I had hoped to increase the size of my company starting in 2013 but if the law passes and those earning over $250,000 annually pay increased taxes, I will opt not to do it. There is no point in killing myself to grow my company only to give it to Obama for increased federal spending.
Efrain Gonzalez (Denver, CO) Veritec, Inc. -12/4/2012
I am president and co-owner of an S-Corp providing advanced lightweight polymer and composite materials used in a variety of industries from aerospace to automotive. The President's plan for tax increases will significantly impact our company's growth and financial health. Since founding our company 10 years ago we have grown from 2 to over 20 employees through reinvestment of any profits into manufacturing equipment, quality people, and employee benefits. Higher taxes mean less cash to reinvest - simple as that. We won't be hiring more people and we won't be purchasing equipment to expand the company. This is not complicated, higher taxes retard economic growth.
David Curliss (Dayton, OH) Performance Polymer Solutions Inc. -12/4/2012
I own an S-Corp that designs, installs, and commissions systems that provide cell phone and radio coverage inside of buildings. We have been doing this for 12 years and finally reached the 250K profit margin that the President doesn't like. We used the money to pay off the loans that we had to take out to keep operating in this recession and keep our 6 employees hired. As a result, I am paying taxes as if I made more than 250K, but really only paid myself 70K. The result is we are broke, but I feel like I am being punished for working hard. It is hard to describe.
Mike Tackett (Littleton, CO) BTS Wireless, Inc. -12/4/2012
My small business just turned 10 years old. I am an electrical distributor specializing in wire and cable. I am an S-Corporation. The new taxes will keep me from hiring this year, even though I could use another employee. I pay more in taxes already than I take home. I, like many other small business owners, reinvest in the company and employees rather than taking the money for personal use. The new taxes are going to be very hard on my company. We cannot afford any more taxes or restrictions.
Kim Irwin, President/Owner, (Huntington, WV) Integrity Wire Inc. -12/3/2012
We own a small federal contracting company that is an S corporation. All of the company's net income is passed through to its shareholders. We must then report the income on our own individual income tax returns. This is preferable to being a C corporation where the profits are taxed twice. But it also means that if the federal government raises our personal taxes, we have to pull additional money out of the company to cover the tax hit. That money is therefore no longer available to hire, to pursue innovations, or invest in equipment/software that position us to go after bigger opportunities. And make no mistake, you need working capital to hire employees... firms billing on a Net 30 basis need enough capital to cover at least two months of payroll for each new employee they want to hire. The bottom line is unmistakable: every extra dollar that is pulled out to cover higher taxes cannot be used for reinvestment or hiring.
K Kane (Los Angeles, CA) Kane Federal Services, Inc. -12/3/2012
Yes, I had to pay taxes on $250K of income last year, but very little of that went into my personal bank account -- and I was working a full time consulting job last year in addition to managing our small business (because our small business can't afford to pay me enough). We certainly are not RICH and we work a lot more hours than most people work to earn what we have. The profit we earned from our small business went back into the company to fund payroll and other investments for our growing business. If we don't grow, we'll go out of business. There is nothing quite as frustrating as having to pay taxes on money we don't actually have in hand. We're already working on a plan to keep our profits under $250K -- until Congress realizes that this type of policy is preventing small business from retaining the profits they need to reinvest in themselves and grow.
Kathy Rainbolt (Palestine, TX) Pentecom, LLC -12/3/2012
Our business is in the manufacturing services sector. I am constantly marketed to by foreign countries (Mexico, China and others) to relocate our facility to take advantage of the lower costs of doing business. We face many obstacles that our foreign competitors do not: stricter regulations, more reporting requirements, high workman compensation rates, payroll/social security/Medicare taxes, higher insurance requirements, and much higher income taxes. Raising taxes yet again will be another reason why companies will choose to locate outside of the United States and this policy will probably have the effect of lowering the overall revenue collected by the government.
Fred Schmidt (Los Angeles, CA) Prime Plating/Prime Plating Aerospace -12/3/2012
The Fiscal Cliff, i.e. higher taxes, along with ACA is the only reason we decided to back off constructing a new building and expanding our business. The President thinks that those making over $250,000 can do more than we already do. First, how about the fact that I provide good jobs for over thirty people with benefits. Second, I don't believe that there are only 2% of small businesses that fall into this category. I would say most small businesses are S Corporations which means that company profits flow into their personal incomes. In my opinion, the President's plan is a perfect disincentive for companies to be more profitable and successful.
Clifford Laverty (Tulsa, OK) Total Radio, Inc. -12/3/2012
My salary is not $250,000 but my taxable income is in excess of $250,000.00 as my K-1 from my company puts me above this threshold. I receive a monthly distribution from the company that is to provide me with the necessary funds to make my quarterly tax deposit. By increasing the amount of taxes distributed out of the company to pay my taxes it will leave me less money to use in the operation of my company. The two real discretionary items I have each year are our profit sharing contribution and raises. I will not lower the profit sharing contribution but will lower raises to offset the amount the government is taking. This is just another example of the middle class getting crucified at the expense of the federal government wanting to waste more of our money. It needs to STOP!
Tom Secor (Norwalk, OH) Durable Corporation -12/4/2012
We have done an analysis on the impact of tax increases and the impending "Obamacare" and have decided to shut down our business. We are on the knife's edge of the $250,000 limit and simply cannot afford any more taxation. We are already overburdened by taxes, insurances and escalating supply and fuel costs. And we do not trust government to get us out of it, since they don't operate like a business must, even now.
Cynthia Ashby (Milan, PA) Horizon Fencing -12/4/2012
My perspective on the fiscal cliff is two-fold. I'm a small business owner, although my company is just under the cusp that will feel the impact if the President's plan goes into action. Sadly, what's holding us back from growing our business is the increase in taxes that we'll get hit with if the President succeeds in his quest to "tax the rich", as well as the absorbent number of new taxes being implemented by the healthcare law. The numbers just don't pan out beneficial for expansion. We're not going to invest company resources to work longer hours and earn less.
Kathleen May (Portland, OR) Northwest Alliance Group, Inc -12/4/2012
We are an 8 year old C Corporation that, after building a successful services business and operating model in an industry with already thin margins during a challenging economy, is now facing punitive taxation for our years of effort and self sacrifice. Before seeing the purely political interaction following the election outcome we were optimistic about the future and excited about looming opportunities. We were poised to purchase up to ten vehicles in 2012, hire additional staff and leverage our technical expertise in increasing our market penetration while expanding into vertical markets. Now, due to all the uncertainty, all of our growth plans are on indefinite hold. In fact, retraction may become the more fiscally responsible and prudent course to follow depending on the taxation enacted.
Richard Harris (Glen Burnie, MD) Light House Communications Corp -12/3/2012
My wife and I have a small rental property business. This past year we have not taken one dime from the company. We reinvested all the profits back into the company in order to grow and expand the company. The Bush tax cuts have let us expense equipment and materials vice amortization, hire more employees, and make more long range improvements and purchases. If we have to convert some of these profits to taxes, then we will convert full time labor to more temporary lower wage labor and services, we will buy less materials and supplies, we will stop growing and cut back on long range improvements, and we will make sure the business earns less than $250K.
Clifford Wilkening (Alexandria, VA) Wilkening Rental Properties, LLC -12/3/2012
I own and operate a small chain of preschools. I am a Sub Chapter S-Corp. Any tax increase will force me to cut the payroll and benefits of very hardworking teachers as my primary source of new revenues. If this Congress and President do not take action and change course I will be forced to send over 100 people to the unemployment rolls and join the welfare crowd myself. Small business is in the most precarious position I have experienced in my entire career! My company is in the majority of small businesses that will have no choice but to take evasive action or close if these irresponsible policies continue!
Julie Lowen (Vista, CA) Children's Paradise Inc -12/3/2012
My wife and I operate a subchapter S corporation and therefore pay personal income tax rates on the net profits of the business. Unlike most large corporations, we don’t get any special tax breaks. Our passed-thru business income puts us in the top 1%. However, in order to grow our business and increase the number of employees from 14 to 17, we reinvested more than $400,000 during the past year. The largest portion of this investment was for additional inventory needed to expand into new product lines. This type of investment is paid for out of AFTER-TAX income.
Christopher Heitman (New Berlin, WI) Pegasus Auto Racing Supplies -12/3/2012
Recognizing the importance of entrepreneurs’ feedback in the process of shaping the very policies that will help determine their business sustainability and growth, Chairman Graves launched Small Biz Open Mic in September of 2011.