Economy Alarm: Dems’ Tax Increase Would Force Already Suffering Small Businesses to Shed More Jobs
Obama’s Job-Killing Policies Will Further Punish Small Firms, “the Backbone of the American Economy”
President Obama: “Small Businesses Are the Backbone of the American Economy”
“Our nation’s small businesses are the backbone of the American economy and the main drivers of private job creation, and today’s approval of our Small Business Lending Fund and State Small Business Credit Initiative marks a new and significant step toward getting small businesses the financing they need to start up, expand, and hire more workers.” (“Statement by President Obama on House Passage of the Small Business Lending Fund and Small Business Credit Initiative,” whitehouse.gov, 6/17/2010)
Credibility Crash: Small Businesses Account For Bulk of Job Losses
The bulk of job losses at the end of last year were concentrated in the smallest firms, underscoring how small businesses are lagging in the economic recovery.
Businesses with fewer than 50 employees accounted for 61.8% of all job cuts in the private sector in the fourth quarter, the Labor Department reported Wednesday, while they created 54.1% of new jobs. Small companies employ roughly 29% of all workers.
The numbers represent a reversal of the situation a year earlier, when small businesses made up a larger share of jobs added than jobs lost. Small firms made up half of all jobs lost at the end of 2008 but also accounted for 53.9% of job gains.
“Although small businesses account for a large share of gross hiring activity, they also account for a large share of gross firing activity. There is a huge amount of churn in the small-business labor market,” says Zach Pandl, an analyst for Nomura Securities.
Many economists believe the recession had ended by the fourth quarter of 2009, and the job market has slowly begun to improve. But small businesses have lagged, in part because access to credit is still tight.
Taken together, firms of all sizes cut a net 200,000 jobs in the fourth quarter, adding 6.6 million jobs and shedding 6.8 million. That represents progress from a year earlier, when firms shed a net 1.8 million jobs. (Sara Murray, “Small Firms See Bulk of Job Losses,” Wall Street Journal, 8/18/2010)
Democrats’ Proposed Tax Hike Would Further Punish Small Businesses, the “Backbone of the American Economy”
Republicans accuse Democrats of plotting one of the biggest tax hikes in American history, arguing that raising taxes on wealthy households would punish the very people capable of creating jobs, spurring economic growth and reducing the 9.5 percent unemployment rate. About half of all small-business income is reported on the individual returns of people making over $250,000 a year, according to the taxation committee’s data… (Lori Montgomery, “GOP plan to extend tax cuts for rich adds $36 billion to deficit, panel finds,” Washington Post, 8/12/2010)