President Obama Would Raise Taxes on Successful Small Employers by $442 Billion
In his talks with corporate CEOs and Congress, President Obama has taken a position to veto any plan that does not raise income tax rates on successful small employers and high-income families. The President has pushed his agenda of raising taxes through the guise of fairness and paying one’s share; however, his plan contradicts its purpose by putting a disproportionate amount of the tax burden on small employers and high-income families.
Under President’s plan, the top two marginal income tax rates paid by small employers would rise from 33 percent and 35 percent to 36 percent and 39.6 percent, respectively. If the President succeeds in his efforts, it will result in a $442 billion tax hike over the next decade, a figure reached by the Tax Policy Center. Furthermore, when the $442 billion tax increase is combined with the remaining tax hikes in the President's plan, the average tax increase for small employers and families making above $250,000 is $14,173.
According to an Ernst & Young study, nearly 20 percent of workers in the private sector are employed by a small employer who would be affected by the President’s plan. In light of this, the Ernst & Young study projected that the President’s plan of raising the top two rates would have an adverse effect on the economy by resulting in 700,000 lost jobs.
The lost jobs combined with economic volatility would undoubtedly have a very negative effect on the economy. If Obama wants to increase economic prosperity by helping America’s job creators, then he needs to insure that tax rates will not go up on successful small employers.