Tuesday November 27, 2012 | 04:07 PM

WASHINGTON – Sen. Susan Collins, R-Maine, is reminding congressional leaders negotiating on the “fiscal cliff” about a bill she co-sponsored that would impose a 2 percent surtax on the wealthiest Americans while exempting many small business owners.

In a letter to Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ken., Collins said she is encouraged by recent statements from both sides as they work to avoid the tax increases and across-the-board spending cuts known as the fiscal cliff. Collins also said she believes there is bipartisan support for protecting small businesses.

“One way to ensure that small businesses continue to grow and hire new workers is to protect them from high-income surtaxes and rate increases,” Collins wrote. “Sen. Claire McCaskill and I have proposed such a ‘carve-out’ to protect small businesses in S. 1960, which we introduced last year. As you know, many small businesses file taxes as individuals and could, therefore, be ensnared by any surtax or rate increase aimed at high-income earners.”

The proposal by Collins and McCaskill, a Missouri Democrat, would impose a 2 percent surtax on those earning $1 million or more but would exempt small businesses that employ less than 500 people. Collins and McCaskill introduced the bill late last year as a way to avoid an increase in the payroll tax and to fund infrastructure projects.

Collins and other Republicans have expressed concerns about the impacts on small businesses from Democratic proposals to allow to expire tax cuts for those earning $250,000 or more. It is unclear how the “carve-out” proposal would sit with Democratic leaders and the White House, however, who argue that the recent elections made clear that Americans want wealthy America to pay more in taxes.

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Kevin Miller is Washington bureau chief for the Portland Press Herald and MaineToday Media. He has worked as a journalist in Maine for 6 ½ years, covering the environment, politics and the State House. Before arriving in Maine, he wrote about politics, government and education for newspapers in Virginia and Maryland.
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