Mr. Speaker, this bill contains many positive features but also some negative ones and thus I reluctantly plan to oppose it.
Like my friend on the other side of the aisle, I am pleased to see that it does include some tax relief, albeit limited, for small businesses, including provisions championed by both Republicans and Democrats.
And I am also pleased that, unlike an earlier version of this legislation, the most objectionable revenue raiser, a provision that could provoke retaliation by other countries and that even Obama Administration officials warn would violate our international treaty obligations.
But despite those positive features, I will be voting against this bill for several important reasons.
First, while the tax relief in here is welcome, it is not enough and won’t actually help small businesses create the jobs we need to reduce our stubbornly high unemployment rate.
While I would certainly support further lowering taxes on small businesses, the last thing they need is higher taxes, which is exactly what they are facing from this Congress.
Just last month, the Majority pushed through an $11.2 billion tax hike on certain small businesses that would subject their profits to employment taxes.
And at the end of 2010, all individual income tax rates, as well as taxes on dividends and capital gains, are scheduled to rise dramatically. Because so many small businesses pay taxes at the individual level, the fear of these increases is chilling expansion and hiring.
So the Majority’s track record on tax policy affecting small businesses is spotty at best.
Second, this bill, like others before it, provides a stark reminder of the Majority’s view of the Ways & Means Committee as an ATM to fund other spending.
Here, the Majority is seeking to generate $7.1 billion in additional tax revenue but would only provide $3.6 billion in tax relief over the next decade. The rest of the money raised will be used to offset the cost of another bill – H.R. 5297, which was reported by the Financial Services Committee – that creates yet another TARP-like program.
While I am glad the Majority found offsets that are less economically damaging than some that have previously passed the House, the practice of using permanent changes in tax receipts to fund temporary spending is disappointing and portends further and larger tax hikes in the future, perhaps as soon as the end of this month when the Majority hopes to complete action on a financial system reform bill.
Mr. Speaker, especially with the unemployment rate continuing to hover near 10%, our small businesses – the engines of economic growth and job creation – need help. But this bill is not enough, and it takes us further down the dangerous road of higher spending our nation cannot afford.