No president, no member of Congress or the U. S. Senate, no governor, and no member of state legislatures can create private sector jobs.\u00a0 Government programs may help or hinder businesses, but they all require government employees to administer them.\u00a0 Government jobs cost taxpayers money while private sector jobs generate tax revenue for government.<\/p>\n
Data from the Federal Small Business Administration (SBA) shows that 99.9% of all businesses are small businesses and that 80% of all jobs are created by small businesses. About 99% of all manufacturers are small and medium-sized companies, employing more than nine million workers.\u00a0 Since the recession began at the end of 2007, these companies have lost more than 850,000 jobs, which is 42% of the total jobs lost in the goods-producing sector.<\/p>\n
The question is if we are in a recovery, even though weak, why aren\u2019t businesses creating jobs?\u00a0 The number one reason businesses aren\u2019t expanding and hiring more people is that they are afraid.\u00a0 They are afraid the weak recovery won\u2019t last and we will have a \u201cdouble dip\u201d recession.\u00a0 They are afraid of the increase in taxes when the Bush tax cuts sunset at the end of the year.\u00a0 They are afraid of the cost to their businesses to comply with the Obama health care program.\u00a0\u00a0 They are afraid of the effect on the economy of the escalating national debt.\u00a0 They are afraid of the possibility of Kerry-Lieberman cap-and-trade legislation passing Congress and being signed into law.\u00a0 Even though the latter looks unlikely to pass this year, it could be revived in the next session just as the Obama health care bill was revived and passed earlier this year after seeming dead at the end of last year.<\/p>\n
While the business outlook for manufactures improved for the fifth consecutive quarter according to the latest Manufacturing Index by the National Association of Manufacturers (NAM) and Industry Week, 58% of respondents said that uncertainty about the business outlook was delaying both their company\u2019s plans to expand employment and their capital spending.\u00a0 An additional 8% said it was delaying plans to expand employment and another 8% said it was delaying plans to expand capital spending.<\/p>\n
After the Bush tax cuts sunset on December 31, 2010, individual tax rates will increase to nearly 40%.\u00a0 About 68% of all manufacturers are organized as S-corporations or sole proprietorships that are taxed at the individual rate.\u00a0 Increasing taxes would deal a painful blow to small businesses recovering from the economic recession.\u00a0 According to NAM\u2019s economic models, manufacturers would lose an additional 238,000 jobs by 2019 if these tax increases were enacted.<\/p>\n
On January 1, 2011, the capital gains tax will jump up 33% – to 20% from 15%, and the tax on dividends will go up 164% – from 15% to 39.6%.\u00a0 The death tax will go up from a tax rate of zero this year to a rate of 55% on estates of one million dollars or more.\u00a0 This can have a devastating effect on the ability of small family-owned businesses to continue after the principal owner dies.\u00a0 This exorbitant tax can force survivors to sell the business in order to pay the estate taxes and thus lose their family\u2019s livelihood.<\/p>\n
Many other tax cuts from the Bush administration will disappear, and a new set of tax hikes will appear, such as the elimination of the research and development tax credit and widening the application of the Alternative Minimum Tax so that more individuals pay it.\u00a0 According to the Association for Tax Reform there will \u201cliterally be scores of tax hikes on businesses that will take place.\u00a0 The Congressional Budget Office estimates that the expiration of the Bush tax cuts will cost taxpayers $115 billion next year alone and $2.6 trillion through 2020.<\/p>\n
As reported in the July 23, 2010 Wall Street Journal, \u201cFederal Reserve Chairman Ben Bernanke told lawmakers Thursday that the U. S. \u2018should maintain or stimulus in the short term.\u2019\u00a0 Extending the Bush tax cuts \u2018is one way\u2019 way of doing that, he said.\u201d\u00a0\u00a0 The article also reported, \u201cpressure is growing on the administration from a small number of Democratic lawmakers to extend all the Bush cuts, which include taxes on investment income and capital gains.\u201d<\/p>\n
A study conducted by Science Applications International Corporation (SAIC) for the American Council for Capital Formation and the Small Business and Entrepreneurship Council assessed the impact of the proposed Kerry-Lieberman cap-and-trade bill on manufacturers jobs, energy prices, and the overall U. S. economy.\u00a0 The analysis concluded that as many as 1.9 million jobs would be lost and the cumulative loss to the U. S. Gross Domestic Product (GDP) would be up to $2.1 trillion.\u00a0\u00a0\u00a0 Residential electricity price would increase up to 42% and gasoline prices per gallon would go up 18%.\u00a0 SBE Council President and CEO, Karen Kerrigan said, \u201cSmall business owners cannot create more jobs when costly policies such as Kerry-Lieberman take more of their hard-earned resources.\u201d<\/p>\n
As long as the current administration views businesses as \u201cthe rich\u201d that need to pay higher taxes, it will be difficult to create the jobs we need to reduce unemployment and foster real economic recovery.\u00a0 Businesses are employers that provide jobs.\u00a0 We don\u2019t have an agricultural economy like we did in the Great Depression.\u00a0 People can\u2019t go back to living off farms when they lose their manufacturing jobs.\u00a0 We need to help businesses succeed and grow, not put burdens on businesses in the form of tax increases and other onerous laws and regulations.<\/p>\n","protected":false},"excerpt":{"rendered":"
No president, no member of Congress or the U. S. Senate, no governor, and no member of state legislatures can create private sector jobs.\u00a0 Government programs may help or hinder businesses, but they all require government employees to administer them.\u00a0 Government jobs cost taxpayers money while private sector jobs generate tax revenue for government. Data […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-58","post","type-post","status-publish","format-standard","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/58","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/comments?post=58"}],"version-history":[{"count":3,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/58\/revisions"}],"predecessor-version":[{"id":61,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/58\/revisions\/61"}],"wp:attachment":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/media?parent=58"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/categories?post=58"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/tags?post=58"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}