Hatch: White House Choosing Wall Street, Large Fortune 500 Companies Over Small Businesses
Utah Senator Says, “What kind of message does this send to every mom and pop business across America that the White House is fine with giving corporations a tax cut, while jacking up taxes on the little guys who are the engine of America’s economy?”
WASHINGTON – U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, slammed the White House for siding with big businesses over the small businesses that are America’s top job creators. It was reported that the latest so-called “offer” by the White House yesterday to House Speaker John Boehner on the Fiscal Cliff included not only the insistence that the top two marginal tax rates shoot up to levels not seen in over a decade – hitting nearly a million businesses, most of them small business - but also an offer on corporate tax reform. This comes on top of a call by a group of CEOs of major corporations who have also advocated for these same small business tax hikes in exchange for lower taxes on corporations.
“I get it – these big time CEOs, trying to compete in an increasingly competitive global economy, want corporate tax reform. I want that, too. But to advocate raising taxes on main street businesses in exchange is nonsensical,” said Hatch. “What kind of message does this send to every mom and pop business across America that the White House is fine with giving corporations a tax cut, while jacking up taxes on the little guys who are the engine of America’s economy? Why should corporations get tax reform but not the average American family or small business owner? Choosing Wall Street over Main Street is what the President is doing and it is wrong and unfair. Raising the top two marginal tax rates would hit nearly a million businesses who file on the individual side.”
According to the Joint Committee on Taxation (JCT), 53 percent of all flow-through business income would be subject to the President’s proposed tax hikes on the top two rates. This is especially harmful to small businesses, because the vast majority of small businesses are flow-through business entities, such as partnerships and S Corporations. That same JCT analysis showed nearly one million businesses would be hit with the President’s tax hike plan, facing a top marginal rate hike of up to 24 percent. In addition, a study by Ernst & Young found that the coming tax increases that would hit on January 1, 2013, including the top two marginal tax rates, would put 700,000 jobs at risk.
With the President and congressional Democrats focused solely on this group for future offsets for future spending, the anxiety and uncertainty adversely affected small businesses owners. The monthly small business optimism survey plunged to near record lows. According to a November survey by the National Federation of Independent Business (NFIB), “Nearly half of owners are now certain that things will be worse next year than they are now. Washington does not have the needs of small business in mind.”
Hatch has repeatedly called for comprehensive tax reform – both on the corporate and individual side. The Finance Committee has held nearly 25 hearings examining every aspect of America’s tax code. The last time the tax code was overhauled was under President Reagan in 1986.
According to the Joint Committee on Taxation (JCT), comprehensive tax reform could generate up to 3.5 percent in increased economic growth. Leading economists say it would spur investment, hiring and larger wages.