She Knows That Under The Proposals, Any Kind Of Mandation, Any Taxes, Any Penalties That Would Be Incurred

Floor Speech

BREAK IN TRANSCRIPT

Mr. POLIS. Sometimes there is common sense that we share across the aisle. I have said from the start, I think this surtax is a bad idea.

To explain it, there is a set tax structure for those of us who haven't--and I have run small businesses, created over several hundred jobs. There is C corps, S corps, and LLCs. When we are talking about increasing this rate, this is the rate that affects S corps and LLCs. Those tend to be the small to midsize businesses, the backbone of America, a lot of family businesses, a lot of stores. I talked to a brewery in my town, those are the types of businesses that we are talking about.

The big corporations pay a tax rate of 35 percent. That is the corporate income tax rate. Currently, the marginal rate for these S corps and LLCs is also that same 35 percent. Now it's scheduled to go up, that rate for S corps and LLCs anyway, because the Bush tax cuts are set to expire.

Now, I support that. I expect that you might oppose that, but that will raise it to 39.6 percent. It is that very same rate that this surcharge is scheduled to impact that would increase it at the margins an additional 5 percent. It would actually go up to 44.6 percent. In many States, that means that small businesses would be taxed at above 50 percent.

Now, I am hopeful that in the final version they will make some adjustments to that surtax. I sure hope they do. But I think it's an excellent point to bring up to show this disparity between what large businesses and corporations are paying, 35 percent, and what our family-owned businesses and small businesses are paying, which could, under the taxation mechanism, be a higher one.

Now, there are several ways to address that. We could, of course, reduce the cost of the bill, and I hope that that's a path that my party takes. There also are alternative payment mechanisms out there, some of which have been discussed in the Senate, some of which have more bipartisan support. I think it's critical, particularly in a recession, but at any time, that we make sure that however we pay for health care is not harmful to small business, which is the goose that laid the golden egg and the job engine that will lead us out of this recession.

Mr. COFFMAN of Colorado. In this proposal, that it is not--I think the Congressman well-stated it as to the issues on the income tax and that this is an additional burden, but this is on the payroll tax. This is a payroll tax. This is whether or not the business is profitable.

The business could be hit hard, could be stressed, losing money, trying to keep his doors open. If it cannot afford health care, then it will be hit with an 8 percent surcharge of its gross annual payroll.

We also have Congressman Rob Bishop. I yield to Congressman Bishop to address this issue.

BREAK IN TRANSCRIPT

Source