September 21, 2010

Dear Senator:

On behalf of the National Federation of Independent Business (NFIB), the

nation’s leading small business advocacy organization, we urge you to hold a vote on
legislation to extend all of the current individual tax rates. Failure to extend the expiring
tax rates, including the top two individual income tax rates, will be seen as a tax increase
on small business.

Tax laws passed in 2001 and 2003 are set to expire at the end of this year,
increasing the tax rates for individual taxpayers and raising the maximum rate to nearly
40 percent. According to an NFIB small business survey, 75 percent of small businesses
are organized as pass-through entities meaning they pay taxes on their business income at
the individual rate and will be subject to these increases. With small businesses struggling
to recover from the recession and unemployment near 10 percent, no small business
should face a tax increase.

Small businesses created 2/3 of the net new jobs in the last decade. Raising the tax
rates on the top two income brackets specifically targets businesses that employ a
substantial portion of the workforce. Based on an NFIB small business survey, the
businesses most likely to face a tax increase by raising the top two rates are businesses
employing between 20 and 250 employees. According to U.S. Census data, businesses
with between 20 and 299 workers employ more than 25 percent of the total workforce.

As the NFIB small business economic trends survey shows, small business is still
struggling to recover from the recession. Uncertainty about the economy and looming tax
hikes have kept this sector from hiring new workers, resulting in a weak economic
recovery and slow to nonexistent job growth. Until small businesses begin to hire, the
unemployment rate will remain high.

Congress can take an important step to address the uncertainty by holding a vote
and passing legislation extending all of the expiring tax rates. No small business owner
should face higher taxes.

Sincerely,

Susan Eckerly
Senior Vice President
Public Policy

National Federation of Independent Business

1201 F Street NW * Suite 200 * Washington, DC 20004 * 202-554-9000 * Fax 202-554-0496 * www.NFIB.com