The populist talking points keep repeating themselves: No tax cuts for “the wealthy.”
The reality is that allowing the current tax rates to return to their pre-2001 levels will mean a major tax increase on many small businesses and manufacturers. From our ManuFacts sheet on the tax rates.
- About 73 percent of all manufacturers are organized as S-corporations or other entities taxed at the individual rate.
- Small and medium-sized manufacturers employ more than 9 million workers. Since 2007, these companies have lost more than 850,000 jobs – 42 percent of the total jobs lost in the goods-producing sector.
- The Administration’s proposed 2010 budget blueprint would increase individual tax rates to nearly 40 percent.
- Increasing taxes would deal a painful blow to small businesses recovering from the economic downturn and facing higher energy costs.
- Manufacturers will lose an additional 238,000 jobs by 2019 if these tax increases are enacted, according to the NAM’s economic models.
- In a March 2010 survey of small and medium-sized manufacturing firms, 86 percent said they were concerned about the expiring tax rates – of those, 62 percent said they were very concerned.
As for taxes generally and business taxes especially, here’s a letter the National Association of Manufacturers and other major business trade associations sent to Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, on Friday, Nov. 12. Excerpt:
During this time of widespread economic uncertainty, proposals to increase taxes on U.S. companies – including small businesses, domestic companies, worldwide American companies and U.S. subsidiaries of companies headquartered abroad – could have significant negative repercussions for the struggling American economy. Given the urgent need for new private sector jobs, adding to the tax
burden would only undermine vital economic recovery efforts now under way throughout the country.
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