06.29.2011 0

Government Programs vs. Jobs

Small Business TaxesBy Rebekah Rast – “We’re not doing it because we want to do it, we’re doing it because if we don’t do it, then, again, I have to go out and borrow a trillion dollars over the next 10 years to finance those tax benefits for the top 2 percent, and I don’t think I can justify doing that,” said Timothy Geithner to the House Small Business Committee as transcribed by CNS News.

What is it exactly that Geithner, U.S. Treasury Secretary, does not want to do, but has to do?

Raise taxes on top income earners.  The same top income earners who are responsible for creating 64 percent of the jobs in this country, Rep. Renee Ellmers (R.-N.C.) informed Geithner at the committee hearing.

In response, Geithner later commented, this “administration felt it had ‘no alternative’ but to raise taxes on small businesses because otherwise ‘you have to shrink the overall size of government programs’ — including federal education spending.”

How do those representing small businesses feel about Geithner’s comments?  Americans for Limited Government (ALG) asked Small Business & Entrepreneurship (SBE) Council its thoughts:

“It would be outrageous for anyone in the administration to say something like that, but coming from the Treasury Secretary it is even more disturbing,” says Raymond Keating, chief economist for SBE Council.  “It is mind blowing and you scratch your head and wonder how this person got in this position.”

In a poll conducted by the National Federation of Independent Business (NFIB), almost two-thirds of business owners view the current period as a bad time to expand, and 71 percent of those blamed the weak economy.

“So many things are pointed in the wrong direction right now,” Keating explains, “the cost of energy, the huge questions on the policy front, spending and the nation’s debt and the issues on the regulatory front like ObamaCare.  We need to get back to something that gives confidence back to small businesses and entrepreneurs.”

And raising taxes on this group of entrepreneurs is not a good place to start.

In a recent press release, Bill Wilson, president of ALG, stated, “Rather than ‘shrink the overall size of government programs,’ Treasury Secretary Geithner wants to raise taxes on small businesses, as if the reason the deficit has skyrocketed to $1.5 trillion is because tax rates were too low.  It is not.”

Wilson goes on to say, “The deficit has skyrocketed because spending has increased by more than $1 trillion since 2007.  The other $400 billion of the increase in the deficit was because of slower economic growth and millions of lost jobs, which decreased revenue. Tax rates are pretty much the same they were before the recession.”

If the objective of Geithner and the rest of the Obama Administration is to put America back on a path of fiscal sanity, why not tackle the spending issue?

“How is it possible that the only solution the Obama Administration has to fix our deficit is to raise taxes?  The current budget stands at $3.65 trillion.  Certainly there are cuts that can be made in the budget that wouldn’t involve government hands in our pockets,” ALG’s Wilson states.

It seems an impossible feat for Obama and his team to suggest anything other than raising taxes — which does nothing to solve the economic problems facing the nation.

Meanwhile, small businesses—the engine of the economy, Americans job creators — will again take a hit.  How high do the unemployment numbers need to get before Obama and his team realize jobs will not be created if you continue to price out their creators?

Rebekah Rast is a contributing editor to Americans for Limited Government (ALG).  You can follower her on twitter at @RebekahRast.

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