Will Target Dems Support Obama's Small Business Tax Hike?

Washington– With Washington Democrats talking about slamming small businesses once again with job-killing tax hikes, Jerry McNerney will be called on once again by his party leaders to help them guide their unpopular agenda through Congress. With small businesses unable to grow and create jobs thanks to the uncertainty created by the Democrats’ destructive big-government agenda, these massive tax hikes would only further set back economic recovery.

“After burying California taxpayers under a mountain of reckless government spending and record-high debt, it looks like Jerry McNerney could once again push through a job killing tax hike that would devastate the economy,” said NRCC Communications Director Ken Spain. “Small businesses are looking for some much-needed relief, but all they’re getting from Washington is the uncertainty that comes from the Democrats’ harmful agenda. If McNerney can’t finally stand up against the Democrats’ tax-hiking agenda, it will prove once and for all that he’s forgotten about the California businesses and families he’s supposed to represent.”

Ben Bernanke, the nation’s chief economist, argued that eliminating the Democrats’ scheduled tax hikes would go a long way toward bolstering the economy:

“Federal Reserve Chairman Ben S. Bernanke said extending at least some of the tax cuts set to expire this year would help strengthen a U.S. economy still in need of stimulus and urged offsetting the move with increased revenue or lower spending.

“‘In the short term I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy,’ Bernanke said yesterday under questioning from the House Financial Services Committee’s senior Republican.” (Scott Lanman and Ryan Donmoyer, “Bernanke Says Tax-Cut Extension Maintains Stimulus,” Bloomberg, July 23, 2010)

But President Obama and Democrat leaders are content to slam small businesses even harder with a new round of tax increases:

“Democratic leaders, including Mr. Obama, say they are intent on letting the tax cuts for the wealthy expire as scheduled at the end of this year. But they have pledged to continue the lower tax rates for individuals earning less than $200,000 and families earning less than $250,000 — what Democrats call the middle class.” (David Herszenhorn, “Next Big Battle in Washington: Bush’s Tax Cuts,” New York Times, 7/24/10)

According to the Wall Street Journal, these tax hikes will hit small businesses the hardest:

“The reality is that the increase in the top marginal income tax rate to higher than 41% will hit the most profitable small businesses especially hard. That’s because millions of business owners pay individual rates under Subchapter S of the tax code. Today, this means they pay the same top rate as the Fortune 500: 35%. But if the 2003 tax rates expire, they’ll suddenly pay more than Goldman Sachs.” (Wall Street Journal, “Liberal Tax Revolt,” 7/23/10)

Will Jerry McNerney prevent these tax hikes or cave to his Democrat leaders once again?