By Stephanie Lulay
Area business owners had a message for Congress Friday -- looming tax hikes coupled with uncertainty in Washington, D.C., will make it impossible to plan for growth and new hires.
U.S. Rep. Judy Biggert, a Republican from Hinsdale, joined Aurora business owners and Aurora Regional Chamber of Commerce representatives at Alarm Detection Systems offices in Aurora for a roundtable discussion on the potential impact of automatic tax hikes.
The scheduled expiration of the 2001 and 2003 tax cuts on Jan. 1, 2013, would mean families and business owners would face a return on the marriage penalty and higher tax rates on income, capital gains, dividends and estates, Biggert said. The House is slated to vote next week to stop the Jan. 1 tax hikes.
Earlier this week, the Senate voted to allow automatic tax increases on families and small businesses earning more than $250,000.
"Many small businesses are struggling to stay afloat, and raising taxes during this fragile recovery would be the worst thing to do," Biggert said. "(Getting rid of) the individual tax credit really is going to hurt small businesses."
Kevin Podraza, who owns S&S Metal Recyclers II in Aurora, said purchasing the family business from his father has meant he's made less money as owner than when he was an employee. The company employs 30 people.
"There's no incentive for me to grow when the overall profits of the company are going to stay the same," Podraza said.
Ed Bonifas, vice president of Alarm Detection Systems, said people making more than $250,000 are often small business owners.
"We run a small family business here. We've got 250 people here who have jobs because we're able to hold on enough and reinvest and have a little bit of growth and hire new people," Bonifas said. "It would be really easy to be idle rich and sit home with investments in the market. (Instead) we take it and reinvest in our business."
Ken Knight, Caterpillar's manager of integrated manufacturing operations, said the uncertainty of the tax code makes it difficult to put together multi-year business plans.
"We are a major employer in the U.S. We plan to grow in the U.S., so we need certainty in our tax codes," Knight said.
Mike Krzus, a financial advisor with BMO Harris Investment Services, said his clients express frustration with what's going on in D.C.
"Let's make it a permanent (tax rate) instead of shooting for extensions," Krzus said.
Biggert said her goal is tax reform.
"I don't really care how long (the tax cut extension) is as long as we can get to reform as soon as possible," she said.
The Aurora Chamber event was part of a national "Stop the Tax Hike Day." U.S. Chamber of Commerce manager Cholly Smith said members of Congress across the country visited local workplaces on Friday ahead of next week's vote.