A recent opinion piece, “Creating a small business tax loophole would only serve millionaires,” wrongly suggests that a proposal by Sen. Susan Collins to impose an additional tax on millionaires and billionaires is a giveaway to the rich.

As a small business, Arundel Machine has focused its last 10 years on business growth.

This means putting more Mainers to work.

In 2012 alone, we have hired 14 new employees.

Our company, not unlike other small businesses in Maine, looks at every dollar available to reinvest as both precious and critical to our and our employees’ continued success.

We also see the impending “fiscal cliff” as a threat to our very economic future.

Now is the time for political ideologues to yield in deference to pragmatic leadership.

Maine, once again, will lead the way.

That’s why I applaud Sen. Collins for having the courage to recognize that during these tough economic times, the very wealthy can afford to pay a little more in taxes.

She has proposed a 2 percent surtax on incomes over $1 million.

The revenue generated with this modest surcharge will be a first step toward closing the ominous debt facing our country.

Spending reforms, including a hard look at entitlements and embedded inefficiencies spread across a myriad of government programs, is the next hard step all of us must take together.

Ensuring these next hard steps do not handcuff small business — the lifeblood of this state’s and our county’s economy — should be of primary concern.

Sen. Collins’ plan protects small businesses from tax increases.

She understands how critical this is if we want them to create jobs.

The fact is, most small businesses are “pass-throughs.”

This means they do not pay taxes directly, but instead report their earnings on the individual income tax returns of their owners.

While the pass-through system has many benefits, it also creates the wrong impression that small business owners are “rich,” since business income is reported on the owners’ 1040 forms.

That is why Sen. Collins’ proposal to create a surtax on individuals with incomes over $1 million also contains a very targeted “carve-out” to protect these small businesses.

Her carve-out only applies to small-business owners who are active in the management of their business.

Owners of large businesses and passive investors won’t benefit from the carve-out.

This is important to note.

IRS data shows that while individuals earning $1 million or more as a group receive $1.4 trillion in annual income, less than 20 percent of that income is pass-through income from businesses.

An even smaller percentage is received by small-business owners who are actively engaged in the management of their companies.

It is only these small-business owners who will be protected by Sen. Collins’ carve-out.

The writer of the op-ed article misses the point.

The question isn’t whether many small businesses will escape the president’s tax hike.

The question is, what happens to the small businesses that would get hit by higher taxes?

There are literally millions of very small businesses in America with less than a handful of employees.

They are too small to be hurt by the president’s tax hike.

But small businesses that are just a bit bigger would be hurt.

These are the businesses we count on to create most of our nation’s new jobs.

Why would we want to hurt our nation’s job creators when Sen. Collins’ proposal could protect them?

Now is the time to address the country’s financial challenges.

Spending reforms and revenues generated by amending tax rates will help.

A vibrant and surging economy led by small business is the best tool to move the country towards deficit reduction.

Sen. Collins’ proposal strikes the proper balance by increasing taxes on the wealthy while protecting small businesses.

It is an idea worth embracing.

Sen. Collins’ plan protects small businesses from tax increases. She understands how critical this is if we want them to create jobs.

Patrick Shrader is vice president for sales/marketing at Arundel Machine.