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  • Higher Taxes for Small Business Are Not Acceptable

    We’ve written numerous times before about the harmful effects that new energy taxes would have on Hoosier businesses.

    Karen Kerrigan, president & CEO of the Small Business & Entrepreneurship Council, wrote a great article on this topic which recently appeared in Roll Call:

    Strong U.S. economic growth is achieved through robust investment. A thriving and growing small-business sector — one that is creating jobs — is critical to a sustainable recovery. However, many small-business owners are immobilized. They are unwilling to hire, expand or invest because of frivolous government policies combined with weak economic conditions, which keeps them in a constant state of limbo.

    New findings from a Wells Fargo/Gallup Small Business Index survey released on Nov. 30 underscore the grave situation. The survey found that small business owners “expect to add fewer net new jobs over the next 12 months than at any time since the depths of the 2008-2009 recessions.” According to the survey, small businesses intend to reduce capital spending over the coming months. One in five small-business owners plans to decrease employment, while just 17 percent plan to increase their number of employees. This net negative employment outlook bodes ill for our economy next year.

    Congress is working against a hard deadline of Dec. 31 to reach an agreement on the fiscal cliff. They are looking at various approaches to increase new revenues, possibly targeting America’s energy sector. A letter to President Barack Obama and Speaker John A. Boehner signed by House Democrats emphasizes the need to get rid of tax deductions valuable to the growth of America’s energy industry. The fact of the matter is that small-business owners and consumers will ultimately pay for any rolling back of deductions or tax increases that Congress may impose on the energy industry. Furthermore, increased taxes on the U.S. energy industry would reduce U.S. investment and our competitiveness. New burdens on the energy industry would also shift jobs from the United States to friendlier tax regimes abroad.

    Obviously, gas prices have remained high in the United States for an extended period of time. These higher costs have weighed heavily on small businesses. Some politicians, however, are pushing to make the situation much worse. They are suggesting that current energy tax provisions be repealed, which would only drive costs higher for small businesses. These higher costs, or the threat thereof, do not foster an environment for risk-taking and hiring. The lame-duck Congress needs to advance measures that support small businesses and our overall economy. Helping to make energy more affordable and abundant is an important step to that end.

    Make no mistake, the burden of additional taxes on the oil and gas industry will be passed on to all consumers — from the gasoline we put in our vehicles to the fuel that powers our nation’s manufacturing and utility companies. Americans will be forced to dig even deeper into their pockets. For small businesses just barely making it, higher energy costs could be the straw that breaks their financial backs. In a recent survey by TechnoMetrica for the Small Businesses & Entrepreneurship Council, 43 percent of respondents said their business would not survive if energy prices remain high or increase further.

    Small-business owners want solutions and policies that will provide certainty and help them compete in the tough economic climate. Small businesses cannot be dynamic job creators and innovators if they do not have the capital and confidence required to grow and invest. A future of burdensome taxes and costs, including higher energy costs, means a future of pessimistic small-business owners. Washington needs leaders who will focus on pro-growth policies where all businesses can succeed.

    This post was tagged under: Dan Coats, Energy, Richard Lugar, Taxes

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