Tax policy

Small businesses are critical to our economy. In fact, they generate, on average, 6 in 10 net new jobs. Fortunately for our leading job creators, Congress took an important step at the beginning of the year to protect them and their core customer base by extending income tax cuts for the middle class, as part of the fiscal-cliff deal. But lawmakers now have another economic obstacle in their path: the sequester — a host of automatic spending cuts that began March 1 because lawmakers couldn’t agree on a deal to reduce the deficit. These across-the-board cuts could have dire consequences for the economy and small employers. But all is not lost. There are still some areas in the budget where Congress can quickly pick up revenue to avoid the bulk of the cuts.

Small business owners make hard decisions every day. They compromise on things they sometimes wish they didn’t have to, but they do it for the good of their business, their employees and their families. They do it because they have to if they want to continue running a successful business.

John Arensmeyer

Original statement issued Jan. 1, 2013:

The small business community and the nation breathed a sigh of relief today as lawmakers reached a bi-partisan 11th hour deal to avert the “fiscal cliff,” while taking significant steps to reduce our budget deficit. However, more work must be done to put our country on a responsible path toward long-term economic growth and fiscal sustainability.

As Fairfax, Va., small business owner Mike Brey prepares to close the books on 2012, he’s also starting to make expansion plans. But he hasn’t sealed the deal on his two new Hobby Works stores yet — largely because of growing economic uncertainty as we race toward the edge of the “fiscal cliff.”

The politically charged debate over high-income tax cuts is reaching a fever pitch, and the question on everyone’s lips is whether small businesses’ hiring ability will suffer if these cuts expire. Scientific opinion polling released last week shows what real small business owners think, and it might surprise you. The majority of small employers in the poll — more of whom identify as Republican than Democrat, an important distinction given the partisan nature of this debate — believe allowing tax cuts for the wealthiest 2 percent to expire at the end of the year is the right thing to do in light of our budget crisis.

Our nation’s smallest businesses—those with 1-49 employees—continue to outpace large businesses in the race to put America back to work. Businesses with fewer than 50 employees created more than half of all new jobs last month, and, from April to May, they boosted the actual number of jobs they generated by 16 percent, according to data released Thursday by Automatic Data Processing, Inc (ADP). Small businesses overall accounted for more than 93 percent of all new jobs last month, while large businesses created just 6.8 percent of new jobs.