Andrew Malcolm over at Investors Business Daily points to the new numbers for the Small Business Optimism Index which, for the month of June, has suffered the biggest one-month drop in two years, as Barack Obama reignites his calls to increase their taxes.
Obama on Monday proposed extending tax cuts, for one year, on families making less than $250,000, while arguing that people making more than that should see higher taxes.
Republicans and business groups said that would hit many small business owners. Obama claimed that 97% would be exempt, which is why he said he's not targeting "job creators".
It's true that about 80% of small firms are one-man or -woman operations with no employees. But firms that start tiny tend to stay that way. Startups that develop into big "job creators" tend to have several employees from day one. But those are firms are more likely to have income above $250,000. Higher taxes on such businesses would exacerbate a key but little-known weakness of the anemic recovery: The number and size of startups plunged during the recession and haven't recovered.
As for Obama's small business tax cuts, those often are less impressive in reality than on paper.
ObamaCare includes tax credits to help small firms offer health insurance for employees. The administration's Council of Economic Advisers thought 4 million would use them. But just 170,000 small businesses took advantage in 2010, IRS figures show, according to a recent study by the nonpartisan Government Accountability Office. The reason: The credit was too small and too complex for small business owners.
Read the entire piece.
Raising taxes on business owners, on top of the 20 tax increases already signed into law under Obama with Obamacare, is why small business optimism continues to drop.
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