Noem, South Dakota Small Business Owners Discuss Impacts of President?s Proposed Tax Hike
Washington, D.C. ? Today, Rep. Kristi Noem hosted a roundtable with small business owners at Johnstone Supply in Sioux Falls to discuss the President?s proposed tax increase. In 2010, President Obama signed an extension of the 2001 and 2003 tax cuts for all Americans, calling it action that would ?protect the middle class? and ?create jobs.? Now, the President wants to increase taxes on individuals that make more than $200,000 per year and married couples that make more than $250,000 per year, a move that could cost South Dakota 2,200 jobs.
?The President talks about raising taxes on millionaires and billionaires, but his plan would actually raise taxes on small businesses in South Dakota and across our country,? said Rep. Noem. ?Ninety-five percent of South Dakota employers pay taxes at the individual rate, meaning this tax increase could impact them in a big way. These are businesses that pay the wages that allow hundreds of thousands of South Dakotans to put food on the table, pay mortgages and save for the future. South Dakotans already send enough of their hard-earned paychecks to Washington, that?s why I?ll be voting next week to extend tax relief for all Americans.?
Ninety-five percent of South Dakota businesses are classified as ?pass-through? organizations, meaning they are organized as an S corporation, partnership or sole proprietorship and file taxes at the individual rate, according to a 2011 Ernst & Young study. That?s over 73,000 businesses in South Dakota. Many of these 73,000 businesses will be subject to higher taxes under the President?s proposal. According to the nonpartisan Congressional Research Service, a tax increase on pass-through organizations could result in lower wages, scaled back benefits or reduced employment.
Rick Hull, owner and operator of Johnstone Supply in Sioux Falls, is concerned about what this proposed tax increase could mean for his business.
?This proposal shows me just how little our President and many of our leaders understand about small business in America,? said Rick Hull, ?My wife and I are owners of a small business. We live and breathe it every day. Our company is classified as an S Corporation, and we will be adversely affected by the President?s proposal. Last year, we bought new equipment and hired three new employees. This year, we?re hoping to invest even more in new trucks and new workers. We?re even discussing plans to expand. But increased taxes will mean our company will make fewer purchases, experience less growth and provide fewer jobs.?
Today?s roundtable was part of a national ?Stop the Tax Hike? day to get the facts out about the detrimental impacts of the President?s proposed tax hike. Nationally, this tax hike could cost 710,000 American jobs. In South Dakota, it could cost 2,200, according to a recent Ernst & Young study.
Next week, the House will vote to extend the 2001 and 2003 tax relief for all Americans.