By Congressman Steve Austria
In the past month, I have talked with many small business owners across the 7th Congressional District – from farmers to manufactures to members of our local chambers of commerce. Each has questioned and voiced their concerns regarding the temporary tax cuts put in place in 2001 and 2003 that will expire on January 1, 2011 if Congress does not take action.
If Congress allows the tax cuts to expire, it will equate to a $3.8 trillion tax increase that will affect all taxpayers. With the numerous taxes already imposed in legislation ushered through by current Congressional leadership, the last thing Ohioans need right now are further tax increases. In particular, small businesses – which produce 70 percent of new U.S. jobs – will see a direct impact that will affect their ability to create and sustain area jobs.
Specifically, if the tax cuts are not extended the individual income tax rates will increase across the board. Not only does this take money out of the wallets of all taxpayers, but many small businesses are taxed by this rate as well. This increase could be detrimental to those businesses that are already facing difficulties in obtaining credit and meeting payroll.
In addition, if no action is taken the federal estate tax will be reinstituted. This tax disproportionately affects small businesses and family farms. Many times, upon the death of an owner, small businesses are forced to sell to pay this tax and jobs are lost.
The indecision surrounding this issue is causing uncertainty for our local businesses who are seeking assurance in these difficult economic times. Congress needs to make the tax cuts permanent including the estate tax, capital gains tax and dividends tax to assist in creating an environment of confidence and encouraging local entrepreneurs to invest in their businesses creating long-term, sustainable jobs.
Beyond permanently extending the tax cuts, Congress needs to stop the spending. According to a recent U.S. Census Bureau report, federal domestic spending increased by 16 percent to $3.2 trillion in 2009. This does not include any interest paid on foreign debt. If we don’t stop the spending and let Americans keep more of their hard-earned money we won’t be able to turn the economy around.