Lower taxes not solution to all ills


David Epps’s column called “an oppressed minority” is an example of how ideology can get in the way of rational thinking. In this case, it’s the ideology of less government. While it is certainly true that small businesses are having a hard time, his assessment of why and what to do about it is not well founded.

To begin with, the (few) facts he uses to make his argument are not accurate. He talks about a business owner having a hard time making ends meet by saying, “the taxes on her family business are slated to increase by 10 percent. ‘Income is down, taxes are up. It doesn’t look good.’”

In reality, the only tax rate going up 10 percent is the marginal rate on income over $200,000. This, of course, would not impact a small business owner that is having trouble making ends meet.

The taxes that really hurt troubled small businesses are not income taxes – they are taxes that are part of fixed cost, like payroll taxes and property taxes. And, there has been some effort to help small businesses here.

For example, the HIRE Act that was recently passed provides an exemption from the employer’s portion of Social Security tax through the end of the year for any businesses that hire individuals that worked no more than 40 hours in the 60 days prior to hire.

There are also significant job creation programs for small businesses that have recently been funded with ARRA money. For example, the small business I run received a grant to administer a revolving loan fund to install energy efficient lighting in convenience stores throughout Georgia.

There is also a program that will pay 80 percent of the wages of a new employee through September 2010 if the hired employee has a dependent child and has earned less than 300 percent of the poverty level.

The irony in Epps’s article lies in the true cause why small businesses are having such a hard time. As we all know, the true cause is what has now been termed “The Great Recession.”

But, what caused The Great Recession? Was it businesses being “regulated and taxed to death”? No, the root cause of The Great Recession was a failure to adequately regulate predatory lending practices of the sub-prime mortgage industry and the financial products industry.

We are paying for the blind application of the less government ideology that started in the Reagan years. And what does Epps suggest as the solution to our problem? Less government.

Reminds me of the old adage: When you are holding a hammer, everything looks like a nail.

Ed Outlaw

Peachtree City, Ga.