The Leader's Ledger

Posted by Megan Whittemore on

Good Morning –

A new NFIB survey out today shows small business optimism plummeted to its lowest level since October 2011. In June, nearly 80% of small business owners made no hiring changes at all. Instead of helping our nation’s job creators, President Obama wants to slam them with higher taxes. As the Wall Street Journal writes, “Businesses are sitting on their wallets as they wait out the tax, regulatory and election uncertainty. Mr. Obama's tax gambit will only increase that uncertainty and further retard investment and job creation.” We need to give our small businessmen and women a shot of confidence in order to boost job growth. Leader Cantor told CBS This Morning, “If you really allow people to keep more of their hard-earned money, we'll see more confidence come back into the economy.” This week, House Republicans will act to help our small businesses by repealing ObamaCare. And in the coming weeks we will cut Washington red tape and make it clear that we don’t want to see taxes go up on anyone during this tough economy, which oh by the way was the President’s position 2 years ago, but not anymore...

Today in History: In 1925, the Scopes (“Monkey Trial”) began in Tennessee after a high school teacher was charged with violating a state law that prohibited the teaching of evolution in public schools, resulting in a guilty verdict which ended up being overturned on technical grounds. In 1968, the Supreme Court ruled that such laws violated the First Amendment.

Birthdays: Rep. Phil Gingrey, Rep. Tom McClintock, Shawna Thomas, Jessica Simpson, Arthur Ashe, Sofia Vergara and Robert Whittemore

Here Are the Top Stories We’re Watching:

1. State Of Play: Leader Cantor: We Will Make Sure Taxes Don't Go Up On Anybody, Allow People To Keep More Of Their Hard Earned Money. "It is our wish for the American people that we say, fine, no taxes are going to go up on anybody, at the lower end of the income spectrum or the higher end...I think there's a real dispute as to if you were to look at perhaps the growth potential. If you really allow people to keep more of their hard-earned money, we'll see more confidence come back into the economy." CBS This Morning

2. Tax Debate: President Obama Pushes For More Taxes, While House Plans Vote To Ensure Taxes Don’t Go Up On Anybody. President Barack Obama stood at the White House Monday and held a thinly veiled campaign event, claiming that Republicans want to raise taxes on the middle class… “It seemed very fake,” Mary Kate Cary, a speechwriter for President George H.W. Bush, said of Obama’s Monday speech. “Part of it was having people on the risers behind him, like a campaign event”…Republicans say Obama’s in fantasyland if he thinks they agree with his current position on taxes. “Two years ago, President Obama said extending these same tax rates was ‘the right thing to do’ for the middle class, for jobs and for small businesses,” House Majority Leader Eric Cantor (R-Va.) said. “The House will vote the last week of July to ensure taxes don’t go up on anybody.” Politico

3. Dem Divide: White House Calls For Tax Hikes Congressional Dems Won’t Support. President Barack Obama’s renewed push to raise taxes on people who make more than $250,000 is facing some strong head winds: Democrats running for Congress in 2012. Several Democrats in critical House and Senate races say they prefer raising taxes on people who make more than $1 million, the latest example of how the president and vulnerable Democrats are mounting diverging campaigns just four months from Election Day…The divergence can be seen on other fronts as well: A handful of vulnerable Democrats are expected to vote in favor of repealing Obama’s health care law when it comes up for a symbolic vote Wednesday in the House. Coal-state Democrats have been openly criticizing the president on energy policy. And several Democratic lawmakers in tough races are bowing out of their party’s three-day convention in September, believing that physical distance from the president during the convention may help them politically. Politico

4. Obama’s Tax Hike: A Direct Hit On The Middle Class, Small Businesses And Every Worker On The Margin Of Being Hired Or Laid Off. [M]iddle-class voters with serious economic anxiety will be understandably skeptical about the president’s latest promise that his next round of tax hikes will spare them…Consider the case of Americans who built up value in a home their entire lives and never made more than a modest annual income. They will be “rich” according to Obama in the one year they sell that home – and subject to a hefty tax hike with the new health care surtax on capital gains taking the tax above the exempt amount from 15 percent now to 23.8 percent next year…Bloomberg News recently reported: “President Barack Obama’s plan to raise tax rates for the top 2 percent of U.S. households would mean higher taxes on 53 percent of business income reported on individual returns, according to the Joint Committee on Taxation.” Such a huge tax hike on small businesses – who comprise the overwhelmingly majority of upper-income individual tax filers – will negatively impact not just business owners but every worker on the margin of being hired or laid off. Obama didn’t mention it Monday, but one of the “tax hikes on the rich” he has favored, and presumably would include in his plan, is to allowing the death tax to jump from its current 35 percent rate above $5 million to a confiscatory 55 percent rate on everything above $1 million -- this will put a lot of family businesses and farms out of business. Fox News

5. Faulty Logic: Editorial: President Obama Wants Lower Tax Rates For Big Business Than For Small Business. By Mr. Obama's economic logic, tax increases matter on middle-income earners but are irrelevant to everyone else. "By the way, these tax cuts for the wealthiest Americans are also the tax cuts that are least likely to promote growth," as he put it Monday. But Mr. Obama is demanding tax increases, not tax cuts, and large increases at that. If the Bush tax rates expire as scheduled on December 31, rates on the top two income brackets will jump to 39.6% from 35%, and 36% from 33%. Add the scheduled return of income phaseouts for exemptions and deductions, and the rates go up another two-percentage points—to at least 41% and 35%. Mr. Obama claims this will merely return rates to what "we were paying under Bill Clinton," but that's not true either. It ignores his ObamaCare tax increase of 0.9% on top of the current 2.9% Medicare tax, plus a new 2.9% surcharge on investment income, including interest income. That's an additional 3.8% surcharge on investment income, and added to the Bush expirations would take the capital gains rate to 23.8% from 15% today, and the dividend tax rate to about 45% from 15%. In Mr. Obama's economic world, tax cuts for middle-class "consumption" are good, but low rates to spur saving and investment are bad. This makes no sense because consumption is ultimately the product of saving and investment. The President dismissed all of this as merely affecting 3% of small business owners. But that includes tens of thousands of the most productive, fastest-growing small businesses—those most likely to hire workers amid a national jobless rate of 8.2%. Congress's Joint Tax Committee—not a conservative outfit—estimates that in 2013 about 940,000 taxpayers will have enough business income to meet Mr. Obama's tax increase threshold. And of the roughly $1.3 trillion in net business income, about 53% will get hit with the higher tax rates. This is because millions of businesses report their income as sole proprietors and subchapter S corporations that file under the individual tax code. So Mr. Obama wants these businesses to pay higher tax rates than the giant likes of General Electric or J.P. Morgan. Does that qualify as "tax fairness"? Wall Street Journal

6. Out Of Touch: Hoyer Doesn’t Think Raising Taxes On Small Businesses Will Have An Adverse Impact On The Economy. House Democratic Whip Steny Hoyer (Md.) said this week that President Obama is right to ask those earning more than $250,000 annually to pay more taxes next year…Hoyer on Monday sided squarely with Obama's lower threshold, even floating the notion that those earning less than $250,000 should also be asked to pay more when the economy recovers.“I think the president is correct — $250,000,” Hoyer said during an economic forum sponsored by the Center for American Progress in Washington. “I would be prepared to go lower at some time in the future...but our economy is still struggling, and I think going lower than that would have an adverse impact on the economy.” But, Hoyer added, “I don't think going higher than that will have an adverse impact on the economy.” The Hill

7. Small Biz: Small Business Optimism Suffers Largest Decline In Two Years. Slowly but surely, small business optimism had been improving over the last several months. Not anymore. Small business owners’ spirits plummeted last month, according to the National Federation of Independent Business’ latest optimism index, which dropped to an eight-month low of 91.4 in June, completely erasing modest gains over the first five months of the year. The drop from 94.4 in May marks the largest month-to-month decline since June 2010. “All in all, this month’s survey was a real economic downer,” NFIB Chief Economist William Dunkelberg said in a statement. “The economy has definitely slowed; job growth will be far short of that needed to reduce the unemployment rate unless lots of unemployed leave the labor force—no consolation." Deepening concerns over earnings, raw sales and political uncertainty pulled the reading down. Even more alarmingly, given the stubbornly high unemployment rate and small businesses’ reputation as a consistent job engine, the net change in employment per company dropped last month for the first time this year. “The report shows that small business optimism has dramatically regressed to October of last year, and the outlook for hiring is not promising,” Rep. Sam Graves (R-Mo.), Chairman of the House Small Business Committee, said in the wake of the survey, later suggesting that the president’s economic strategies are slowing the recovery. “This is further proof that the policies being promoted from the White House simply are not encouraging our nation’s primary job creators.” Washington Post

8. ObamaCare Fallout: 83% Of Doctors Have Considered Quitting Over ObamaCare. Eighty-three percent of American physicians have considered leaving their practices over President Barack Obama’s health care reform law, according to a survey released by the Doctor Patient Medical Association. The DPMA, a non-partisan association of doctors and patients, surveyed a random selection of 699 doctors nationwide. The survey found that the majority have thought about bailing out of their careers over the legislation, which was upheld last month by the Supreme Court. Even if doctors do not quit their jobs over the ruling, America will face a shortage of at least 90,000 doctors by 2020. The newly passed health care bill increases the demand for physicians by expanding insurance coverage. This change will exacerbate the current shortage as more Americans live past 65.By 2025 the shortage will balloon to over 130,000, Len Marquez, the director of government relations at the American Association of Medical Colleges, told The Daily Caller. Daily Caller

9. Keeping Tabs: Gas Prices On The Rise. If the price of gas seemed a little high toward the tail end of your July 4 road trip, it wasn’t your imagination. After declining for several weeks the price of a gallon of gasoline is rising. The average price per gallon for regular gas is $3.38 compared with $3.33 a week ago, according to travel group AAA. The change continues what has been an unusual year for fuel-pricing trends. Gasoline in the U.S. typically gets more expensive with the approach and arrival of the summer driving season, which begins around Memorial Day. But this year the price peaked over $3.90 in April and has been falling ever since. Wall Street Journal

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