Does the Expiration of Tax Rates Impact Your Business?

  • Dear Congressman Graves, I am the President and CEO Allied Associates International, Inc. We are a small business that supports the Department of Defense and the Intelligence Community. As yet sequestration has not affected our business but should it become a reality it could, in one fell swoop, destroy our company. I am sure that the large defense contractors will be hurt by sequestration, but they will survive. Small companies like mine, however, do not have the fiscal resources to stay in business while the Government sorts out the issues surrounding sequestration. As a result the people employed by small businesses will go from being vital, contributing members of our economy to being a drain on it, a drain that I am not convinced the economy itself can tolerate. In twenty years the country, I am sure, will recover from the devastation sequestration will cause. Unfortunately my employees cannot wait twenty years, or even two years, for a recovery. Their families need to eat every day; their mortgage must be paid every month; these things cannot be put off for another budget cycle. I understand that the country must do something about getting its debt under control. But I cannot see how throwing over a million people onto the unemployment rolls will aid in that endeavor. Sincerely yours, Perry C. Casto, Jr.Perry Casto (Warrenton, VA) Allied Associates International, Inc.
  • I started a business about 3 years ago manufacturing and commercializing products for coating Petri dishes for researchers doing cell culture experiments. We have grown our product line to 50 products. Our business has grown >30% per year and is profitable employing 3 employees. There is a significant opportunity to grow business and I would like to expand the business further. However, due to the uncertainties with the new health care law, questions about the Obama Administration's wanting to 'spread the wealth' via taxation and the question about sequestration (cutting funds for medical research), I have decided to allow only modest growth of the company keeping it small to avoid the ramifications of high taxes and requirements for corporate health care. 

    David Bagley (Poway, CA) Advanced BioMatrix

  • "As owner of a small business that just turned 5 years old and is a Subchapter S, we've grown from 3 employees to almost 50 in the last 5 years. The growth has kept our income low, as we've invested back into the company in the form of additional jobs and equipment. We have always had to tax plan at the year's end because we've never seen a penny of what the company has made, with the exception of what we've had to pull out for taxes on the income we've not seen. Bottom line, raising our taxes means we'll quit growing, lay off people and stay under the $250K level for income. We are not the problem." Steve Piechota (San Jose, CA) Netronix Integration
  • "This additional tax, along with the Health Care Act would definitely suppress our growth. We would have to make sure that we continually upgrade our staff while keeping our active staff at a low number. Our margins are already stressed to the max and this would hurt our lower income employees. My guess is that we would have to start looking for ways to outsource some of our jobs in order to keep the company solvent. This is the worst time to put this kind of pressure on any small business. If the Government is trying to reduce hiring and to reduce the number of small businesses then they are on target. If they wish to grow employment and increase the tax base then they are way off target." Steve Woodall (Houston, TX) Reliant Business Products
  • "My wife and I own a subchapter (S) business that develops and manufactures realistic artificial wounds and medical mannequins to train combat medics and emergency medical personnel. 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. If Obama succeeds as he announced today, we will be "rich" and pay higher tax rates, and probably lose the other advantages of the Bush tax cuts as well." Dave Parry (Willow Grove, PA) MPS Techline of PA, Inc.
  • "I understand what the President is trying to do - I really do, but he is not going about it the right way. Small business is the backbone of our country and allows us to keep American's working. Since any profit is a pass-through on a personal tax return - it very seldom actually goes into the hands of the business owner. It allows the business owner to grow the business and expand - employing more Americans and increasing wages of those already working hard. If we have to take our profits as we have in the past and hand them over in the form of taxation - it will force companies like mine to keep wages lower and hire less people - or lay off those working for us to compensate for the taxes. It is not in the best interest of our country." Gloria Cuerbo-Caley (Canton, OH) Media Resources, Ltd
  • "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. We provide Health Care, Retirement Benefits and matching payroll funds to our employees like any other business does, but yet we are continually being over-taxed by the Government. 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. Wealthy - I don't think so." Becky Hinkle (Kansas City, MO) Bears Printing, Inc.

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