I took a risk in 1999, joining a small start-up company operating out of two cramped little business condos in Valley Forge Commons with only 8 employees at the time. It was a struggle to survive in a highly competitive market, and Clinton's 1993 tax increase to 39.6% caused the owner to cling to any cash reserves, mistrusting that Administration. Flash forward to the Bush tax cuts in 2001: the owner availed himself of the cuts and risked purchasing one additional half-million dollar piece of equipment.
He and I worked literally 20 hour days for endless winter months and we needed help. So we hired. Just like that, 13 new jobs we created. The owner used some of the revenue to purchase a better health insurance plan for employees while increasing their take-home pay and incentive bonuses. I still help manage the company which now employs 200 and pays a boatload of taxes. The photo was taken about 4 years ago at the Malvern headquarters we purchased in 2006.
A true local success story which would not have unfolded the way it did without those tax cuts.
Multiply those 13 jobs we created over 10 years ago by any subset of the 30 million small businesses now across the U.S. and what do you get? Is it so difficult to understand Romney's strategy for creating jobs and increasing income while growing the tax base, increasing revenue and decreasing debt thanks to millions of new taxpayers?
The Obama-Biden tax plan hikes the small business tax rate from 35 percent now (world's second highest rate) to over 40 percent next year. Obama says “only” 3% of small business owners will be affected by his tax rate hike. A huge lie. This is a tax increase on one million successful small businesses (i.e. 3% of the 30 million small business tax returns filed annually).
The Obama-Biden plan will raise taxes on a majority of small business profits and hit those companies which employ the majority of Americans who work for small businesses. Here’s how:
Unlike corporations, business profits flow through to owners. The owner pays taxes on her small business by adding profits to her income tax form. Therefore, personal income taxes are the same thing as small business taxes.
The Obama-Biden plan to raise the top two marginal income tax rates (from 33 and 35 percent today to 36 and 39.6 percent, respectively) is a hike in America’s small business tax rate. This does not include Obamacare’s 3.8 percent small business surtax.
Per the IRS, most small business profits face taxation in households making more than $200,000 per year. The IRS keeps track of two types of small business income: sole proprietors, and “pass-through” entities like partnerships and S-corps. There are 30 million tax returns reporting small business income. Owners report business profits of $590 billion. $477 billion faced taxation in households making more than $200,000 a year.
Why is unemployment so high under Obama compared to past recoveries?
Because small business owners, the ones who create the new jobs, remain on strike. Under Romney's plan, proven successful in the past, the strike ends. Under another four years of Obama, who with two weeks left in his campaign finally this week released a "plan" (recycled more of the same, tax-tax-tax) - it will get even worse, much worse.
Tale to conclude on November 6. Please make it a happy one for us all.