Yesterday, President Obama put forth “a campaign document” masquerading as a deficit plan that calls for a $1.5 trillion tax hike on American job creators. Small businesses warn that the “tax plan would kill jobs” at a time when our nation is struggling with 9.1 percent unemployment, yet President Obama has already gone so far as to issue a veto threat against legislation that does not include job-crushing tax hikes. Here’s a look at how President Obama’s tax hike plan will hurt America’s small business job creators:
- President Obama’s Tax Hike Would Affect 50 Percent of All Small Business Income. According to a report issued by the Joint Committee on Taxation, the President’s proposed tax hikes will affect “50 percent of the approximately $1 trillion” in small business income reported each year.
- 75 Percent of Small Business Owners File Taxes as Individuals. In a statement released yesterday, National Federation of Independent Business (NFIB) CEO Dan Danner noted that “at least 75 percent of small businesses file taxes on business income at the individual rate, and reinvest those earnings to grow the business and hire workers,” adding that, “with small businesses still struggling to recover and grow, this plan sends a bad message to job creators.”
- 750,000 Small Businesses Would Be Hit with President Obama’s Tax Hike. According to an Associated Press fact check, the majority of businesses that would be hit by the President’s tax hike are “small, even tiny businesses.” In fact, the Joint Committee on Taxation found that the tax hike would impact about 750,000 taxpayers who report business profits on individual income returns.
- President Obama’s Tax Hike Would Negatively Impact Small Businesses Employing 25 Percent of the U.S. Workforce. According to an NFIB survey released last year, “the businesses most likely to face a tax increase by raising the top two rates are businesses employing between 20 and 250 employees. According to U.S. Census data, businesses with between 20 and 299 workers employ more than 25 percent of the total workforce.”
- Small Businesses Account for 65 Percent of New Jobs Created in the U.S. According to the Small Business Administration, “small firms accounted for 65 percent (or 9.8 million) of the 15 million net new jobs created between 1993 and 2009.”
The President’s plan also raises taxes on private capital, the essential ingredient for job creation in America. Couple that with the impact the plan would have on small businesses, and it’s hard to think of a policy that could be more ill-suited to an economy that is struggling to create jobs.
In remarks at the White House yesterday, President Obama acknowledged that “the health of our economy depends in part on what we do right now to create the conditions where businesses can hire.” We couldn’t agree more. That is why the new House majority has passed more than a dozen bills to help eliminate the barriers that are making it harder for small businesses to put Americans back to work – including the threat of higher taxes coming down the pike. It is up to the President and the Democrats who run the Senate to act on these bills, rather than pursuing a politically-driven agenda that will only add to the economic uncertainty paralyzing job creators and siphon off private capital our economy needs to start growing again.