On Thursday, Raymond Cravaack (R-MN-08) spoke passionately on the House floor in support of H.R. 9, the Small Business Tax Cuts Act … specifically mentioning the complexity of the tax code and the tax burden on small business. Here are the highlights :
American small businesses now spend between 1.7 billion and 1.8 billion hours on tax compliance, with a total estimated cost of between $15- to $16 billion annually. This wasted time and effort would be better invested in creating jobs and manufacturing products instead of handing over hard-earned capital to the government.
In the Eighth District, 8 out of 10 jobs are due to small businesses. When I return home, I repeatedly listen to the same concerns from small business people in the Eighth District. My constituents are hesitant to expand their businesses as a result of deficient access to capital, complex legal burdens, and Tax Code uncertainty.
The Small Business Tax Cut Act immediately creates access to capital by allowing productive employers to reinvest more of their hard-earned money into their businesses.
Several small business owners that I have personally spoken with in my district have already expressed strong support for this proposal. This includes businesses like RC Fabricators in Hibbing, Minnesota, which manufactures precision steel and aluminum construction equipment; Extreme Equipment Repairs in Harris, Minnesota, which specializes in large transport truck repair; and the London Road Rental Center in Duluth, Minnesota, which provides all kinds of equipment and party rentals for the Duluth area.
For example, because of the recent success in northern Minnesota’s mining and paper industries, RC Fabricators has been looking for ways to expand, but high taxes have prevented them from accumulating enough capital to grow. This bill will ease that tax burden and allow them to update machinery, hire workers, and provide high-quality products. These kinds of stories are repeated throughout the country, and this legislation will help them.
Madam Speaker, H.R. 9 is a commonsense, pro-growth bill that will provide immediate assistance to employers and American workers as we labor to jump-start our economy and ease the burden felt by small businesses and American families.
Congratulations, Mr. Cravaack, you have successfully cited three businesses and inferred that all small businesses are the same … without mentioning that the legislation, according to an analysis of the Tax Policy Center determined that approximately 49 percent of the benefits of H.R. 9 would go to 0.3 percent of people with incomes exceeding $1 million in 2012–each receiving an average tax cut of more than $44,000.
Sure, there are a lot of “small businesses” that Representative Cravaack’s legislation could help including some that our Founding Fathers probably never imagined would be protected when they wrote the First Amendment – LFP Inc. (which also does business as Larry Flynt Publications) which operates in the adult entertainment industry and is best known for Hustler Magazine … employment level – 117 employees. Gosh, with all the concern over Planned Parenthood funding, why would House Republicans want to give tax cuts to strip clubs … but they did.
Or, the Super Bowl Champion New York Giants which has about 210 employees and made $1.3 billion last year, would get a tax cut
Or, Oprah Winfrey, a billionaire, would get a big tax cut, because her production company employs about 400 people.
Or, any of the Washington lobbying firms with no more than 499 lawyers and although they generating millions, they will still qualify for this tax cut.
Or, how about the accountants that will be hired to decipher the new tax forms that the IRS will have to produce in order so that Rick Christenson, owner of RC Fabricators in Hibbing, can claim that tax credit … yes, those accountants will get a tax cut too.
This was not lost on Tom McClintock (R-CA-04) after voting against Mr. Cravaack’s legislation, said :
Mr. Speaker, the House just passed H.R. 9, purporting to give a temporary tax cut to small businesses. I say “purporting” because it doesn’t cut spending at the same time, and thus it merely shifts current taxes into the future. Once a dollar has been spent, it has already become a tax, taken either from today or from tomorrow to pay off deficits.
Nor does H.R. 9 do much to promote economic growth because it does little to reward new productivity at the margin. At best, it produces a 1-year sugar high until the bills come due.
Tax cuts without either spending reductions or real economic growth are an illusion.
Real tax reform would permanently reduce the marginal tax rate for all businesses and cut government spending concurrently. This would encourage and reward growth, shift investment decisions from politicians to entrepreneurs, and not rob our economy of its future. I hope before the end of this session that we will do so.
Ouch … a 1-year sugar high until the bills come due. Yes, it’s a ONE YEAR tax cut … at a cost of $45.95Billion … and for that one year, the estimated number of jobs created would be 39,000 … OUCH … that is an expensive proposal … and anyone who feels they are TaxEnoughAlready must question why Mr. Cravaack would support it.
Congressman McClintock recognizes that a tax cut without offsetting spending cuts or revenue increases causes more problems.
Simply, it’s just too broad of a proposal. A gimmick.
There is no guarantee that any business — Larry Flynt’s or Rick Christenson’s will invest … they could just take the tax savings in retained earnings. Heck, even those businesses that want to invest do not have to do it here … Businesses that cut jobs in the U.S. and expand overseas could get the benefit of H.R. 9.
Sadly, Mr. Cravaack had a chance to vote on a targeted proposal … one that has had bi-partisan support in the past, and has worked – an increase in bonus depreciation available only to businesses that make investments in depreciable property. As a result, the benefit from the bonus depreciation provision will flow to businesses such as manufacturers that make significant investments in property, plant, and equipment. These are the types of businesses that create good jobs here in our country. Bonus depreciation would create demand for businesses such as the three cited by Mr. Cravaack.
Mr. Cravaack voted against that proposal.
Fiscal conservatives and TEA Partiers are not fools … it’s election season and Mr. Cravaack is trying an old ploy … acting as a magician masquerading an unfunded ONE YEAR tax cut as commonsense legislation that will benefit small businesses … as Representative McClintock properly called it … it’s just an illusion … an expensive trick that the taxpayers cannot afford.
Commonsense tells us that Mr. Cravaack’s legislation is too expensive, too shortsighted, and increases the debt.