WASHINGTON D.C. – House Majority Whip Kevin McCarthy (CA-22) today released “Is the President Listening? Linda’s Story,” a new video in which Linda Lizanich, an accountant at Willoughby, OH based Kennedy Group, breaks down how President Obama’s small businesses tax hike will hurt middle class employees working at small businesses.
“A small business that makes slightly over $250,000 is going to be taxed at 39.6%,” said Linda Lizanich about the President’s proposed tax hike. “I don’t think he realizes how much it’s going to cut back on employment, how much it’s going to cut back on investment. If you’re going to raise taxes you also need to cut costs, and I don’t know what they’ve decided to do about cutting costs yet if anything.”
Linda Lizanich is an accountant at the Kennedy Group, a sub chapter S corporation labeling and packing company established in 1974 and responsible for about 140 jobs. Linda understands first-hand the effects of economic malaise after she spent a year and a half unemployed because her small accounting firm was forced to make the tough choices of cutting costs and jobs.
“In the first two months alone, we’ve already seen the President increase spending by $87 billion,” Majority Whip Kevin McCarthy said. “While Republicans have put new revenues on the table, the President remains silent about which costs he would cut. The only way to solve our fiscal and economic problems is through a balanced, cut and growth solution, slowing the rate of spending and closing tax loopholes in a small businesses and economic friendly way.”
The non-partisan Congressional Budget Office (CBO) released its monthly budget review last week, reporting that the federal deficit in just the first two months of fiscal year 2013 reached $292 billion. The federal government has borrowed 46 cents of every dollar it has spent so far this fiscal year and has increased spending by $87 billion as compared to the same time last year.
Small Business Facts:
- President Obama’s tax hike on small businesses would destroy more than 700,000 jobs and lead to lower wages, according to analysis by independent accounting firm Ernst & Young.
- According to the Joint Committee on Taxation, a tax rate hike will hurt nearly one million small businesses across the country.
- Most small businesses file their taxes on an individual return. According to NFIB, nearly 75% of small firms are organized as “pass through” entities, such as sole proprietorships, partnerships or LLCs, where business income is passed through and taxed at the individual rate.
- Pass-through businesses are highly sensitive to individual rates. Ernst & Young’s analysis showed that a 5% increase in the individual tax rate reduced by 10% the number of owners making capital investments.