I've run a small
business for more than 30 years, and the claim that more tax cuts for
the rich can generate jobs at small businesses is ridiculous. Expecting
high-end tax cuts to trickle down as job creation is about as reasonable
as pouring gasoline on your hood and expecting it to run your engine.
My company's success or failure is tied to the economic health of our 24
employees, our customers, our community, our state and our country. The
quick-buck artists who have increasingly dominated our financial system
since the 1970s don't care about the long-term growth of companies they
temporarily "invest" in or the well-being of the people who work at
them. Now they're trying to sell us more tax cuts for the rich - cloaked
in concern over small-business owners and jobs.
When tax cut lobbyists tell you that small-business owners will use the
money saved from lower tax rates to hire someone, they've got it
backward. Either they've never run a small business, or they're trying
to mislead you.
My tax rate doesn't affect hiring. If I think I can do more business, I
hire more workers. The costs of finding, hiring and paying new employees
are business expenses. They're deducted upfront from our taxable
Ultimately, those new employees are going to earn my company more in
profit than it costs to find, train and pay them. That's how capitalism
So if Congress wants to help my company - and other small businesses -
create jobs, it should support tax and economic policies that boost
broad-based consumer income and spending.
"Experience shows that lower tax rates for high incomes don't generate
better job creation," says a new report by Business for Shared
Prosperity. "As The Wall Street Journal reported, President Bush ‘shows
the worst track record for job creation since the government began
keeping records' in 1939. The Bush administration created just 1.1
million jobs net, while the Clinton administration created 22.7
We can't afford to extend the Bush tax cuts for the 2 percent of
Americans with yearly income above $250,000 for couples or $200,000 for
individuals. And contrary to myth, the average small-business owner
makes a lot less.
Actually, fewer than 3
percent of taxpayers with any business income at all make more than
this - and many in that 3 percent are not small-business owners. They
include Wall Street investment partners, chief executive officers
getting paid to sit on the boards of other big companies and partners in
wealthy real estate or law firms.
Giving a tax cut windfall to the guys who made billions trashing our
economy and ripping off ordinary investors and pension funds by selling
worthless mortgages and derivatives is wrong. They were bailed out and
didn't even have the decency to thank us. Instead, they turned right
around and poured their profits into obscene paychecks, more speculation
and lobbying. And they're likely to do the same with their tax cut
money. Is that good for our economy?
When I look around, I don't see small-business development programs,
road and bridge repairs, public transit projects, libraries, schools,
job training, water treatment or health and safety inspections that
could be cut so wealthier people can pay less taxes. Do you?
This budget-busting tax giveaway to the rich is expected to add $700
billion to the federal budget deficit in the next decade. That's money
we need to invest in infrastructure, education, renewable energy and
It'll put people back to work today and lay a strong foundation for Main Street businesses and middle-class jobs in the future.
Those jobs are likely to mean more people walking into my store - and
into the neighborhood restaurant, realtor, grocery, auto dealer and all
the businesses that make up our Main Street economy.
Congress and President Barack Obama should extend the middle-class tax
cuts. But additional tax cuts for high-income households would be
Lew Prince is managing partner of Vintage Vinyl, an independent
music store in St. Louis. He is a member of Business for Shared