Chuck Grassley: “Accelerating income tax relief: Approximately 85 percent of small businesses file their tax returns as individuals. An…”

“Accelerating income tax relief: Approximately 85 percent of small businesses file their tax returns as individuals. An increase in tax refunds means small firms will have more resources and more capital to put back into growing their businesses. A series of studies by four top tax economists examined the effect of tax rate cuts on sole proprietors. Their results indicate that a 5 percent point cut in rates would increase capital investment by about 10 percent. And, they found that dropping the top tax rate from 39.6 percent-- -- Where it was up until the year 2001---- to 33.2 percent would increase hiring by 12.1 percent. What these small business groups said was their tax policy priorities included a reduction in the top marginal rate. It is right there in their letter. Now let's think about this. As the small business folks say in their letter, there is a link between tax relief, economic growth, and jobs. We have seen the evidence of that linkage over the last year or so. Check out the economic statistics. The tax relief kicked in, the economy started growing, and jobs started coming back--1.2 million jobs in the last 5 or 6 months. Why would we want to reverse the course? Some would speculate that for the minority party, it is good politics for the economy to go into the tank. Raise taxes as the economy is coming back, and you stifle economic growth. If economic growth is stifled, then jobs disappear.”