Cantor’s Small-Business Drive
House leader wants tax and regulatory relief to turbocharge economy
The Washington Times
February 21, 2012
Small business has taken a beating in this brutal economy. Combine the developed world's highest corporate tax rate with the constant stream of new regulation flowing from the Obama administration, and it's no wonder the economy is stalled. House Majority Leader Eric Cantor wants to provide some relief so the backbone of our economy can start hiring and investing again.
"It's really important that we get serious about job growth in this country, and helping small business is the number one way to do that," Mr. Cantor told The Washington Times in an interview. The Virginia Republican is drafting legislation that would allow companies with 500 or fewer employees to take a deduction equal to 20 percent of their income before paying the standard tax rates on the remainder. The deduction would also be available to firms that file as individuals, as most small companies do. Mr. Cantor is planning a floor vote near Tax Day.
This relief measure contrasts sharply with President Obama's call to hike rates on those who make over $200,000 so he can pile on the spending. "The president has consistently taken a position that he wants to increase taxes on small business people. And we know the numbers - 50 percent of those impacted by his proposal for higher taxes are small-business people," Mr. Cantor said. "If we want to create jobs, we shouldn't be taxing small-business men and women, we should be helping them."
With tax rates set to go up at the end of the year, uncertainty over tax bills and regulations has stalled small-business decisions. According to a recent Gallup poll, only 1 in 5 small-business owners plans to add employees this year. Worse, of the few who plan to hire, an overwhelming 72 percent will only add temporary or part-time positions. When businessmen anticipate their tax liability is going to go up, they start stockpiling cash to pay the Internal Revenue Service instead expanding.
In the coming weeks, Mr. Cantor will also bring to the floor a package of bills easing access to capital for startups. Thanks to Sarbanes-Oxley red tape, the cost of a company going public has shot up to $2.5 million - beyond the reach of many small businesses.
The House bill includes a measure to provide an "IPO on-ramp" by easing Securities and Exchange Commission (SEC) regulatory requirements for five years or unless the company is worth $1 billion. It would also lift SEC restrictions against small business use of "crowdfunding," which refers to raising capital from a large pool of small investors. Though Mr. Obama and House Democrats support the measures, the Senate has failed to act.
Mr. Cantor said he's hopeful that Senate Majority Leader Harry Reid, Nevada Democrat, will schedule a vote in the upper chamber for both bills. "It's up to Harry Reid whether he's going to be an obstructionist or actually join the bipartisan effort to help small businesses," said the House leader. To help create jobs and boost all our finances, any tax and regulation barriers stalling small-business growth must be removed.