Johnny Isakson: “if the distinguished whip will remain on the floor for a second, as I was passing through listening to his speech, I…”

“if the distinguished whip will remain on the floor for a second, as I was passing through listening to his speech, I wanted to add some meat on the bones of this business of passthrough income and the 940,000 American small businesses that will be affected dramatically by the President's announcement today. For 22 years, I ran a subchapter S corporation. A subchapter S corporation passes through its revenues to its investors who pay it at the ordinary income tax rate of an individual. Now, $250,000 is not an inordinate amount of a number for somebody to have passed through to them in the ownership of a subchapter S corporation. I passed the money through and paid them back based on the investment they made in the company I ran. When you raise the tax on the individual rate, then for a subchapter S corporation and limited liability corporation, for a limited partnership, you have two decisions to make as the runner of that operation: Do you reduce your retained earning investment in your company to maintain the return to your investors at the same level or do you continue to wind your company down because you cannot distribute at the rate you used to distribute? It is very important to understand that whichever decision you make has a direct negative impact on future hiring in that company. The Congressional Research Service estimates 940,000 businesses will be affected. But listen to this number.…”