Biden Proposal Will Mug Small Businesses & Working Families
Recent press reports suggest Sen. Joseph Biden (D-Del.) will introduce an amendment to increase taxes on "wealthy" Americans to "pay for" the Iraq War supplemental. Biden is claiming this proposal is a tax increase on the rich, but since more than two-thirds of top bracket filers are small business owners, he is really proposing to increase taxes on small businesses, the working families employed by these small businesses and future job creation .
Small businesses will be the key to the nation\’s economic recovery:
- Small businesses account for 75 percent of the net new jobs added to the economy
- More than 98% of American companies have fewer than 100 employees.
- These companies account for 36% of all employment.
- The number of self-employed workers has increased by 500,000 in the past three months
- Proprietors\’ income, a proxy for small business, is up 16 percent annually for the same three-month period, thus setting the stage for new employment growth.
So what will happen if Biden is successful in raising the income tax by more than 10%? According to researchers at the National Bureau of Economic Research, such a tax hike will:
- Reduce the likelihood of small business hiring by about 10.7%
- Reduce median wages paid by small businesses by between 3 and 4%
- Reduce small business gross receipts by about 7.7%
The proposed tax hike on the "wealthy" is actually a tax hike on small business owners, the working families employed by those businesses, and future job creation. Biden\’s proposal will increase unemployment, decrease wages, and inhibit economic growth.