Washington, DC and Portland, OR – Oregon’s Senator Jeff Merkley hosted a press conference call Wednesday with state and national business leaders to discuss why adding $700 billion to the deficit for a new round of tax cuts for the wealthiest two percent of Americans is bad for business. Business leaders from the U.S. Women’s Chamber of Commerce, Oregon Small Business Council, Main Street Alliance, and South Carolina Small Business Chamber of Commerce explained their opposition to repeating the tax cuts for the top two percent and their support for reinvesting resources in policies that will provide real help to small businesses and the middle class.
“Middle-class families and small business owners need a tax break to shore up their financial foundations, repair the economy, and create jobs,” Senator Merkley said. “On the other hand, borrowing $700 billion from China for tax giveaways for the richest Americans will do virtually nothing to boost the economy and create jobs. We need to focus on rebuilding the middle class and give working families the tools to help drive our economy out of the ditch.”
Business owners on the call underscored the urgency of ending the economically unproductive high-end tax cuts and freeing up resources for serious job creation policies.
“Congress and President Obama should be focusing like a laser on energizing Main Street business and job creation and the infrastructure that underpins it– not doubling down on policies that led to the greatest economic crisis since the Great Depression,” said Margot Dorfman, CEO of the U.S. Women’s Chamber of Commerce. “No amount of smoke and mirrors can change the clear truth of the last decade: the high-end Bush-era tax cuts are contributing to our financial ruin and high unemployment rather than our economic success. They should expire as scheduled on December 31.”
“These tax cuts for the richest two percent are no help to small businesses like mine,” said Jim Houser, owner of Hawthorne Auto Clinic in Portland, OR and a leader with the Oregon Small Business Council and Main Street Alliance. “We need policies that actually help small businesses by restoring consumer purchasing power and spurring demand. Extending federal unemployment benefits would produce 6 to 8 times the economic impact in terms of job growth compared to the tax cuts. And that’s just one example.”
When the Congressional Budget Office studied different options for jumpstarting economic growth and evaluated the Bush tax cuts for the wealthy among a set of 11 policy options, the tax cuts came in last of all 11 options. Houser added, “If we’re serious about helping small businesses and kicking the economy back into high gear, extending the high-end tax cuts will only throw us into reverse.”
While proponents of extending the high-income tax cuts frame their case around concern for small businesses, only three percent of taxpayers who report any business income (let alone income from a small business) earn enough to break into the top two tax brackets. In fact, even this figure overstates the impact on actual small businesses.
“That three percent figure includes partners in large corporate law firms, hedge fund managers, even K Street lobbyists,” said Frank Knapp, President and CEO of the South Carolina Small Business Chamber of Commerce. “These are not America’s job creators. Almost all real small business owners are middle-class Americans with middle-class incomes, and that’s who we need to help create the new jobs to lift the country out of this down economy.”
Business for Shared Prosperity has a new report out on the tax cut issue, The Business Case for Letting High-End Tax Cuts Expire. A fact sheet from the Main Street Alliance is available here. More information is available online at www.businessforsharedprosperity.org and www.mainstreetalliance.org.