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Small businesses need to stand together against new taxes

Recently, the National Federation of Independent Business/California and the Howard Jarvis Taxpayers Association issued a joint letter to state business leaders, organizations and owners, calling upon them to unite in opposing Gov. Jerry Brown’s and other recent tax proposals. As a small-business owner, I completely agree that everyone who is a business owner and taxpayer in our state should stand together in opposition to yet another attempt to raise taxes and place more burdens on the backs of California’s job creators.

Let me highlight a few facts from the letter. California has clearly been mismanaged in this problem, and once again politicians in Sacramento are looking for business to bail them out. Let’s not forget:

· California has the third highest income tax in the nation. Even worse, the 9.3 percent tax bracket starts at $46,349 for people filing as individuals. We also have a punishing 10.3 percent tax rate on income more than $1 million.

· We have the fourth highest capital gains tax at 9.3 percent.

· California has the second highest gasoline tax (averaging 65 cents/gallon) in the nation.

Some fancy calling an income tax hike a “tax on the wealthy,” and while that may have a populist appeal, let’s remember that small-business owners will be hit especially hard because many file taxes as individuals. And a higher sales tax will needlessly inflict even more harm on California consumers who are also the employees and customers of the business community.

Opposing taxes is crucial if businesses and jobs will get moving again in California. How long must we be the laughingstock of the country and world? Reforms are also needed, and this tax increase contains no measureable reforms. Even if those in the business community were to consider higher taxes, they need to know that government will rein in out of control spending — much like business owners do during tough times. If the system isn’t fixed, we just keep putting good money into something that clearly isn’t working.

When will our government in California realize that within any budget, we must only spend what is coming in? This is what every business does to succeed (not to mention individual family budgets). We have to live within our means and stop forcing business to pay for things our state government has put in place, which, I might add, can be been done better and cheaper by private businesses and without the threat of a strike or work stoppage.

Nobody wants to let employees go or cut back on wages or benefits, but when a company goes from $16 million a year in sales down to $2 million in a year because of the economy, it is forced to do what it takes to be able to survive. If it doesn’t, the company goes bankrupt, and the jobs could be lost forever.

We as individuals and business owners know this hurts, but it is what must be done. Our leaders in the state capital must do the right thing and quit spending and find smarter and better ways to accomplish the same tasks. Utilize small businesses versus penalizing them. Cut the layers of government and get business involved so that the same job can be done with less cost and more efficiency. This would help create more jobs and reduce the need for more taxes at the same time.

I urge every business owner, leader and organization to join the National Federation of Independent Business and the Howard Jarvis Taxpayers Association in strongly opposing any new taxes that will put more Californians out of work and take our local and state economy down an even darker road. Government has given us no confidence that they won’t continue to spend our hard-earned tax dollars recklessly or come back for more. This isn’t Chicken Little — it’s a daily reality in every California community.

Schumacher is on the NFIB/CA Leadership Council and is the owner of U.S. Technical in Fullerton. NFIB is the nation’s leading small-business association, with offices in Washington, D.C., and all 50 states. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their businesses.

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1 UserComments
Richard Rider 5:04pm February 28, 2012

Minor correction: CA now has the SECOND highest income tax in the nation (Oregon's millionaire's tax expired). If any of the three massive income tax increase props pass in November, we'll jump way out front to numero uno -- in one case we'll be almost 40% higher than any other state. Meanwhile several other states are looking to reduce and/or totally phase out their state income taxes -- joining six state that already have no such tax. All such states eagerly look forward to California's suicide tax increase.