Ending tax cuts for small businesses would hurt the economy (Rep. Tom Cole)

In addition to extending the Bush
tax cuts, President Obama also proposed yet more spending. His proposals, from
an additional $50 billion for infrastructure spending to the 100 percent
expensing of research and development for large corporations, once again
demonstrates the wrong approach toward bringing our country out of this
economic malaise. Since the passage of the $787 billion “stimulus” in
February of 2009, unemployment has continued upward and now sits at 9.6
percent. What could this additional $50 billion do that the $787 billion could
not?

The problem with stimulating our
economy will not be addressed by simply having the government throw more money
at the problem. In fact, according to economists Jason E. Taylor and Richard K.
Vedder, “stimulus efforts of modern times, perhaps most notably that of
Japan during the 1990s…actually led to reduced economic growth and long-term
higher unemployment.”

The true engine of American economic
growth and job creation is small businesses. In the last decade, small business
created two-thirds of the net new jobs. The success of these organizations is
tied directly to individual tax rates. According to the National Federation of
Independent Businesses, 75 percent of small businesses are organized as
pass-through entities, meaning their taxes on business income are based on
individual tax rates. In the state of Oklahoma, small business accounts for
97.4 percent of the state’s employers. 

Congress should permanently extend
all of the tax cuts due to expire at the end of this year.  When
uncertainty exists in any market, business is reticent to build capacity or
additional jobs. Over the past year, this Democrat-controlled Congress has
completely rewritten the rules for the financial services and healthcare
industries, with years of rulemaking left to go.  This, in addition to the
looming expiration of the Bush tax cuts, certainly creates an economic
environment of uncertainty.

Extension of current tax policy for
all is not a Republican issue. In 2001, the House passed the first rounds of
cuts 240 to 154, with 28 Democrats joining the Republican majority. Democrat
Senators Jim Webb, and Evan Bayh have already announced their
support for extension of the Bush tax cuts. With elections only a few short
weeks away, taxes and the economy will be in the forefront of the public’s
mind. Let’s work to legislate on behalf of the American people and put partisan
differences aside.