| Weekly Update from Sam |
Dear Friends,
As summer ends and our children start a new school year, it strikes us how fast the time goes by. Soon, the holidays and a new year will be upon us. It’s normally a time of celebration, but the end of 2012 is a growing worry for taxpayers because of an impending fiscal cliff. On January 1, 2013, Americans will see the increase of numerous tax rates and expiration of tax breaks. This concern is holding back an economic recovery. Just the threat of a wave of higher taxes is enough to cause many small businesses to hold off on expansions, investments, purchases and hiring. President Obama’s failure to lead and insistence on tax hikes burdens the economy during a lingering jobs crisis.
The President argues that these lower tax rates are merely expiring, making the change somehow less damaging. That’s ridiculous. By January 1, the current tax rates will have been in place for a decade, making them a longstanding part of planning and budgets for small businesses. This is unquestionably a massive new tax hike, and Americans cannot absorb the blow without more job losses.
President Obama knows this – he said so clearly in 2009 – “you don’t raise taxes in a recession.” Now, he is disregarding basic economics for political division. In this burdened, stagnant economy the President is willing to let taxes skyrocket to give more revenue to the government. After 43 straight months of unemployment above 8 percent, the nation needs responsible leadership from the chief executive to create jobs, not a bigger, more powerful government.
On August 22nd, the nonpartisan Congressional Budget Office issued a report that said a recession is likely next year if Congress fails to act on the fiscal cliff. This week, a group of 298 business organizations called on the President and Members of Congress to immediately enact legislation that averts the looming tax increases. On August 1st, the House voted to pass an extension of all current tax rates, with 19 Democrats joining Republicans, however, the Senate has not taken up the bill (H.R. 6169). I hope the Senate listens to the business community and puts aside politics to do what’s right on behalf of America’s job creators.
Sam Graves
Chairman
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Latest Committee Action
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On Tuesday, the Subcommittee on Healthcare and Technology, led by Rep. Renee Ellmers (R-NC), held a hearing on the Medicare competitive bidding program for durable medical equipment, and its impact on small suppliers. The hearing examined the bidding processes to ensure small suppliers can fairly compete to serve seniors.
On Wednesday, the Committee held a hearing titled, User Fees in the Aviation Industry: Turbulence Ahead, to examine small business concerns about a proposed new fee on general aviation. The Committee heard testimony exposing the financial and regulatory impact that a new user fee would make on the aviation industry. President Obama has proposed a $100 per flight fee on operators. The general aviation community is predominately made up of small businesses, employs about 1.2 million people, and contributes approximately $150 billion to the overall GDP.
On Thursday, the Subcommittee on Economic Growth, Tax and Capital Access, led by Rep. Joe Walsh (R-IL), held a hearing titled, Adding to Uncertainty: Small Businesses’ Perspectives on the Tax Cliff. Small business owners testified that tax increases will put many small firms under tremendous strain in an already difficult economy. The potential expiration of the 2001 and 2003 tax relief at year’s end is already influencing small business decision-making and hiring plans. |
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News from Washington
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On Thursday, the House of Representatives approved the National Security and Job Protection Act (H.R. 6365), legislation by Rep. Allen West (R-FL) – a member of the Small Business Committee – requiring President Obama to submit a plan to Congress by October 15, 2012 for replacing his ‘sequester’ that’s scheduled for January 1, 2013. As structured currently, the arbitrary sequester would gut national defense through severe across-the-board cuts. Despite this pressing responsibility, President Obama has presented no plan for these cuts.
Since the Senate has not passed a budget in three years, on Thursday, the House of Representatives passed a Continuing Resolution to fund the government for six more months. This action further clears the calendar for the Senate to join the House to act to stop the fiscal cliff of tax hikes, and avert drastic, chaotic cuts to national defense through the sequester.
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In Their Own Words
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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:
"This kind of taxation is what is hurting our small businesses today. We are forced by the Administration to jump hurdles that really should apply only to large businesses… Of course unemployment is running high, no one can afford to add employees at this time. We just work leaner with longer hours to get by and have less to show for it in the end.”
– Becky Hinkle (Kansas City, MO) Bears Printing, Inc.
“If we make a year-end profit, it gets taxed at the individual rate, yet we have never taken that profit for ourselves. We always use it for our cash flow needs – paying the 23 employees, buying the necessary raw materials, paying all of the overhead bills, and investing in new equipment. Thanks to the Bush tax cuts, we have been able to expense the equipment and company truck purchases instead of amortizing them.”
– Dave Parry (Willow Grove, PA) MPS Techline of PA, Inc. |
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| September 14, 2012 |
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| What We're Reading |
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| Member Highlights |
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Small Biz Resources
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| Tweet of the Week |
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Rep. Bobby Schilling (R-IL) @RepSchilling 43 straight months of unemployment >8% is disappointing but together we can achieve recovery. I will always be #4jobs. http://trib.in/TqFRBB
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