"May 5, 2010
Madam Chairwoman, thank you for calling this hearing on
the critical topic of tax initiatives that promote small business growth. I'd
also like to thank our witnesses, some of whom have taken time away from their
companies to be with us today.
The economy is still struggling, and the outlook is still
uncertain. Foreclosures, credit card defaults and bankruptcies remain high.
Unemployment is still almost 10%. For businesses, especially small ones,
capital markets remain tight, and few are expected to expand or hire. Companies
remain skeptical about a lasting economic recovery.
Small businesses are reeling from the news that under the
new health care law, they will be forced to provide health insurance or pay a
penalty. And that's in addition to the myriad of new regulations and reporting
requirements.
Here's just one example: section 9006 of the new
law requires businesses to submit a Form 1099 for every business to business
transaction of $ 600 or more of property and services. Small businesses already
bear a heavy burden of paperwork compliance. This is another example of forcing
small business owners to take more time away from their business to comply with
an unnecessary mandate. Of course, the small business owner could choose to
outsource the paperwork to an accounting firm. Either way, the entrepreneur
loses scarce resources that could be spent gaining more customers or producing
more products. Higher taxes, more mandates, new regulations and piles of
paperwork do not foster an environment that is conducive to creating jobs.
Taxes are a constant concern for small companies. In this
economic climate, every expense is an added burden. Small businesses pay more
per employee to comply with the tax code, and often can't afford experts to
help navigate through it.
Entrepreneurs depend on tax incentives to offset some of
the cost of innovation and expansion. While I support temporary tax provisions,
or "extenders," because I know they are critical for small companies,
their temporary nature causes uncertainty. Not knowing whether these tax
provisions will be renewed makes it difficult for small businesses to plan for
future growth. I also believe we must make permanent the 2001 and 2003 tax
provisions, which lowered marginal rates. That's why I introduced legislation
to do just that.
Finally, I want to say a word about the estate tax, and
my support for its complete repeal. If Congress does nothing, a top marginal
rate of 55% and an exemption of just $ 1 million will again take effect in
2011. Small businesses and farms are often operated by families and transferred
from one generation to the next. To pay the estate tax, heirs could be forced
to sell the very land and equipment that is needed to operate the family
business. As you have heard me say before, death should not be a taxable event.
We must kill the death tax.
Madam Chairwoman, thank you for holding this hearing on the vital subject of taxes. I look forward to the testimony of our witnesses."
Leave a comment