There is a lot of talk in our nation’s capitol about job creation.  The President held a “jobs” summit last week.  It is clear that more needs to be done to create more jobs in the country – but if you think the answer to our economic woes will be solved by folks in Washington, DC, think again.

For all their talk of creating jobs, the Administration and Congress has done little for our small businesses – those who are actually in a position to create jobs.  More government spending doesn’t result in more jobs, just look at the so-called stimulus bill that was passed earlier this year.

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The estate tax was debated on Capitol Hill last week and the NCPA had a front row seat.  The House Small Business Committee held a hearing “Small Businesses and the Estate Tax: Identifying Reforms to Meet the Needs of Small Firms and Family Farmers” where I testified about the need to eliminate the estate tax because it is:

• ANTI-family- Does not allow parents to pass their hard work and wealth on to their children
• ANTI-farm- Farms are especially vulnerable because they hold vast amounts of land which are subject to the estate tax as they are passed from generation to generation
• ANTI-small business- Hurts small businesses that don’t enjoy the same tax shelters and benefits as large corporations

Small business owners and family farmers have large investments in infrastructure and many don’t have the large capital assets they need to pay the tax, and many times are forced to sell the business just to meet their financial obligations. 

Our small businesses are struggling.  They are struggling to keep their doors open, their employees paid and access to capital flowing.  They don’t need any more taxes – not now and not when they die.   What do you think?

In an attempt to stem the spending spree that has taken place this year, the Congressional Budget Office (CBO) has put forward a set of recommendations to balance the federal budget.  

Unfortunately some of the people that will take the biggest hit are working families and small business owners.

Just a few of the CBO's recommendations:

• Increase the individual income tax rates.
• Eliminate tax subsidies for child care.
• Eliminate or limit eligibility for the child tax credit.
• Require self-employed and employees to pay the same amounts in payroll taxes.

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What will it be?  A federal soda pop tax? Taxing some health insurance benefits?  Higher fees on beer, wine and hard liquor?  These are just some of the options being tossed around in the Senate.

How do we pay for expanding coverage to over 40 million uninsured people?  The Senate Finance Committee recently released 40 pages of revenue raising options.  They include cuts to providers and new taxes.   

The Finance Committee report says, "Many proposals expected to reduce health spending in the long run may not produce sufficient savings in the short run to finance reform.  Other proposals to generate revenue for health care reform could include taxes that affect lifestyle choices and taxes that generally target loopholes.

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The estate tax is double taxation at its worst!  How dare we work all our life, many of us taking risks and building businesses and face the possibility that the business we built could face closure or a sale off to pay the estate tax when we are gone from this world!  Family owned businesses create over 60% of all new jobs in this country according to the Small Business Administration.  These businesses support charitable causes in the communities where they operate.  They provide patient, nearly perpetual capital for the businesses they conduct ensuring continuity and stability to the businesses stakeholders.  Women and minority business owners in most cases are first generation business owners.  Many of them are just now thinking about the future of their businesses when they retire.  Will they sell the business?  Will they bring in a family member to run the business?  The list of questions goes on.              

President Bush's 2001 tax act gradually raises the value of estates that are exempt from the tax while simultaneously lowering the estate tax rate until the tax is eliminated in 2010. Prior to the act, estates were taxed up to 55 percent on inherited assets above $1 million, or $2 million for married couples. In 2009 the rate would be 45 percent for assets above $3.5 million, or $7 million for married couples.

Without congressional action, the tax would revert to 2001 levels in 2011, and Bush Read the rest of this entry »

Much of the news on the TV talk shows lately has been about "Joe the Plumber" and former Secretary of State Colin Powell's endorsement of Sen. Obama for president.  Gen. Powell's sentiments and those of 7 other former Secretaries of State, all of whom endorsed Sen. McCain, is politics, and something for the political arena, not a think tank blog post.  I'm more focused on the implications of the Joe the Plumber "phenomenon" on public policy.  Let others decide how much weight to give that politically. 

In response to the August 14 editorial, "Obama's War on Women," there are many flaws in Sen. Obama's plans, which include changes that worsen the situation in New York where, as you point out, the nominal tax rate on some two-income families could move beyond 54%.

Women make up more than half the national electorate. Women will be watching to see where the two leading presidential candidates stand on issues that effect their earning power, and their families' economic status. Marriage penalties hurt working women and hurt the economy. Existing tax laws, and Obama's "new" plan, favor single-income households and punish dual-income couples. The second earner has little incentive to work because she keeps so little of her earnings. Read the rest of this entry »

This article was published, as follow up in response to an article that was published on Aug. 14th.  See previous blog post for full print article.  Please post your comments and share your thoughts on this response.

Obama's War on Women, II

"Absolutely outrageous" is how Senator Obama's economic adviser, Jason Furman, described our editorial of Thursday, "Obama's War on Women," about the effect the Democrat's tax plan would have in penalizing highly educated married women who work outside the home. Mr. Furman was asked about it (not by us) in a conference call of the national press corps. Read the rest of this entry »