The latest Obama economic plan regarding tax cuts will cause strife for small businessses, which will face higher taxes because of it. According to the Joint Committee on Taxation, more than half of small businesses will be affected in this way. The law is described as follows:
"Present law and the President's fiscal year 2011 budget proposals related to selected individual income tax provisions scheduled to expire under the sunset provisions of the economic growth and Tax Relief Reconciliation Act of 2001."
Read more about the details behind this plan here.
The Hill also covered the issue in a story today. Read an excerpt:
Hoyer said Speaker Nancy Pelosi (D-Calif.) and other top Democrats in the House are still discussing what the best timeframe for the extension would be, though the aide said a one-year extension of the middle-class breaks is off the table.
But Hoyer has also said it may make sense to let the tax breaks expire to help deal with the nation’s massive deficits, the aide said.
Republicans have pushed for the permanent extension of the tax cuts for all incomes, warning that higher tax rates would stifle the economy.
“I’ve never seen any real benefits from raising taxes,” said Sen. Orrin Hatch (R-Utah), a member of the Senate Finance Committee. “In fact I’ve seen just the opposite, real destruction.”
Obama pledged during the 2008 campaign to block tax increases on individuals making less than $200,000 and couples making less than $250,000, while allowing the tax breaks for upper-income earners to expire. But that pledge is running up against the country’s fiscal situation.
The federal deficit — expected to be roughly $1.5 trillion in both 2010 and 2011 — will bottom out at about $700 billion in 2014 before eventually rising again by the end of the decade, according to the administration’s own estimates.