| Weekly Update from Sam |
Dear Friends,
Small business owners are deeply concerned about the President’s insistence on raising taxes on them, especially since it does very little to solve the nation’s fiscal problems. Over the past week, more than 300 small business owners responded to our “Small Biz Open Mic” and overwhelmingly expressed strong opposition to the President’s plan to raise taxes on income over $250,000, which hits almost a million “pass though” businesses. These small business responses illustrate the wide gap between the President’s proposal and economic reality. His tax increases at best offer a small down payment on the massive yearly deficit – at the expense of new jobs and growth. Small businesses already have a bleak hiring outlook.
The President’s one-sided proposal focuses almost entirely on taxes while largely ignoring the need for significant spending reductions to move toward a balanced budget. Yet his plan to tax job creators only raises enough money to reduce the deficit by 8% over the next ten years. That isn’t a solution. Washington must begin serious reform of its overspending problem, or this year’s fiscal cliff is just a harbinger of a worsening and recurring fiscal crisis.
Sam Graves
Chairman
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Small Biz Tools
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| During a tough economic climate, small businesses face many challenges, including the 2010 health care law and its many mandates, regulatory hurdles and burdensome requirements. The House Small Business Committee has produced a resource to help navigate the law’s new rules for small businesses. |
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Fiscal Facts
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| The National Association of Manufacturers released a report this week titled Fiscal Shock: America’s Economic Crisis. A key finding is that the uncertainty is already harming the economy. The $500 billion direct hit of going over the fiscal cliff will likely lead to a recession in 2013 and more job losses, according to the study, and the economic impact could linger for a decade.
Also this week, the Associated General Contractors of America released a report titled Sequestration and Its Possible Impacts on Construction. Their report focuses on the across-the-board reductions from the Budget Control Act that will cut deeply into Defense and other programs unless averted before taking effect in 2013. They estimate that 170,000 construction jobs could be at risk next year, along with the loss of $20 billion in economic activity from reduced construction projects alone.
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Notable Op-Ed
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Reuters: The Regulatory Cliff Awaits
By Chairman Sam Graves
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| In Their Own Words |
Small business owners all over America are giving us their insight through our interactive online forum, Small Biz Open Mic. Here's what they're saying about the President's call for tax increases on small businesses:
“I had hoped to increase the size of my company starting in 2013 but if … those earning over $250,000 annually pay increased taxes, I will opt not to do it. There is no point in killing myself to grow my company only to give it to Obama for increased federal spending.” – Efrain Gonzalez (Denver, CO) Veritec, Inc. 12/4/2012
“Since founding our company 10 years ago we have grown from 2 to over 20 employees through reinvestment of any profits into manufacturing equipment, quality people, and employee benefits. Higher taxes mean less cash to reinvest - simple as that. We won't be hiring more people and we won't be purchasing equipment to expand the company. This is not complicated, higher taxes retard economic growth.” – David Curliss (Dayton, OH) Performance Polymer Solutions Inc. 12/4/2012
“The new taxes will keep me from hiring this year, even though I could use another employee. I pay more in taxes already than I take home. I, like many other small business owners, reinvest in the company and employees rather than taking the money for personal use. The new taxes are going to be very hard on my company. We cannot afford any more taxes or restrictions.” – Kim Irwin, President/Owner (Huntington, WV) Integrity Wire Inc. 12/3/2012
“I own an S-Corp that designs, installs, and commissions systems that provide cell phone and radio coverage inside of buildings. We have been doing this for 12 years and finally reached the 250K profit margin that the President doesn't like. We used the money to pay off the loans that we had to take out to keep operating in this recession and keep our 6 employees hired. As a result, I am paying taxes as if I made more than 250K, but really only paid myself 70K. The result is we are broke, but I feel like I am being punished for working hard. It is hard to describe.” – Mike Tackett (Littleton, CO) BTS Wireless, Inc. 12/4/2012
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| December 7, 2012 |
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| What We're Reading |
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Small Biz Resources
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| Tweet of the Week |
WSJ Small Business: @WSJsmallbiz Small Firms Fret Over Higher Taxes: http://on.wsj.com/XrWBuz Retweeted by @SmallBizGOP
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