Business Owners Want Fiscal-Cliff Deal for Customers
Position yourself for growth in 2017—join us live at the Entrepreneur 360™.
Flash Sale—save up to $200 on registration. Ends Thursday. Secure Your Seat »
Small-business groups are adding their voices to the chorus of Americans urging Washington politicians to resolve the fiscal cliff crisis before it hits their customers.
Today the Small Business Majority held a tele-press conference and Main Street Alliance held a briefing call with small-business owners on the battle over where the new tax threshold should be set. Republicans and Democrats on Capitol Hill once again reached a stalemate in negotiations.
Business owners are eager for both sides of the aisle to come together and hammer out a deal that protects their customers and provides them with certainty going forward. If Congress is not able to make a deal to reduce the deficit by Dec. 31, a mere 11 days away, a slew of spending cuts and tax hikes would go into effect immediately.
“What we need is we need the strongest economic climate we can have. We need the consumer being confident and strong, having those extra dollars to go out and have a set of wine glasses or buy some extra dinnerware,” said Walt Rowen, owner of Susquehanna Glass Co. in Columbia, Pa., at the press conference Small Business Majority, an advocacy group based in Washington, D.C.
“If folks’ taxes go back up, and the middle-class family is looking at two to three thousand dollars in additional taxes, those are the margins in dollars that really make a huge difference in our industry,” said Rowen. His glassware company is a third-generation family-owned and operated factory business that employs 35 full-time, permanent workers, with another 15 to 20 workers during holidays. “We could very definitely see a huge retraction once again with taxes going up into next year.”
Earlier this week, it looked as though President Barack Obama and House Speaker John Boehner (R., Ohio), were coming to an agreement. Both sides were making concessions. President Obama agreed to raise the threshold for extending the tax cuts to the first $400,000 of income from the $250,000 that he campaigned heavily on. Boehner then came out with a proposal, dubbed “Plan B,” to raise that threshold to all earners that make $1 million or less, which the House will vote on today.
Tim Christiansen, the owner of Vino Per Tutti, an independent wine shop in Bozeman, Mont., said in a press release from the Seattle-based Main Street Alliance, that he, as well as the vast majority of his small-business owner compatriots, make less than $250,000 a year.
Ninety-seven percent of small businesses make less than $250,000, roughly equivalent to 32 out of 33 small businesses, says Sam Blair, the Main Street Alliance network director. To raise the threshold to $1 million from $250,000 would help only one out of 33 small businesses, and those businesses that might be helped are of the “Donald Trump” variety, Blair says.
As Obama and Boehner battle over what the threshold should be for extending tax cuts, small business owners are often used as chess pieces in the debate. A common argument is that the government needs to extend tax cuts for wealthier individuals in order to protect small business owners, the job generators of this country. Not all small business agree.
“As a small-business person, I do not make many of my economic decisions based upon tax policy. When I look at decisions to expand my business, if I look to hire new people, the reason I make the decision to do that is based upon what the economic climate is going to be and the economic activity of my industry,” said Rowen. “Most small-business people that I know are in the same situation that I am in.”
How will your business be impacted by the fiscal cliff? Leave a comment below and let us know.