Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Cantor’s 'Small Business' Bill is a $46 Billion Loophole for the Rich

Cantor’s 'Small Business' Bill is a $46 Billion Loophole for the Rich

Ratings: (0)|Views: 23 |Likes:
H.R. 9 is an ineffective giveaway to the rich, poorly targeted toward small businesses, and even more poorly targeted toward job creation, writes Seth Hanlon.
H.R. 9 is an ineffective giveaway to the rich, poorly targeted toward small businesses, and even more poorly targeted toward job creation, writes Seth Hanlon.

More info:

Published by: Center for American Progress on Apr 13, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

05/13/2014

pdf

text

original

 
1Center or American Progress | Cantor’s “Small Business” Bill is a $46 Billion Loophole or the Rich
Cantor’s “Small Business” Bill is a$46 Billion Loophole for the Rich
Nine Reasons to Reject H.R. 9
By Seth Hanlon April 13, 2012
Introduction
Te U.S. House o Represenaives early nex week will hold a voe on H.R. 9, a billinroduced by Majoriy Leader Eric Canor (R-VA) o provide a one-year, 20 percen ax deducion or business income. Te Canor bill is sadly jus anoher ax windall or herich, nanced by larger ederal budge decis, which largely misses is osensible argeo small businesses and wouldn’ creae jobs. As an economic sraegy i’s one we’ve ried beore and a ailure we don’ wan o repea.Here are nine reasons why he House should rejec H.R. 9:1. H.R. 9 is a gian windall or he very wealhy, no an incenive or small-business job creaion2. Hal o H.R. 9’s ax cus go o millionaires, no o business owners who would mos bene rom a ax break 3. H.R. 9 would bene companies ha eliminae or oshore jobs4. H.R. 9’s emporary ax break on business pros is a windall, no an incenive5. H.R. 9 arbirarily avors some businesses over ohers6. H.R. 9 encourages businesses o wai unil nex year o make invesmens7. H.R. 9 misdiagnoses he undamenal problem acing small businesses and he broadereconomy—a lack o demand8. H.R. 9 is he opposie o ax reorm9. H.R. 9 is paid or by $46 billion in borrowed money So le’s look a each o hese reasons o rejec he bill in urn.
 
2Center or American Progress | Cantor’s “Small Business” Bill is a $46 Billion Loophole or the Rich
HR 9 is a giant windfall for the very wealthy, not an incentivefor small business job creation
Under Rep. Canor’s bill, in general, all businesses wih ewer han 500 employees areeligible or he ax deducion on heir acive domesic income. Te erm “small business”evokes images o mom-and-pop sores or sarups hoping o expand, bu in ac a very widerange o enerprises owned by exremely wealhy people have ewer han 500 employees.Tese businesses and heir owners would reap a gian windall rom he Canor bill. An exchange during he House commitees consideraion o he bill beween Rep. Xavier Becerra (D-CA) and Tomas Barhold, who heads Congress’s nonparisan Join Commitee on axaion, underscored ha Rep. Canor’s ax cu could poenially provide large windalls o he owners o a hos o enerprises ha are a ar cry rom heimage Canor ries o evoke o he sruggling small-business owner. Tese include:
•
Proessional spors ranchises, such as he Los Angeles Dodgers, which were recenly sold or $2 billion
•
Donald rump’s rump ower Sales & Leasing
•
Paris Hilon Enerainmen, Inc.
1
In addiion o he owners o enerprises like hese, he Canor bill would provide asizeable ax cu o many highly paid proessionals, including lawyers, lobbyiss, docors,sockbrokers, hedge und managers, and oher nancial indusry proessionals. Tese well-compensaed proessionals are among he leas in need o a ax cu—and alsounlikely o use he exra cash rom a ax cu o expand operaions or hire ohers.
2
As oneeconomis asked when discussing he Bush ax cus, “Should we give he hedge undmanagers millions o dollars o ax relie on he possibiliy ha hey migh hire anoheroce assisan?”
3
Te same quesion should be asked o Canor’s bill.
Half of H.R. 9’s tax cuts go to millionaires, not to business owners whowould most benefit from a tax break
 An analysis by he nonparisan ax Policy Cener shows ha he Canor bill is exremely skewed oward he wealhy. People wih annual incomes above $1 million would receivenearly hal o he bene rom Canor’s bill, even hough hey comprise less han one hal o 1 percen o all axpayers.
4
Tey also comprise a small percenage—jus 4 percen—o small-business employers, according o a recen reasury Deparmen analysis.
5
In ac, 76 percen o small-business employers have incomes below $200,000. Buha group receives only 16 percen o he bene rom Canor’s bill. And 55 percen o small-business employers have incomes below $100,000, bu ha group receives only 6percen o he bene rom Canor’s bill.
 
3Center or American Progress | Cantor’s “Small Business” Bill is a $46 Billion Loophole or the Rich
Te ax benes are badly skewed largely because o he bill’s awed design. A ax deduc-ion ied o business income provides he bigges bene o businesses ha are already earning he larges pros and o business owners in he op ax brackes.
H.R. 9 benefits companies that eliminate or offshore jobs because thereis no requirement that a company actually create jobs to claim thespecial deduction
I he purpose is o arge ax relie o acual small businesses creaing jobs hen he ax  break should a leas be conneced in some way o increased hiring—bu he Canor bill is no. Insead, he proposed legislaion chooses perhaps he mos cosly and leasargeed approach possible.Under he Canor bill here is no requiremen ha a business owner use he exra cashrom he ax cu o reinves in his or her business, as opposed o spending i on personalconsumpion or simply puting i in he bank. Businesses ha do no creae jobs—and even hose ha lay o employees—are sill eligible or he deducion, as anoherexchange beween Rep. Becerra and he Join ax Commitee’s Barhold made clear:
Rep. Becerra:
Is here a requiremen ha you creae jobs?
Barthold:
Tere’s no requiremen on he resul o he ax relie.
Rep. Becerra:
So you don’ have o creae a job o ge he 20 percen ax cu?
Barthold:
Ta is correc, sir.
Rep. Becerra:
Wha i you red an employee? Can you sill ge a ax cu?
Barthold:
Te simple answer is yes.
Rep. Becerra:
Wha i a company res an employee in he Unied Saes and lays o an American worker and hen hires people abroad by ousourcing ha job, could ha com-pany sill qualiy or ha ax cu?
Barthold:
Tey could sill qualiy . . . An amendmen by Rep. Joseph Crowley (D-NY) in he House Ways and MeansCommitee o deny he deducion o businesses ha have oshored jobs (expandingpayroll abroad while cuting i in he Unied Saes) was rejeced in a pary-line voe.
6
H.R. 9’s temporary tax break on business profits is a windfall,not an incentive
For mos business owners H.R. 9 would be a pure windall wih no eec on inves-men or job creaion. Business owners make invesmens and hire people no becausehey have exra cash lying around bu because hose invesmens and hires will increaserevenues by more han heir cos. And because labor coss are deducible, a reducion

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->