KENNEBUNK — As a small-business owner, I recognize the importance of investing in Maine’s local communities.

Investments in our roads and bridges, clean water and air, quality education and economic development that puts good jobs first foster the conditions for businesses like mine to be successful.

The economic crisis may have started on Wall Street, but small businesses are the ones who took it on the chin. When millions of jobs went up in smoke, so did our customer base.

And to add insult to injury, those same Wall Street banks that caused the crisis and got bailed out with our tax dollars are now refusing to lend, creating a credit crunch for many small businesses that is slowing recovery. Now more than ever, we need investments in our communities to get people back to work with money in their pockets to go out and spend in the local economy.

Recognizing this simple reality, it is amazing to me that special interests are still trying to sell the tired idea of more tax cuts for the richest Americans.

It’s even more amazing that Washington politicians are willing to hold cuts for middle class and working families – like mine and my employees’ – hostage to hundreds of billions of special breaks for the top tax brackets. It’s infuriating that the champions of these backward ideas claim they care about small businesses.

When it comes to these tax cuts, let’s get a few simple facts straight: First, real small businesses across Maine – your corner bakery, your auto mechanic, your local flower shop – won’t pay a dime extra in taxes if the Bush-era cuts for the top two brackets expire on schedule at the end of this year.

Those cuts apply to couples with over $250,000 in income and individuals over $200,000. Only 3 percent of taxpayers with any business income earn enough to be in these top brackets, and that includes Wall Street hedge fund managers, real estate investors, Hollywood superstars and Washington lobbyists.

Last time I checked, these are not our nation’s job creators. The reality is that most small-business owners, especially here in Maine, are in the same tax bracket as the employees we work beside every day.

Second, it is the demand for our goods and services that prompts small businesses to hire more workers, not the tax rate. That’s a simple fact of running a business, small or large, and that’s why we need to focus on rebuilding our customer base, not on tax cuts for the super-rich.

Third, a slightly higher tax rate wouldn’t discourage the one out of 33 people with very high business income from reinvesting by hiring more workers or making other improvements – they’ll only pay taxes on the profits they take out of the business, not on earnings they plow back into it.

And fourth, the way income taxes work (with marginal rates), if we extend the cuts for middle class and working families under $250,000 a year, the rich will benefit from the full amount of those same cuts for their first $250,000 in income. Everybody gets this break.

I’m tired of having the good name of small business used as a pawn for proposals that benefit only the very richest fraction of Americans at the expense of everyone else. It’s time for an honest accounting. Using small business as cover for Robin-Hood-in-reverse tax cuts is cynical and it will hurt, not help, economic recovery. Mainers shouldn’t stand for it.

The real way to help small businesses is to allow these high-end tax cuts to expire. This will generate tens of billions of dollars each year – nearly $40 billion in 2011 and $800 billion over the next 10 years – that can be reinvested in real help for communities and hard-working people (owners and employees) – the real victims of the economic crisis.

With that kind of money, we can put hundreds of thousands of people back to work, and that will help restore our customer base.

Small businesses are doing our part. It’s time to restore responsible tax policies that support our local economies and make sure everyone’s contributing their fair share toward getting the economy back on track.

 

– Special to The Press Herald