Chronicle Letter to the Editor
Cut tax on small business
Regarding "Obama seeks more for small businesses" (Page D3, Thursday), if Obama truly seeks more for small businesses he should do the one thing that will enable them to reinvest in their businesses and propel them forward. As a former small-business owner, I can speak from experience on this issue. If we are to regrow jobs in America, small businesses must be able to retain more of their profits to reinvest into the expansion efforts of their business operations instead of the expansion of government operations.
The corporate tax rates quickly rise from 15 percent to 39 percent, then fall back to 35 percent. After $100,000 in profit, the government wants nearly 40 cents out of every dollar a small business earns. Ask yourself this: Who do you think can spend $1 more wisely, a small-business owner with everything on the line or the federal government?
It is time we reduce corporate taxes, which are only 13 percent of the revenue to the government anyway, to a level that enables us to better compete in the global market place. Taxes on small businesses, those with $1 million or less in profit, should be zero. This will enable them to keep the money in their company and grow. Many business owners only need so much income, but often they take more from their company than they really need because they do not want to pay the excessive federal (and state) taxes on those profits.
In the good years of my company, I took more profit out because of tax strategy. Had the rate been zero, I would have left hundreds of thousands of dollars in my company, which could then have been used for expansion or other investments in America. If we truly want long-term job growth in America, this is the provision we need. Every day we waste is another missed job opportunity in America.
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