I had the opportunity last month to visit with many of you throughout the state, and it should come as no surprise that the primary concern among most Nebraskans continues to be jobs and our economy. I've returned to Washington with this fresh in my mind, just as the debate has begun on the tax increase set to go into effect on January 1.
The impact will ripple across our economy as families and businesses everywhere are hit with a massive tax increase. We rely heavily on small businesses to create jobs and boost our economy, so it wouldn't make sense for their government to take more of their money while urging them to spend it on expanding and hiring workers.
There's a lot of rhetoric circulating about these tax increases. Proponents, including the President and his Administration, propose exempting those who earn less than $200,000, but allowing massive tax increases to take effect for everyone else. They claim that only "rich" Americans would be impacted. That's a false notion.
Many small business owners file as individuals and therefore report income above $200,000. In fact, seventy-two percent of all small business income is taxed at the upper two individual tax rates -- those targeted by the President for a tax increase. Small businesses have generated 64 percent of all the new jobs over the past 15 years. I cannot fathom why we would raise taxes on these folks when we're facing record unemployment and a sputtering economy. Additionally, many family farms and ranches would also be caught in the net of this massive tax increase. They would all suddenly find themselves classified as "rich" by this Administration. It is unfair and unwise policy.
The original intent of the tax cuts, when instituted nearly ten years ago, was to free up capital for these entities to enable them to grow, hire, and produce for our country. In fact, in 2007, once these tax cuts took effect, tax collections reached an all-time high. The bottom line is that tax breaks help to get our economy moving, which in turn generates tax revenue.
Under the Administration's proposal, the Joint Committee on Taxation estimates that nearly 750,000 small businesses will be hit with this tax increase. The National Federation of Independent Businesses reported that up to 48 percent of our small businesses will be impacted. Take a second and think of the farmer or rancher down the road, or the owner of the business around the corner. Do they seem like they can afford a tax hike right now?
What our small businesses need now are customers, not tax increases from the government. The Obama Administration insists that small businesses earning more than $200,000 would simply tuck money away if the government doesn't raise their taxes. Business owners will tell you that idle money is lost money.
Most importantly, increasing taxes on our country's top job creators in the wake of the worst recession in seventy years is simply ridiculous. It's time for government to stop suppressing businesses and give them a chance to grow and create jobs. Our small businesses are the heart of an economy that won't grow if it isn't given a chance.