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Saturday, August 8, 2009
The attached article from the Heritage Foundation's Rea S. Hederman, Jr. provides an excellent summary of the impact of the Dems proposed tax increase on small business owners. The large tax increases proposed by House Ways and Means Chairman Charlie Rangel (D-NY) would harm over a million small businesses, making them less likely to expand and hire new workers. The surtax is 1% for joint filers over $350,000, 1.5% for joint filers over $500,000, and 5.4% for joint filers with over $1 million in adjusted gross income ($280,000, $400,000, and $800,000 for individuals, respectively). The Joint Tax Committee estimates that the Rangel surtax will raise $543.9 billion over the next 10 years.
Health Care Cost Impact on Small Businesses
In addition to the surtax, the House health care bill would force small businesses with at least $250,000 in payroll to provide health insurance or pay a tax penalty up to 8% of payroll. Almost all small businesses and employees would be affected: Over four-fifths of all small businesses employees are in firms with more than nine employees, and almost all firms with 10 or more workers have more than $250,000 in payroll. It is estimated that 32 million employers will offer health insurance as a result of this legislation. This means that 32 million companies will either raise the prices of their goods, reduce wages to maintain the same overall level of compensation, or cut jobs and work hours.
Consumer Cost and Wage Impact
It is estimated that 32 million employers will offer health insurance as a result of this legislation. This means that 32 million companies will either raise the prices of their goods, reduce wages to maintain the same overall level of compensation, or cut jobs and work hours.
This proposal by the democratic controlled Ways and Means committee certainly supports President Obama's pledge to Joe the plumber -"Share the Wealth". Please write your Congressman to vote against this proposal. The democratic Congress' policies for taxes, health care reform, cap and trade and compensation oversight is putting an economic stranglehold on both large and small businesses. The result will be no future for either in terms of success or job creation.