Tax Deal Will Help Small Businesses Create Jobs
This week, President Obama and Republican negotiators announced a deal that will extend all of the 2001 and 2003 tax cuts for two years while also extending unemployment benefits for 13 months, preventing the estate tax from being fully reinstated and cutting payroll taxes for a year. As I’ve been saying all year, no American should face a tax increase in this economic environment. Our top priority must be preventing a tax hike on any American.
Since I came to Congress, my main focus has been on creating jobs and getting people in East Tennessee back to work. The threat of these job-killing tax hikes is the single greatest cause for concern among both working families and employers, who might have to shed jobs with increased costs.
This deal will help small businesses create jobs. When Republicans take control of Congress January 1st, our first priority must be to stop the job-killing spending binge in Washington, and provide certainty for private-sector job creators by permanently eliminating the threat of tax hikes, as promised in the Pledge to America.
Based on the framework I have seen, this legislation will help alleviate some worries many small businesses, families and farmers were facing if these tax cut extensions were to expire. All and all, this legislation will minimize much of the uncertainty, and businesses will have an easier time budgeting for 2011.
Additionally, there is an Alternative Minimum Tax (AMT) patch to ensure that an additional 21 million households will not be hit with a stealth tax increase. While permanent repeal without offsetting is the best option, I am pleased something will be done to protect taxpayers immediately, even if it is just a temporary solution.
Included in the framework is estate tax relief, providing a $5 million exemption and a top rate of 35% for 2011 and 2012. This is especially important for family farms because this provision will prevent the estate tax from snapping back to a $1 million exemption and 55% top rate.
This legislation also includes a payroll tax cut for one year, which will give all Americans additional tax relief. Although I would have liked to see a reduction in the employer’s payroll tax responsibility as well, I am pleased there is some consideration of this cut overall.
This deal is by no means perfect, but it should make clear to all Americans that Republicans were serious when we said that our top priority was job creation and stopping job-killing policies.
In the next Congress, I look forward to working with my newly elected colleagues to rein in out-of-control government spending to get a hold of the deficit.