Category Archives: economy

Creating Jobs Through Small Businesses

By Congressman Steve Austria

If we want to get serious about our nation’s unemployment crisis, we must provide certainty in the marketplace and look at how to help our job creators, and small business owners. One economic booster to get people back to work is through small business growth as these small businesses and farms help create about seven of every ten new jobs in America. To jump start our economy and get Americans back to work, Washington must also do its job by stopping all the wasteful borrowing and out-of-control spending; reducing taxes; removing the Washington red tape and the burdensome regulations; put an energy policy in place that has less reliance on overseas foreign oil; and finally addressing the government health care reform issue by focusing on lowering the cost of healthcare for hard-working families and small businesses.

A 2010 study by the Small Business Administration found that small businesses were disproportionately affected by federal regulations with an annual regulatory cost per employee that is 36 percent higher than the costs facing large firms. Additionally, whether a small business pays taxes at the corporate or individual level, it can face up to a 35 percent federal tax rate. Recently, I supported legislation that Congress passed, which will enable small businesses with fewer than 500 employees to use extra capital to invest, grow, and create more jobs through a 20 percent tax deduction.

During a time when job growth has stunted we cannot allow for the federal government to raise taxes on our job creators and impose unnecessary regulations – all which stifles job growth. It is our small businesses that are the backbone of our economy.

The Ohio Economy in March, A Report by Buckeye Institute

Buckeye Institute’s “Ohio By The Numbers” March report compares Ohio to other states in overall private sector job growth over several distinct time spans. The goal is to illustrate Ohio’s overall economic trajectory over the past 22 years while capturing its specific performance during both boom and bust cycles as well as its current recovery.

The periods analyzed are: from 1990 until the present day, from peak employment in 2000 through the present day and from the beginning of the current decade to the present day.

Ohio lost 8,300 private sector jobs in March and fell to 23rd nationally in terms of private sector job growth since January 2010, growing at a 3.4 percent rate (top ranked North Dakota grew 15.8 percent over the same time span). Meanwhile, Ohio continued to rank 47th for private sector job growth since January of 1990, growing at 5.9 percent (top ranked Nevada grew 82.9 percent over the same time span).

Assuming the “Best Case Recovery” scenario of a private sector growth rate similar to the 1990s boom, Ohio will not recover to peak employment of 4.85 million, which was reached in March 2000, until at least March 2017. It is more likely that peak employment will not return until the early 2020s.

As for individual industry sectors, only Professional and Business Services and Education and Health Services have more people employed in them than in either 1990 or 2000.

Additionally, the report shows that Forced Union states (which includes Ohio and most of its neighbors with the recent exception of Indiana which became a worker freedom state in February) had a private sector growth rate far below Worker Freedom states. Since 1990, Worker Freedom states’ private sector jobs grew at a 36 percent rate vs. only 13 percent for Forced Union states. Even during the decade from 2000-2010, which included the tech bubble burst of 2000 and the “Great Recession” of 2008-2009, Worker Freedom states gained jobs for a minimal growth of around 0.1 percent while Forced Union states lost 5 percent. Since 2010, Worker Freedom states also outperformed Forced Union states, growing at a 4.1 percent rate vs. only 3.4 percent.

What if Fannie Mae and Freddie Mac Were Eliminated?

By Mike Brownfield

For the past several years, it’s not been an uncommon sight in Anytown, USA, to drive down the street and see home after home for sale after going through foreclosure. They are the still-lingering hangover from the housing crash that began in 2007. Though the true cause of what burst America’s housing bubble is still debated, two of the culprits — housing finance giants Fannie Mae and Freddie Mac — are still going strong even though both essentially failed in 2008 and are under government control. Economists and politicians alike are now pondering whether we need Fannie Mae and Freddie Mac at all and what would happen if they were eliminated altogether.

For several years prior to 2007, home prices went through the roof, but then they crashed through the basement. Since then, more than 2.3 million homeowners have faced foreclosure — an 81 percent increase over 2007. This all, of course, contributed to the Great Recession we’re still rebuilding from today. “Easy credit” is pointed to as the corrosive acid that ate away at the housing market’s foundation, and federal government-sponsored mortgage finance giants — the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) — were there to supply it and help other lenders to do so.

Consistent with policies dating back to the Carter and Clinton Administrations, Fannie Mae and Freddie Mac made it easier for low and moderate income Americans to obtain mortgages and purchase homes. In a new paper from The Heritage Foundation, A Housing Market Without Fannie Mae and Freddie Mac: Effect on Home Prices, Nahid Anaraki reports that this “fueled an excessive expansion of credit in the housing sector, shifted the demand for real estate to the right, and caused home prices to overshoot their underlying market equilibriums.” In other words, Fannie Mae and Freddie Mac’s intervention in the housing market helped to fuel the boom-to-bust housing bubble by subsidizing interest rates and enabling reduced down payment requirements on single-family homes, thus unnaturally boosting demand and causing prices to go up.

The trouble with all this, Heritage reports, is that though Fannie Mae and Freddie Mac have made it easier for a family to buy a home, in the long run their actions have a detrimental effect on the economy, as America has witnessed.

So what would happen if Fannie Mae and Freddie Mac were phased out? Would the absence of their ability to offer lower interest loans and smaller down payments impact the cost of homes in America? Anaraki’s analysis shows that it would not. In fact, interest rates and changes in down payment requirements have little influence on housing prices. Instead, fundamentals–such as household assets, personal income, the S&P Index, and the effective tax rate–play substantial roles in shaping home prices. As such, she advises, it’s time for Washington to get out of the business altogether:

The federal government should avoid offering any subsidy in the form of lower interest rates or lower down payments because it adversely affects both the housing market and the economy over the long term. Although such a policy may boost the demand side in the short term, it risks inflating another housing bubble in the medium or long term.

Eliminating Fannie Mae and Freddie Mac, in fact, will help more Americans afford homeownership. Since these institutions increase demand — thereby increasing home prices — it becomes increasingly difficult for lower-income Americans to afford to purchase homes without subsidized interest rates. If Fannie Mae and Freddie Mac are eliminated, interest rates may slightly go up initially, but Anaraki finds that “higher interest rates will lead to lower median home prices, which in turn will increase the ability of low-income groups to purchase a house.” What’s more, competition among housing lenders would increase, leading to lower interest rates in the medium to long term.

Owning your own home is the American Dream, but suffering a foreclosure and winding up on the streets is the American Nightmare. In pursuit of encouraging the former, the federal government helped produce the latter. Government intervention by way of Fannie Mae and Freddie Mac may have given more Americans the keys to their own homes, but they bought homes they could not afford and in a marketplace that could not be sustained. As Heritage showed in an earlier paper, Fannie Mae and Freddie Mac can be phased out without disrupting the housing recovery. A better way forward is to phase out Fannie Mae and Freddie Mac and let the home market find a healthy and sustainable equilibrium.

Mike Brownfield is Assistant Director of Strategic Communications at The Heritage Foundation. He serves as editor of The Foundry, Heritage’s public policy news blog, as well as the “Morning Bell,” one of Washington’s most widely read and influential e-newsletters. This article was originally published in the “Morning Bell” newsletter on April 20, 2012.

Regional and State Employment Report

Regional and state unemployment rates were little changed in March. Thirty states recorded unemployment rate decreases, 8 states posted rate increases, and 12 states and the District of Columbia had no change, the U.S. Bureau of Labor Statistics reported today. Forty-nine states and the District of Columbia registered unemployment rate decreases from a year earlier, while New York experienced an increase. The national jobless rate was little changed from February at 8.2 percent but was 0.7 percentage point lower than in March 2011.

In March 2012, non-farm payroll employment increased in 29 states and the District of Columbia, decreased in 20 states, and was unchanged in Alabama. The largest over-the-month increase in employment occurred in New York (+19,100), followed by California (+18,200) and Arizona (+13,500). The largest over-the-month decrease in employment occurred in Ohio (-9,500), followed by New Jersey (-8,600) and Wisconsin (-4,500).

The West continued to record the highest regional unemployment rate in March, 9.6 percent, while the Midwest again reported the lowest rate, 7.4 percent. Over the month, only the South experienced a statistically significant unemployment rate change (-0.2 percentage point).

Nevada continued to record the highest unemployment rate among the states, 12.0 percent in March. Rhode Island and California posted the next highest rates, 11.1 and 11.0 percent, respectively. North Dakota again registered the lowest jobless rate, 3.0 percent, followed by Nebraska, 4.0 percent. In total, 23 states reported jobless rates significantly lower than the U.S. figure of 8.2 percent, 7 states and the District of Columbia had measurably higher rates, and 20 states had rates that were not appreciably different from that of the nation. Ohio was among those 20 states.

In spite of the loss of 9,500 jobs, Ohio gained 56,000 jobs since March 2011.

Not exactly earth-shaking figures, but at there is some good news.

Source: Bureau of Labor Statistics, Regional and State Employment and Unemployment Summary, April 20,2012.

Jailing Americans for Profit: The Rise of the Prison Industrial Complex

By John W. Whitehead

In an age when freedom is fast becoming the exception rather than the rule, imprisoning Americans in private prisons run by mega-corporations has turned into a cash cow for big business. At one time, the American penal system operated under the idea that dangerous criminals needed to be put under lock and key in order to protect society. Today, as states attempt to save money by outsourcing prisons to private corporations, the flawed yet retributive American “system of justice” is being replaced by an even more flawed and insidious form of mass punishment based upon profit and expediency.

As author Adam Gopnik reports for the New Yorker:

[A] growing number of American prisons are now contracted out as for-profit businesses to for-profit companies. The companies are paid by the state, and their profit depends on spending as little as possible on the prisoners and the prisons. It’s hard to imagine any greater disconnect between public good and private profit: the interest of private prisons lies not in the obvious social good of having the minimum necessary number of inmates but in having as many as possible, housed as cheaply as possible.

Consider this: despite the fact that violent crime in America has been on the decline, the nation’s incarceration rate has tripled since 1980. Approximately 13 million people are introduced to American jails in any given year. Incredibly, more than six million people are under “correctional supervision” in America, meaning that one in fifty Americans are working their way through the prison system, either as inmates, or while on parole or probation. According to the Federal Bureau of Prisons, the majority of those being held in federal prisons are convicted of drug offenses—namely, marijuana. Presently, one out of every 100 Americans is serving time behind bars.

Little wonder, then, that public prisons are overcrowded. Yet while providing security, housing, food, medical care, etc., for six million Americans is a hardship for cash-strapped states, to profit-hungry corporations such as Corrections Corp of America (CCA) and GEO Group, the leaders in the partnership corrections industry, it’s a $70 billion gold mine. Thus, with an eye toward increasing its bottom line, CCA has floated a proposal to prison officials in 48 states offering to buy and manage public prisons at a substantial cost savings to the states. In exchange, and here’s the kicker, the prisons would have to contain at least 1,000 beds and states would have agree to maintain a 90% occupancy rate in the privately run prisons for at least 20 years.

The problem with this scenario, as Roger Werholtz, former Kansas secretary of corrections, recognizes is that while states may be tempted by the quick infusion of cash, they “would be obligated to maintain these (occupancy) rates and subtle pressure would be applied to make sentencing laws more severe with a clear intent to drive up the population.” Unfortunately, that’s exactly what has happened. Among the laws aimed at increasing the prison population and growing the profit margins of special interest corporations like CCA are three-strike laws (mandating sentences of 25 years to life for multiple felony convictions) and “truth-in-sentencing” legislation (mandating that those sentenced to prison serve most or all of their time).

“And this is where it gets creepy,” observes reporter Joe Weisenthal for Business Insider, “because as an investor you’re pulling for scenarios where more people are put in jail.” In making its pitch to potential investors, CCA points out that private prisons comprise a unique, recession-resistant investment opportunity, with more than 90% of the market up for grabs, little competition, high recidivism among prisoners, and the potential for “accelerated growth in inmate populations following the recession.” In other words, caging humans for profit is a sure bet, because the U.S. population is growing dramatically and the prison population will grow proportionally as well, and more prisoners equal more profits.

However, while a flourishing privatized prison system is a financial windfall for corporate investors, it bodes ill for any measures aimed at reforming prisoners and reducing crime. CCA understands this. As it has warned investors, efforts to decriminalize certain activities, such as drug use (principally possession of marijuana), could cut into their profits. So too would measures aimed at reducing the prison system’s disproportionately racist impact on minorities, given that the incarceration rate for blacks is seven times that of whites. Immigrants are also heavily impacted, with roughly 2.5 million people having been through the immigration detention system since 2003. As private prisons begin to dominate, the many troubling characteristics of our so-called criminal justice system today—racism, economic inequality, inadequate access to legal representation, lack of due process, etc.—will only become more acute.

Doubtless, a system already riddled by corruption will inevitably become more corrupt, as well. For example, consider the “kids for cash” scandal which rocked Luzerne County, Penn., in 2009. For ten years, the Mid Atlantic Youth Service Corporation, which specializes in private prisons for juvenile offenders, paid two judges to jail youths and send them to private prison facilities. The judges, who made over $2.6 million in the scam, had more than 5,000 kids come through their courtrooms and sent many of them to prison for petty crimes such as stealing DVDs from Wal-Mart and trespassing in vacant buildings. When the scheme finally came to light, one judge was sentenced to 17.5 years in prison and the other received 28 years, but not before thousands of young lives had been ruined.

No matter what the politicians or corporate heads might say, prison privatization is neither fiscally responsible nor in keeping with principles of justice. It simply encourages incarceration for the sake of profits, while causing millions of Americans, most of them minor, nonviolent criminals, to be handed over to corporations for lengthy prison sentences which do nothing to protect society or prevent recidivism. This perverse notion of how prisons should be run, that they should be full at all times, and full of minor criminals, is evil.

Constitutional attorney and author John W. Whitehead is founder and president of The Rutherford Institute. He can be contacted at johnw@rutherford.org. Information about the Institute is available at www.rutherford.org.

Perspective On Progressive Tax, Buffet Rule & Obama Plan

By Daniel Downs

In an article published in the Tax Analyst, Martin A. Sullivan explains why the tax code is not genuinely progressive.

Almost everybody assumes the individual income tax is progressive — that is, that higher income categories pay higher effective tax rates than lower income categories. That is true only up to a point, as shown in Figure 2. The schedule of effective tax rates in the United States is not steadily upward sloping. Depending on the year, average tax rates begin declining somewhere in the $2 million to $5 million range. For adjusted gross income over $10 million, the average effective tax rate was 19.7 percent in 2007 and 22.6 percent in 2009. The income tax is regressive at the upper end.

There is a simple explanation for both the declining rates at the top end and the rise in top-end rates in 2009 over 2007: the 15 percent rate on capital gains and qualified dividends. As income rises, an increasingly larger share of income comes in the form of dividends and capital gains. And there were more capital gains in the boom year of 2007 than there was in the depths of the recession in 2009.

Application of the Buffett principle would eliminate the dip in tax rates at the high end. The Buffett rule is roughly equivalent to an increase in the tax rate on capital gains and dividends on millionaires.

This helps explain why secretaries of both Buffet and President Obama pay higher income tax rates while earning much less than their bosses.

Yet, Sullivan began his article stating why the Buffet Rule may not be a good idea. “[I]t is a basic tenet of tax economics that an efficient system should eliminate all taxes on capital income,” which “translates into big tax benefits for the wealthy.” In other words, it’s not a good idea to tax non-wage related investment income, capital gains or corporate profits because doing so multi-taxes wage income. (See Economist, Feb. 24, 2012)

Capitol Hill bureaucrats like Obama actually may want to raise about $5 billion more in annual revenues to help ease the imperial burden. However, it is more likely they want to create a genuine socialist economy. From the beginning of his presidency, Obama’s sought to fuflill the party’s agenda for a coherent socialist system. Evidence of his efforts is the passage of the Obamacare legislation. Another piece of evidence is his ties to the progressive policy agendas of the Communist Party.

Information about progressive Democrats ties to the Communist Party (CPUSA) is coming out since the public ire about Congressman Allan West’s statement that about 81 of the Congressional Progressive Caucus were members of the Communist Party. As journalist Cliff Kincaid recent commented, “Joelle Fishman, chair of the political action commission of the CPUSA, openly campaigned for Barack Obama” because of the progressive affiliation between the two. “Trevor Loudon,” Kincaid continued, “points out that ‘Joelle Fishman is the daughter-in-law of Soviet spy Victor Perlo. Her role within the Communist Party involves coordinating efforts to elect progressive Democrats to state and national office and seeing that the Democrats adopt Communist Party inspired policies.'” She is one of many working to achieve the same goal. The clincher is that Obama’s political mentor was Communist Party member Frank Marshall Davis.

Kincaid sums up the Obama plan that includes more progressive tax code: “The CPUSA is working through the Democratic Party as a whole, as well as the Obama Administration.” It is reasonable to assume that underlying Obama’s plan to tax wealthy is the goal of creating a socialist economy through progressive taxation. Such would be a win for the CPUSA. Maybe that is why neither the “Buffet Rule” nor any plan of Democrats proposes to eliminate the capital gain taxes.

Long live McCarthy!!!

If Taxes are the Solution, What’s the Problem?

by Cameron Smith

Alabama’s legislative leadership and Governor are under immense pressure in Montgomery to increase taxes to prevent cuts in state government funding. But is the real problem a lack of revenue?

The cuts themselves seem to be the most obvious source of consternation. So far, some Alabama agencies are engaging in spending reductions through attrition, not filling vacancies as current staff departs while others delay upgrades or capital purchases. In other words, state agencies seem to be doing what they can to prevent laying off employees. But, at some point, fewer employees tasked with administering the same government programs in the same manner may inevitably lead to reduction in state services or the elimination of state programs.

In many respects, these reductions create heartburn because the programs that may be eliminated are “good” programs. For example, Alabama’s Department of Human Resources will close an adult day-care program that enrolls about 380 people. The closure of the program will save taxpayers over two million dollars annually.

However, for the 380 people enrolled in the day-care program and their families, the elimination of the program means the removal of a substantial benefit. In a very real and meaningful sense, a good program is being terminated. But even if a thousand people are negatively impacted by the elimination of the program, how does their interest stack against the other 4.8 million Alabamians who would rather see those resources go in a different direction or remain in the pockets of taxpayers?

The immediate response that the adult day-care program and others like it should be preserved by increasing taxes makes two baseline assumptions worth challenging. First, it assumes that state government is as efficient at administering its programs and services as it could be. That is one bold assumption. Alabama has no statewide fleet management policy, antiquated payroll and time- keeping practices, and inadequate state-owned land and space management. And those are just a few issues on the internal administrative side of the equation before ever discussing efficiencies in delivering the actual services to the public.

The second assumption is that the majority of Alabamians actually want or need all of the programs and services the state currently provides. One common sentiment from those awestruck that Alabamians would want to reduce their own government is that most Alabamians are incapable of actually understanding what the “limited government” they are asking for actually requires.

But what if the people do understand? What if the people of Alabama actually intend to reduce the size and budgets of their government? Many Alabamians know that some services and programs currently provided by the government may need to be eliminated, but the tradeoff would be retaining lower taxes and prioritized government spending and services.

Maybe the pressure in Montgomery is coming directly from those with a direct financial interest in maintaining the current size and form of government. Most state employees, lobbyists, unions, and even the various agencies themselves stand to feel significant pain if government is reduced. While there are some easy cutbacks, such as eliminating unnecessary entities like the Interior Design Board, leaner government will eventually mean tougher choices.

Reducing the size of government will not, itself, lower the number of the poor and needy currently served by the state. Alabamians must be willing to open their hands and hearts to the poor and downtrodden in their midst in a reliable fashion if they want to cut programs serving those communities.

If Alabamians plan on reducing the size and budget of their government, revenue reductions provide the pressure necessary to force their legislators to prioritize. On the other hand, if they want higher taxes to pay for state programs and services, they had a funny way of showing it at the ballot box in 2010.

Cameron Smith is General Counsel and Policy Director for the Alabama Policy Institute, a non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families, which are indispensable to a prosperous society.

JOBS Act Passes U.S. Senate, Several Amendments Opposed by Small Business Leaders

The National Small Business Association applauded the Senate for bipartisan passage (73-26) of the JOBS Act late last week. Although not identical to the House-passed version, the amended Senate bill will, without question, positively transform the ability of small businesses to raise capital and help companies generate sustainable economic growth and jobs.

“There is a direct correlation between job growth and small-business owners’ ability to garner financing,” stated NSBA President and CEO Todd McCracken. “This is the right bill at the right time, and we applaud the Senate for moving beyond partisan politics to pass this very important legislation.

Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan issued the following statement upon U.S. Senate passage of the JOBS Act:

“Startups and high-potential businesses have been plagued by a capital chasm since the financial crises, and the JOBS Act offers several reforms to help entrepreneurial firms at their various stages of growth and development. We would prefer that the crowdfunding provision be less onerous and complex, and feel the Securities and Exchange Commission has been given to much rein from a regulatory perspective (Reed amendment). Still, the Merkley amendment to H.R. 3606 was an improved measure from the original Senate bills. We applaud President Obama for his support of this initiative, as well as the bipartisan collaboration in Congress that made this legislation possible,” said Kerrigan.

According to Kerrigan, the final product will be a powerful package with significant benefits for the small business community. Other reforms contained within the JOBS Act will help small businesses access and accelerate their growth in the public markets. Inflexible and costly rules impeding the growth of promising enterprises are properly addressed in H.R. 3606, allowing these firms to more efficiently scale up while freeing up more resources for investment and job creation.

“A strong entrepreneurial ecosystem depends on access to capital. Freeing up new sources of capital – as the JOBS Act will do – will strengthen our nation’s small business sector, and add to their job creating capacity,” added Kerrigan.

Majority Leader Eric Cantor (R-VA) said the U.S. House would vote on the Senate amended package early next week.

However, prior to the Senate vote, Kerrigan stated opposition to both the Reed and Merkley amendments for the following reasons:

“The Reed Amendment (#1931) proposes a significant policy change that will burden small businesses with new and costly Security and Exchange Commission (SEC) registration and compliance burdens. The intent of H.R. 3606 is to help jumpstart and encourage entrepreneurship, small business growth and investment – not drive up their costs. The Reed Amendment eviscerates Section 601 of the legislation for community banks, which means they would be deprived of the opportunity to raise capital. That means less lending to the communities and small businesses they serve.

“The Merkley Amendment (#1884) unnecessarily restricts the potential of crowdfund investing. The Amendment imposes excessive costs and burdens on small issuers, provides for unfettered regulatory activity by the SEC, and is too restrictive and complex when it comes to setting and defining investment limits. For example, audit requirements in the Amendment represent a significant barrier to entry (a “crowdfunding tax”) that many promising and eligible small businesses will not be able to afford. Why require an audit for the smallest of firms when a CPA review would do? With respect to SEC oversight, the Amendment goes overboard in granting the agency profound authority. The potential for regulatory intrusiveness is a major concern, particularly as the SEC has not demonstrated a consistent record of action in responding to the concerns of small businesses. SBE Council believes the $1 million cap in the Amendment is too low, and the caps on individuals are far too complex.”

If the amended JOBS bill is passed by the House, it is still expected more small businesses and start-ups will get the adequate funding they need, more jobs will be created, and a healthier pro-business environment will be created.

Ohio Unemployment Drops to 7.7% in Janaury

By Daniel Downs

The Ohio Labor Market Review reported a drop in unemployment from 7.9% in December to 7.7% in January. The national unemployment also dropped two tenth of a percent (8.3%) in January. Employment gains were seen primarily in the service sectors and good producing industries.

The number of new jobs in the service sector included 6,800 leisure and hospitality jobs, 6,000 in education and health services, 5,300 in business related services, 3,200 new trade, transportation and utilites jobs, 2,400 in financial services, 100 in government, and 2,400 more jobs in other industries. The construction industry added 6,200 jobs and manufacturing 1,400 new employees. I’m sure new schools, new or or renovation of health facilites, and military and other government facilities increased the demand for a substantial number of the new construction workers.

The Labor Market Review also reported a decline of weekly pay ($11.18/wk) and hours worked (.6/hrs) by factory employees.

Overall, Ohio employee weekly benefits increased slightly by $4.27

Like the nation, Ohio has a long way to go before reaching pre-recession levels of employment. The 2006 unemployment rate was 5.4% and it was 4.0% in 2000. It took nealy over 3 years for the unemployment rate to reach the current rate of 7.7% from its peak of 10.1% in 2009. Hopefully, the current momentum will shorten the time it will take to reach the 2006 rate. However, many–if not most–of the government stimulated jobs will have come to end.

Corporate Tax Reform

By Congressman Steve Austria

As Washington struggles to come up with a jobs plan to help turn our economy around, last week, President Obama unveiled his proposed framework for corporate tax reform. While it acknowledged that the corporate tax rate is too high, this proposal fails to provide details or address the need for a comprehensive overhaul of the current tax code. Additionally, the president recently released his FY 2013 budget request, which did not call for lowering the individual or corporate tax rates and contained more of the same increased tax policies that have failed to put us on a track of economic recovery.

Lowering the corporate tax rate to be more comparative internationally is a step in the right direction but our current tax code is outdated, overcomplicated, and in need of a reform that does not pick winners and losers in the marketplace. It’s estimated that American taxpayers spend over 7 billion hours a year trying to comply with the current filing requirements. Each year taxpayers scan through 60,000 pages and make difficult decisions to choose between calculations from tax credits or deductions. Our tax code is ridden with loopholes and unnecessary complexity that discourages saving and investing. We must simplify our tax code and cut the red tape to ensure a fair tax system for our working and middle class Americans. Congress needs to pass a tax reform package that will help create new jobs not hurt small businesses and hardworking families. Americans deserve a tax code that is simpler, fairer, and will enable U.S. businesses to compete with the rest of the world.

Small businesses owners have cited the cumbersome tax code and uncertainty about the economy as main reasons they are not expanding and creating jobs. We need to work to provide permanent tax relief for our small businesses to give them the certainty they need to reasonably plan, invest and hire. Any real effort for tax reform must ensure small business tax rates are low and provide more certainty for our small business owners and our job creators.