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Forbes: A Guide to Understanding the Fiscal Cliff

5. More Specifically, What Happens to Business?

Already, anxiety among business owners is growing. The expiring tax cuts, many of which directly affect businesses, would restrain investment and hiring. (An Ernst & Young report estimates 2.4% less investment and 710,000 fewer jobs.)

Another perspective: Consider that 75% of all small businesses, the key drivers of the U.S. labor market, are organized as pass-through entities. This set-up means those owners pay their business income at the individual rates. Those tax rates are set to rise. The lowest tax rate would go to 15% from 10%. The rest: 28% from 25%; 31% from 28%; 36% from 33%; and 39.6% from 35%.

Source: U.S. Chamber of Commerce Small Business Outlook Survey (Q3 2012); National Federation of Independent Businesses

(AP Photo)

More from Forbes:
Do You Have Enough Money to Retire?
How to Negotiate a Year-End Raise
The Best and Worst States for Retirement

The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.

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