Dedicated to supporting America’s small businesses, President Obama has spent the last four years cutting their taxes 18 times, increasing their access to credit, and making investments in the infrastructure and education that they depend on.
Mitt Romney would take a different approach. Rather than focusing on small business owners, Romney would cut taxes for the wealthiest Americans and biggest corporations at the expense of the middle class and small business owners. Take a look at just five of the ways Romney would undermine the economic security of small business owners across the country.
Hike taxes, on average, for 30 million small business owners: Romney’s $5 trillion tax plan includes tax breaks for the wealthy so large that—unless he decides to explode the deficit—he’d have to slash important tax benefits for small business owners and the middle class to pay for them. A Tax Policy Center report found that even if Romney eliminates all tax benefits for households making over $200,000 a year—other than those for savings and investment, which he has ruled out—he would still have to raise taxes by an average of over $500 for those earning under $200,000 a year. That includes the 30 million families with business income who pay taxes as individuals and earn less than $200,000 a year.
Eliminate or cut tax benefits important to small businesses. The tax benefits at risk under Romney’s plan include many that offer important help to small businesses, including tax deductions for health insurance premiums and state and local taxes, and several business tax credits including those for energy efficiency, research activities and other expenses. To pay for his tax cuts for the wealthy, Romney would have to eliminate these tax benefits entirely for households making more than $200,000 and cut them by 58 percent for those making less than $200,000. And by repealing Obamacare, he’d also eliminate new tax credits for small business owners that offer their employees health coverage. Beginning in 2014, the credit will be worth half the cost of insurance. And Obamacare gives small businesses access to group rates, so that they no longer have to pay up to 18 percent more per worker than large firms for the same healthcare. Romney would repeal each of these small business health benefits.
Fail to offer or support efforts to encourage hiring and investment: Small businesses have added 2 out of every 3 net new jobs over the last two decades. But, unlike President Obama, Romney has no plan to provide targeted tax relief for small business hiring. He also opposed the President’s American Jobs Act, which proposed extending 100 percent expensing for 2012 so business owners could fully deduct the cost of investments in plants and equipment. President Obama continues to advocate for 100 percent expensing, which has traditionally enjoyed strong bipartisan support.
Oppose providing certainty to 97 percent of small businesses: Romney refuses to support the President’s plan to extend middle class tax cuts—benefiting 97 percent of small businesses—unless tax cuts for the wealthiest Americans are extended at a cost of $1 trillion over the next decade. And many of the “small businesses” in the top 3 percent that would face higher taxes are hedge fund manager and even Romney himself.
Give large corporations more advantages over small businesses: Romney has proposed tax cuts targeted towards the largest corporations in the United States, cutting their tax rate by almost 30 percent at a cost to taxpayers of nearly $1 trillion over the next decade. Over 90 percent of the tax cut’s benefits would go to the largest 0.6 percent of corporations. He would completely eliminate U.S. taxes on corporations’ overseas profits, putting small businesses that can’t shift to foreign affiliates at a disadvantage compared to large multinational corporations.