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
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