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  • Looming Tax Hikes Preventing Economic Recovery

    The danger of higher taxes in the future is thwarting economic recovery today. Businesses make investment and hiring decisions based on their expectations of future profitability. If they expect to be more profitable in the future they will hire. If they do not they hold back on expansion. They base their expectations of future returns on estimates of their sales and costs years down the line. Uncertainty in either makes predictions difficult and causes them to put off decisions until they have a better idea what their bottom line will be.

    Taxes are a major cost for businesses and all year President Obama and Congress have threatened to raise them. This has had an especially large impact for small business and created a large degree of uncertainty for them. According to the National Federation of Independent Business’ (NFIB) monthly survey of small and independent business owners:

    [A] major concern [for small businesses] is the level of uncertainty being created by government… The “turbulence” created when Congress is in session is often debilitating, this year being one of the worst. Themes includ[e] “tax more,” “tax the rich even more,” “VAT taxes,” higher energy costs due to Cap and Trade, mandates and taxes for health care…Uncertainly is the enemy of the real economy as well as financial markets.

    The constant threats of higher taxes emanating from Washington are paralyzing small businesses and keeping them from investing and hiring. In fact, 24 percent of them in the NFIB survey report that taxes are the second most important problem they face. That is significant increase from one year ago when only 17 percent of businesses identified taxes as their most important problem. The increase makes clear that the potential tax increases threatened by Congress and President Obama are posing a major problem for small businesses because of the uncertainty they are creating.

    Instead of spending billions more on a third sure-to-fail-stimulus, Congress and President Obama should take all tax hikes off the table for the foreseeable future – including the ones to pay for their take over of the health care system. Doing so would give small businesses the predictability they crave and help get the economy creating jobs again – all without spending a dime.

    Posted in Economics [slideshow_deploy]

    12 Responses to Looming Tax Hikes Preventing Economic Recovery

    1. Bobbie Jay says:

      Obama exploits the greedy of the big businesses, then he says they're too big to fail? So by stealing tax dollars, he buys them out! FAVORITISM!

      There is no need for cap n TRADE, as there is no MAN-MADE global warming. FRAUD!

      No need for government run health care, as the majority of all human beings, have been responsible for their own! PHONIES!

    2. Richard Sandve says:

      Taxes are going to help! NOT! Lets fire all of them and start our country over. This not a republic any more!Socialism is alive and well in our government!

    3. Tom /Georgia says:

      My New Year's prediction for 2010:

      I predict that an unprecedented number of the financial buzzards that were hatched beginning early in the 20th century will be coming home to roost in 2010 and will continue to arrive for several years, perhaps decades, thereafter.

      They are already circling on the horizon.

      Meanwhile, members of Congress as well as many members of most of our state legislatures are out tiptoeing through the tulips in Never-Never Land while they commune with Peter Pan and Tiny Tim.

      Come on back, folks. Planet Earth is still here.

      Political ideologies are mental perturbations that induce random chaotic impulses into rational thought processes.

    4. Skipper, Chiefland, says:

      I am in the title insurance business. You won't see this on FOX, CNN or the networks, but, another one of our Governments little "helpful" hands is the revamping of "RESPA". These new rules are so cumbersome and illogical that I predict a drastic (more than current) slow down of money being lent to home Buyers. Go onto HUD's website and just read the questions and answers and you will begin to see that a bunch of morons must have come up with these new rules. Once again, Washington is so out of touch with how the real world works. The best thing they can do is go home, stop trying to help and get of the damn way.

    5. Skipper, Chiefland, says:

      Someone needs to file a lawsuit against the Democrats in Congress and the Senate challenging the constitutionality of this health care bill. They do not have authority to "mandate" that I as an American citizen purchase health insurance, neither as a business owner do they have the authority to "mandate" me to provide health insurance for employees. This isn't about health of the people, its about transfer of wealth plain and simple. I mean, who actually wins in this grand plan, not the American people or the small business owner. We will simply pass these increased cost on to the employees by payroll deduction of loss of job or decreased work hours. Who do they think they are? This is a losing proposition for the United States of America. Capitalism, not Communisum or Socialiam. Tax all you want, it will be passed on to the working people, just watch and see.

    6. Lynn B. DeSpain says:

      It is not only the Federal tax hikes that are breaking the Nation's backbone, but the individual State's competing with the Feds to do the same. Not all the States, but several, as the one I live in, Oregon. We already have a 'Cap and Trade, that went into effect January 1st. We have two potentail tax measures that Will force the remaining industries, and the services businesses associated with them out of our State. Measure 67 taxes all Corporation on their 'Gross' earnings, before any deductions for materials, and labor, and shipping and other overhead. The second, Measure 66 will place an extra tax on all those earning over $250,00 in the same way. This will be the Sole owners of businessses, Parterships, Mom and Pops, etc., and there is no moe deductions for Federal Taxes paid.

      I am quite sure that there are other States like Oregon out there, just as I am sure that there are many more that are not! Oregon just passed a new Law that the Polic can enter Private Property without a Warrant, and issue tickets for not wearing Seat Belts! Sounds innocuos, but it is against both the Federal Constitution and Oregon's Constitution.

      We, the Citizens, can no lnger sit back and trust the elected at their word to represent our best interest. Unless all those elected remain within the Laws set forth in our Constitutions, our Constitutions are meaningless, and so are we.

    7. fran campbell boca says:


    8. Hilary - USA says:

      The alternative to taxing the rich is letting poor people starve to death. I suppose that would be alright with you.

    9. Bobbie Jay says:

      Hilary, you are in the majority of society's conditioned thinking. If you could think freely, you would know there are other alternatives that actually build individual, self worth! Government doesn't build self worth. They build dependency.

      Widen your thoughts, think with your ability to think freely. Be careful not to repeat the words of the conditioned minds. You're human! You can do it!

    10. Brenda, Arizona says:

      Hilary, what is with you dems. You guys always think there is only one way to do things. Your way or the highway. Do you know that almost half of the taxes paid now are the rich??? How much more tax do you think they will pay before saying screw you I am out of here??? I am not rich by any means but I do believe that if they earn it they should be able to keep it. I don't believe in starving the poor hence welfare. I have a nephew that is perfectly capable of working. The problem is he is very lazy and does not want to work for a living so he thinks it is ok for others to support him. It is not about taxing the rich or starving the poor it is about Obama and his cronies spending waaaaay too much money that is not necessary.

    11. Beverly Martin says:

      It is time for the FairTax to have a hearing. The FairTax would bring trillions of dollars back from overseas accounts and put those investment dollars to work in our economy. By eliminating the personal and corporate income tax and using a sales tax on personal consumption of new goods and services, we would become the most attractive business location in world competition. The FairTax stops political corruption of buying votes and campaign dollars in exchange for tax breaks since there would be no exemptions. Only services and new goods would be taxed.Let American workers and corporations keep the money earned through work and investment. That money can be used to buy homes, save for college, reinvest into businesses and grow jobs. All research supports a sales tax over an income tax as the means for funding government. Visit http://www.fairtax.org to learn more.

    12. Pingback: One Year Later: Obama’s Economic Hopes Are a Year Late and $13 Trillion Short | Conservative Principles Now

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