these dollars are spent more directly by consumers – as opposed to being re-circulated by government (or wasted as the case may be)?
We can endlessly debate what percentage of the population earns more than $250,000 or $200,000 -- or now (thanks to Joe Biden), $150,000. We can debate the merits of raising the capital gains taxes and who is impacted by these tax hikes.
The fact remains that Barack Obama says he will raise taxes, and I believe him! Many small businesses and entrepreneurs – the high growth, high performance, innovative, job-creating firms that we actually need to be rewarding with more tax relief, not punishing -- will surely get hurt. But do you really think that a Congress that is already on record supporting a deeper, more massive tax hike will stop at an Obama-established threshold?
Look, the starting point for candidate Obama is his tax plan – it raises taxes. Mark my words, after spending a couple of decades in this town, my bet is that the end point for hiking taxes will go deeper, much deeper.
Karen Kerrigan
President & CEO
Politicians who supported the behemoth bailout package – including the two presidential candidates – rationalized that the taxpayer bailout would quickly infuse much needed capital and credit into the economy – into the hands of “Main Street.” Things were stuck, the economic engine was clogged. Taxpayers to the rescue!
That being the case, how can any politician reconcile their support for a bill that gives (ok – “lends”) billions upon billions of tax dollars (money – capital) to these larger firms in the name of shoring up troubled assets and credit markets, at the same time defend (and aggressively so) raising taxes on entrepreneurs or more “successful” individuals? The position is untenable.
Capital, credit and cash flow is extremely tight right now. Wouldn’t you want business owners, investors and entrepreneurs who may have some discretionary profits at their disposal putting these dollars back to work -- in their firms, their workforce, their communities and perhaps other business ideas?
And even if “the rich” lavish themselves with a vacation, new clothes, another big-screen tv, a home renovation project and a couple of nights out at their favorite restaurant – isn't it better that these dollars are spent more directly by consumers – as opposed to being re-circulated by government (or wasted as the case may be)?
We can endlessly debate what percentage of the population earns more than $250,000 or $200,000 -- or now (thanks to Joe Biden), $150,000. We can debate the merits of raising the capital gains taxes and who is impacted by these tax hikes.
The fact remains that Barack Obama says he will raise taxes, and I believe him! Many small businesses and entrepreneurs – the high growth, high performance, innovative, job-creating firms that we actually need to be rewarding with more tax relief, not punishing -- will surely get hurt. But do you really think that a Congress that is already on record supporting a deeper, more massive tax hike will stop at an Obama-established threshold?
Look, the starting point for candidate Obama is his tax plan – it raises taxes. Mark my words, after spending a couple of decades in this town, my bet is that the end point for hiking taxes will go deeper, much deeper.
Karen Kerrigan
President & CEO
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