White House Urges Dems to Fight for Small Business Tax Hike, Adding to Uncertainty Holding Back Job Growth
Wages are dropping, consumer confidence is slipping and the private sector isn’t creating enough jobs to bring down the sky-high unemployment rate. While families and small businesses are struggling, the Associated Press says “the White House is urging congressional Democrats to engage Republicans in a fight” to impose a massive tax hike on January 1. The White House’s directive is bad news for the 20 million plus unemployed and underemployed Americans who are facing an economy marked by weak growth and tepid job creation due, in large part, to the uncertainty caused by the massive, looming small business tax hike. Here’s more:
- “Jason Speer is nervously watching Congress and possible tax changes as Bush-era income tax cuts near expiration at year’s end. He’s a vice president of Quality Float Works of Schaumberg, Ill., which makes devices to monitor fluid levels in tanks. … Speer says he’d feel a lot better about hiring later this year if it weren’t for the uncertainty about federal taxes. Unable to anticipate his costs, Speer says he can’t make decisions about growth and hiring. ‘We don't know if there’s something around the corner that’s going to hurt our business,’ Speer says.” (Associated Press, 6/4/12)
- “Businesses across the board are more conservative about their outlook and are hoping to get more clarity from Washington about tax policies and regulatory issues before pursuing much growth, he [Ernesto Ancira, president of Ancira Enterprises ] said. ‘For the economy to rebound, we’ve got to have a full, clear-cut fiscal policy from Washington, so we know where to go,’ Ancira said.” (San Antonio Express-News, 6/26/12)
- “The effects of uncertainty can be seen in hiring plans, in particular, as evidenced by last Friday’s dismal employment report, which showed just 69,000 jobs added in May. … The combination of those factors, on top off the lessons learned during the downturn, are creating what [Joanie] Ruge [chief employment analyst for staffing company Randstad] also calls a wait-and-see approach, particularly among small and medium-sized businesses. ‘You have a lot of small to medium-sized business owners that are looking at investing and growing their company,’ she says, ‘but they’re still in a little bit of a wait-and-see mode because they’re not sure what the implications are going to be, from a tax standpoint.’” (The Fiscal Times, 6/6/12)
- “Small businesses have lowered their hiring expectations as their confidence in the economy has fallen into another mid-year slump, a new survey showed on Monday. … Views on the economy among small firms were more volatile than its underlying performance, Vistage said in a statement, reflecting uncertainty about growth and ‘the potential direction of economic and healthcare policies’. … Firms also expressed ‘rising uncertainty about what federal tax and spending reforms will be passed to avoid a nosedive off the 2013 fiscal cliff’, said Richard Curtin, an economist at the University of Michigan, in the statement.” (Reuters, 7/2/12)
This month, the House will vote to stop the small business tax hike, which will impact more than half of business income reported on individual returns. The bipartisan plan to stop the tax hike – backed by several Democrats - is part of Republicans’ relentless focus on removing barriers to private-sector growth and job creation, and will add to the more than 30 bipartisan jobs bills that have been passed by the House, but have yet to receive a vote in the Democratic-controlled Senate. Given the dismal economic outlook, President Obama should call on his fellow Democrats to quit stalling and pass these bills to help put Americans back to work. And, he should start working with Republicans to stop the small business tax hike and give job creators the certainty they need to help get the economy moving again.