Business for Shared Prosperity

By Kent Hoover
Portfolio/BizJournals  Feb 13 2012

Excerpt: The president’s budget would increase taxes by $1.5 trillion over the next 10 years. Obama once again called for increasing tax rates for households with more than $250,000. That would end “what was intended to be a temporary tax cut for the wealthiest 2 percent of Americans,” he said.

“Given where our deficit is, it's just a matter of math that folks like me are going to have to do a little bit more,” he said. ...

“The threat of higher taxes is weighing heavy on the minds of small business owners,” said Dan Danner, CEO of the National Federation of Independent Business. “They are trying to plan ahead, and as many are individual filers, their success could be their detriment if individual income tax rates increase.”

Jack Kintslinger, chairman emeritus of KCI Technologies Inc., has a different view.

“Most wealthy business executives I know are prepared to contribute more in taxes if the additional revenues are spent wisely,” said Kintslinger, a member of Business for Shared Prosperity.

Under the president’s budget proposal, households with more than $250,000 in income also would pay higher income tax rates on dividends and would face limits on the value of their itemized deductions. The estate tax would return to the higher rate and lower exclusion that was in effect in 2009.

Obama also proposed replacing the alternative minimum tax with his so-called “Buffett Rule,” which would require households making more than $1 million a year to pay at least 30 percent of their income in taxes.

As for business taxes, the managers of hedge funds, venture capital firms and real estate partnerships would face higher taxes because compensation known as carried interest would be taxed as ordinary income instead of as capital gains.

And while the president promised that he’ll unveil an overall corporate tax reform proposal in a few months, he didn’t wait to once again propose ending tax breaks for domestic oil and natural gas production.

Support for Entrepreneurs

The Small Business Administration would get a 3 percent increase in its budget, to $949 million, under the president’s proposal. Most of that increase would go toward subsidizing government-guaranteed loans to small businesses, which are experiencing higher default rates due to the slow economic recovery and depressed real estate values. Without an increased government subsidy, the SBA would be forced to increase fees on borrowers and lenders.

Even with the increased government subsidy, the president is proposing a $16 billion cap on the size of the SBA’s flagship 7(a) loan program. That compares with the $17.5 billion cap now in place, which the SBA reached last year thanks to temporary loan breaks—higher government guarantees and lower fees—that Congress passed to make SBA loans more attractive. ...

Kent Hoover is the Washington bureau chief for bizjournals.

Read more: http://www.portfolio.com/business-news/2012/02/13/obama-2013-budget-pitc...

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