On Wednesday, the House of Representatives passed the Job Protection and Recession Prevention Act of 2012. I voted for this piece of legislation, because it will protect American taxpayers from a $4 trillion tax hike in 2013 as a result of the fiscal cliff, and protect job creators like small businesses.
Stopping the tax hike is not just about raising taxes, it's about jobs. Small businesses have been responsible for about two-thirds of new U.S. jobs created.
Raising taxes on what some may call "the rich" may make a great headline, but it will hit nearly one million small businesses known as pass throughs, like partnerships, LLCs, S Corporations, and sole proprietorships. This is because these employers tend to file their business income on their individual tax return. Not only will this tax hike result in less investment and lower wages, but it will also destroy another 700,000 jobs.
Income taxes aren't the only tax hike small business owners are facing. The estate tax is scheduled to jump 20 points from 35 percent to 55 percent, and will begin hitting businesses and farms at $1 million--instead of the current $5 million exemption. When we think of small businesses we don't always think of family farms, but if the estate tax reverts back to $1 million dollars it will affect 24 times as many farmers as it does today--potentially bankrupting thousands of them.
In Kansas, we take that number seriously. In the second district alone there are 20,000 farmers, and hardly any are millionaires, but the average family farmer could easily hit that $1 million mark when accounting for the value of their land and basic farm equipment.
Raising taxes on job creators will harm our already fragile economy, while the Congressional Budget Office predicts avoiding the fiscal cliff could add 2-3 million jobs next year alone. Extending current rates will buy us time to plan for comprehensive tax reform, without risking thousands of jobs and another recession.