"Geithner...argued that if the administration did not extract a trillion dollars in new revenue from its plan to increase taxes on people earning more than $250,000, including small businesses, the government would in effect “finance” what he called a “tax benefit” for those people."...
6/23/11, "Geithner: Taxes on ‘Small Business’ Must Rise So Government Doesn’t ‘Shrink’," CNS News, Terence P. Jeffrey
"Treasury Secretary Timothy Geithner told the House Small Business Committee on Wednesday that the Obama administration believes taxes on small business must increase so the administration does not have to
- “shrink the overall size of
- government programs.”
The administration’s plan to raise the tax rate on small businesses is part of its plan to raise taxes on all Americans who make more than $250,000 per year—including businesses that file taxes the same way individuals and families do.
Geithner’s explanation of the administration's small-business tax plan came in an exchange with first-term Rep. Renee Ellmers (R.-N.C.). Ellmers, a nurse, decided to run for the U.S. House of Representatives in 2010 after she became active in the grass-roots opposition to President Barack Obama’s proposed health-care reform plan in 2009.
“Overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring,” Ellmers told Geithner. “They just simply cannot.”
She then challenged Geithner on the administration’s tax plan.
“Looking into the future, you are supporting the idea of taxation, increasing taxes on those who make $250,000 or more. Those are our business owners,” said Ellmers.
Geithner initially responded by saying that the administration’s planned tax increase would hit “three percent of your small businesses.”
Ellmers then said: “Sixty-four percent of jobs that are created in this country are for small business.”
Geithner conceded the point, but then suggested the administration’s planned tax increase on small businesses would be “good for growth.”...
Geithner, continuing, argued that if the administration did not extract a trillion dollars in new revenue from its plan to increase taxes on people earning more than $250,000, including small businesses, the government would in effect “finance” what he called a “tax benefit” for those people....
“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 Geithner....
When Ellmers finally told Geithner that “the point is we need jobs,” he responded that the 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....
Meanwhile, according to the National Center for Educational Statistics, although federal education spending in inflation-adjusted dollars has jumped from $71.64 billion in 1995—when Bill Clinton was president--to $163.07 billion in 2009—when Barack Obama was president—federal spending still accounted for only 8.2 percent of spending for public primary and secondary education in America in the 2007-2008 school year. Historically and
- presently in the United States,
- local and state governments have funded the cost of public education."
6/14/11, "US Small Business Sentiment Dims: NFIB Survey," Reuters, CNBC
"Small business sentiment in the United States fell for a third straight month in May, landing squarely in recessionary territory due to consumer reticence, high unemployment, and inflation worries, according to a monthly survey released on Tuesday.
"The most apparent reason for the weak optimism is the weak recovery," the National Federation of Independent Business, a trade group, said in its May report.
Consumer spending is weak, especially for services, an area in which small business plays a major role, the NFIB said. It cited weak job market indicators and
- investment plans that are at recessionary levels.
"Only the big banks and the big manufacturers are winning," the NFIB said. "Earnings trends for small business are distressingly negative and the recovery is two years old."...
Rising prices contributed to the gloom, with one in 10 businesses citing it as their most pressing business problem. "...
via Drudge Report
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