Small businesses have created about two of every three net new jobs in the U.S. since the early 1970s, yet they are currently under assault in Washington as a misguided Congress seeks to raise their taxes during these difficult economic times.
Last Friday, I held a listening session with small business owners from across the Third District to discuss the best way to create jobs. (You can read about the story HERE). During the event, I heard directly from over a dozen small business owners and employees about the various challenges they are facing when it comes to growing jobs and investing in their business.
• Mike Sowada, who owns VISI Incorporated in Eden Prairie, noted that taxes are hindering his growth, and that access to capital has become difficult. These factors contributed to his business recently being forced to delay a multi-million dollar project.
• Steve Wise, of Cass Screw Machine Products in Brooklyn Park, raised concerns over the tax structure, which penalizes a business that desires to save profits for a rainy day.
• Paul Robinson, who owns Sterling Critical Products in Bloomington, said the current credit markets are hindering growth, noting that if he had the ability to purchase the technology requested by current and prospective customers, he could likely double his workforce by the end of this year.
While we covered many additional issues during the discussion, there was one consistent theme: small businesses need help. Unfortunately, the recently-passed budget pours salt in the wound by raising taxes by over $1 trillion – largely on the backs of small business.
Rather than tax small businesses even more, I believe we must encourage them to reinvest in their business so they can create more jobs. To meet that need, I am currently working on three different proposals that would directly help small businesses grow and create jobs.
The first bill, called the RELIEF Act, would create a six-month payroll tax holiday for employers and employees of small businesses with 50 or fewer workers. Along with allowing workers to keep more of their hard-earned money, this bill will give small businesses more money to retain employees and grow during these difficult economic times.
I am also introducing legislation that will allow small businesses to defer income tax on any money that is reinvested in their business. This would provide additional incentives and resources for small business owners to maintain and grow their companies during these difficult economic times.
Finally, I am also working with Senator Mike Enzi from Wyoming on a proposal to reexamine the classification of business income so that is taxed at an appropriate rate. While the details of this bill are still being worked out, this concept would be similar to how we deal with capital gains and would ultimately provide greater opportunity for small businesses to grow.
Small business is the engine of economic growth in this country and it is time Congress makes it easier, not harder, for them to create jobs and help lead us out of this recession.
Business participating in the small business roundtable were: VISI Incorporated of Eden Prairie, Sterling Critical Products of Bloomington, Precision Gasket Company of Edina, Inspire Medical of Brooklyn Park, Hickey & Associates of Plymouth, WSB & Associates of Minneapolis, Cass Screw Machine Products of Brooklyn Park, Daniel k. Duffy Architects of Minnetonka, The Williston Group of Minnetonka, Bergerson-Caswell of Maple Plain, Gary R. Aiken Investors Capital of Minnetonka, and iBusiness Solutions of Edina.