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Small businesses on the payroll tax cut
Whether or not Congress decides to extend the payroll tax cut, the uncertainty could affect small businesses.
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Kai Ryssdal: After teasing us yesterday, Republicans in the House made good on their threats over the payroll tax cut today. They voted down the Senate's two-month extension of the tax break and of unemployment benefits.
We were trying to figure out a way to cover this story that wasn't just who did what to whom, so here's what we did. We called some small business owners and played 'em this piece of tape. Speaker of the House John Boehner yesterday, laying out what's been the Republicans' stated reason for voting no.
John Boehner: A two-month extension creates uncertainty and will cause problems for people who are trying to create jobs in the private sector.
And then we asked business owners whether that was true.
My name is Tim Reynolds, I own Tribute Inc.; we're a software development firm in Hudson, Ohio. I think it's an example of the uncertainty that Congress in general, and for that matter, the administration has created over the last several years. I think that he's right that a two-month extension is essentially meaningless, both to employees and to employers. I don't know what the answers are. And I'm not particularly partisan; I think the political finger-pointing is very childish. I'd like to knock heads, you know, and say OK, sit in a room and figure it out.
My name is Viki Honeyman, I own a gallery gift shop in Ann Arbor, Mich., called Heavenly Metal. I actually am the main employee; I do everything, and then I have a handful of part-time people. All of the uncertainty in Washington is hard for small businesses because we're at the bottom of the feeding pool. And all of these decisions, especially what affects us tax-wise, what allows us to either hire or lay off people or invest more money into our businesses, is so much determined by how Congress and the Senate votes. So it's frightening, absolutely.
My name is Peter Rossing, I own Muse Art and Design in Portland, Ore. We are a small art supply store; we have, in addition to myself, three employees. It's really not -- in my case, as a small business owner, I stick to my plans on what I need to do to serve my customers and keep my employees going sort of regardless of immediate uncertainty or changes.
Back to Viki Honeyman in Ann Arbor, Mich., for a minute. Forget tax policy, she told me. What she really needs, Congress can't give.
Honeyman: Well, we need it to snow. Seriously. Tomorrow's supposed to be close to 50, and in order to get people out really in the Christmas mood, we need winter weather.
Peter Rossing and Viki Honeyman are part of the Public Insight Network. If you are a business owner, share your story with the Public Insight Network here.
Republicans insist that the two month extension of the payroll tax cut is bad for small businesses, the job creators, because it causes uncertainty as to whether the cut will be extended further. I'm still waiting to hear how the tax cut, which affects only the employee portion of Social Security, can leave employers uncertain. Businesses should be in favor of anything that puts more money into the paychecks of their employees, whether it's for 2 months or 12 months.
I also agree with kandcats - the essential fact that the proposed tax cut extension does not apply to the employer portion of payroll taxes was apparently missed by the reporter and by the business persons interviewed for the story. In reporting a story like this, I would think that your first step would be to understand who is affected by the tax cut. Recruiting representatives from small business to voice their opinions implies that they are a target of the tax cut, when they are not (other than indirectly, where retail business customers would have a few more dollars to spend).
Meanwhile, I'm still trying to figure out how the party which ALWAYS favors tax cuts, even when they risk lasting damage to our country's fiscal stability, has managed to rationalize opposition to this relatively modest proposal.
This story is a prime example of what's wrong with journalism today. Rather than examining the House Republicans' explanation for their decision to block an extension of the payroll tax cut (that businesses won't hire new employees unless they know whether the employee will have a small tax break for 2 or all 12 months next year), Kai Ryssdal found several small business owners who mindlessly echo the explanation. This is not only fatuous but--assuming that Mr. Ryssdal is at least slightly better informed than his interviewees--deeply dishonest.
This story is a prime example of what's wrong with journalism today. Rather than examining the House Republicans' explanation of their decision to block the extension of the payroll tax cut (that business won't hire new employees if they can't be sure whether the employed will a modest tax break for 2 or 12 months next year), Kai Ryssdal finds several business owners who mindless echo this illogical explanation. On top of that, he frames the story as not taking a side on the issue. The honest introduction would be "We were actually able to find small business owners who actually accept the House Republicans' explanation!" As it stands, this story was not just fatuous but dishonest and manipulative.
I found the small business take on this interesting since the "payroll tax cut" itself does NOT impact the cost to business. It is only a reduction in the amount employees pay toward their portion of Social Security. Also interesting is that little mention is being made of the fact that the cut is indeed a cut TO Social Security funding. My question to you & Congress would be, if the "cut" is "being paid for" from other sources (the primary discussion point in Congress) are the monies from those sources being put back into the Social Security "pot" or just the "budget" (whatever that is)?
I tend to agree with Biltimore. I owned a small Engineering fimr for 30 years with about 10 employees. All of my decisions, as far as hiring, expansion,etc were base on business, not on tax breaks. I do have one pet peeve, I often run into and that is people who say theyare small buiness owners and are the one emploeye with several part time employees. From my experience this almost always means contract employees. When I first started my business I would hire a contract employee rather than a new permanent emplyeee . It just did not work out. They have no loyalty, miss assignments, and are alswyas looking for a real (permanent) job. I think the people who employe only contract employees are doomed to failure. If they do not want the bother and expense of having a permanent employee who they will have to schedule work for, rather than just have someone come and go at their whim, they will probably do the same thing with their marketing and gaining new business. In my opinion. they are amateurs and should not be considred small business owners.
Forget Washington, turn off the TV! Small business should focus on their customers and provide the products and services that people want. The shopping malls around here are full and people are buying for the holidays. If big gov wants to help, lower the employers portion of the payroll tax, and state and local governments should stop looking at sales taxes as their "entitlement ".
I think Karl Rove has petitioned the BBB to insist that small business owners tow the line. COME ON if these payroll tax et al decisions or lack of decisions are influencing your business practices (Hiring) you need to find a different career. You hire when business is good and you need help...you let go when business is down and you don't need all this help. GIVE ME A BREAK!
