October 18, 2010

Idaho Small Businesses Tell Crapo They Are Ready to “March On Washington”

Taxes, job-killing policies have put business in hiring holding pattern

Boise - Idaho small business leaders told Idaho Senator Mike Crapo today that they are ready to "march on Washington" to get assurances that job-killing taxes and regulations won't increase next year. A roundtable of Idaho small business leaders convened by Crapo was unanimous in saying that new hiring is off the table until business owners have certainty about the tax and regulatory future of the nation.

Crapo, a member of the Senate Finance Committee, which has jurisdiction over tax issues, called the forum to hear directly from business owners on what will happen if taxes go up at the end of the year. Under current law, unless Congress acts in the "lame duck" session next month to stop increases in tax relief approved in 2001 and 2003, every American worker will see a smaller paycheck beginning in January, as the government will be required to withhold a greater portion of their salary, based on the new higher tax rates scheduled to go into effect. Even if only the top income brackets are involved, those taxes will affect 50% of all small business income in America, and business owners say that affects job decisions.

"I have room for growth, but I'm staying right here," said Sylvia Hampel, president of Clearview Cleaning, a Boise-based firm that has expanded to four states and created 130 jobs. Hampel, the Boise Metro Chamber of Commerce's Small Business Person of the Year for 2010, says increases in taxes and health care benefits could end her plans for future growth. "My only option now may be to make everybody part-time," she said, concerning the possibility of higher taxes and health care benefits that she would be responsible for.

"It's a death knell for an economy when entrepreneurs are saying that," responded Dan Long, who heads the business consulting firm Sandbox Group, and was the SBA's Small Business Person of the Year when he owned and operated A-1 Plumbing in Boise. Long cited a recent report from the Heritage Foundation that tax increases could cause the loss of 3,400 jobs per year in Idaho alone "isn't even close," because those numbers could be higher. He added, "We need to get small business marching on Washington and say 'baloney'."

"Americans and business are facing the largest tax increase in our country's history," noted U.S. Chamber of Commerce Northwest Executive Director Renee Sinclair of Seattle. Sinclair noted some business taxes could rise more than 100%, capital gains for investments could jump 33%, and nearly everyone could feel the effects of increases in marriage tax penalties and a 50% reduction in the child tax credit. "At what point do you say 'enough is enough and I'm not going to take it anymore'," agreed Idaho financial planner Dave Petso of Petso Financial. "I can't say that I've ever made decisions based on taxes, but the real problem is the bottom has fallen out," noted Kent Mills, owner of Inteframe Components, LLC, of Nampa.

The Chairman of the National Federation of Independent Business' (NFIB) Leadership Council for Idaho, Billy Knorpp, related his conversation with a North Idaho restaurant owner who wanted to build two new restaurants and add jobs: "Why would I move forward now, when the entire results of my work would be taxed away," Knorpp said of his client. Another restaurant owner, Chef Lou Aaron of Westside Drive-in in Boise, said he was concerned for his "family" of employees who will face higher taxes and costs as the new regulations and restrictions in the health care bill continue to be implemented. Aaron, also a leader at the Idaho NFIB, said new regulations could add $4,000 to his accounting bills. He, like many members of the panel, said the federal government just doesn't understand that less government means private business can flourish.

Crapo agreed, "Right now, the President and the leadership in Congress believe that the government creates jobs and there must be a government solution." Suzi Budge, the executive director for NFIB in Idaho, "Uncertainty is killing the entrepreneurial spirit of our small businesses."