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To all Americans, let me be clear: I want to work with the President to get our economy back on track. I want to fix housing, reform the financial markets and help every citizen to get access to high-quality, affordable health care. I want our President to succeed in leading our nation out of the economic crisis.
 
But I draw the line with President Obama’s ideas to raise taxes. He may think it’s a great idea to raise taxes in the midst of recession, but I sure don’t.  And the President’s proposed tax increase is a Whopper -- $1.4 trillion – I don’t even know how big a number that is. $1.4 trillion in new taxes – equal to the economic output of Spain.  
 
Despite the White House rhetoric, these taxes will hit all Americans. No one is spared: 
 
- This budget raises taxes on energy.  If you drive a car or heat your home, your taxes will go up.
 
- This budget raises taxes on small business.  More than half of all small businesses that employ between 20 and 500 employees – that’s the federal definition of “small business,” 20 and 500 employees – will see their taxes bills rise and jobs eliminated.
 
- This budget raises taxes on senior citizens who are dependent on dividend and capital gains income for the retirement income. 
 
- This budget raises taxes on charitable contributions. And just the announcement that it will happen has already been decreasing charitable contributions. Of course a lot of those charitable contributions are ones that come from these small business employers that have single proprietorships or small corporations where they have to pay their taxes right away even though they have to put all that money back into the company.
 
- This budget reinstates the death tax, making it harder to keep the family ranch or family farm or family business in the family.
 
This budget simply taxes too much.
 
I’ve heard lots of complaints from Wyoming ranchers about the President’s tax increase.  Many of our ranches and farms are structured as s-corporations or limited liability corporations, and this tax hike would really hurt them.
 
The President will say that his proposal to let some 2001 tax cuts expire will affect only three percent of all taxpayers, but this statistic obscures the fact that these taxpayers employ the most number of workers and generate the most economic activity of all small business entities. According to a 2007 Treasury Department report:
 
- Over 30 percent of all business income comes from pass-through entities like s-corporations, partnerships and limited liability companies. That means it goes right back in to take care of the business.
 
Last weekend, I was in Wyoming and I visited a restaurant that started in Gillette, Wyoming and now has eight different locations. At the location I went to, one of the owners happened to be there. And he said, proudly, and he should, “We started this business on $2,000.” Two-thousand dollars. “Now we have eight stores, and we still only have $2,000.” That’s because everything has been plowed back into the business, which results in more jobs for more people.
 
That’s what we’re talking about. We want this economy to grow. It’s those guys with an idea – and women with an idea – that they can take that $2,000 – their last $2,000 – and they can put it into something productive and they can grow it. Now, the problem is when they grow it, they pay the taxes on it immediately. They pay the taxes on it as though it actually flowed into their pocket, but it doesn’t. And as a result, some of these people that have been successful, that are creating all these jobs, make more than $250,000 a year. They don’t get to keep it. That’s the important part. They don’t get to keep it. They have to pay – they don’t get to keep it. They have to pay taxes on it right away and that puts them into this new, higher tax bracket. It’s going to have a devastating effect. Suddenly, the house that they own, they’re not going to have the same kind of house deduction - as if they didn’t have a business at all. And the charitable contributions, it is these small businesses that really keep the towns going. It isn’t the big corporation that buys the ads in the yearbooks. It isn’t the big corporations that make the donation when somebody comes around because there’s been a fire. It’s those little businesses, those little businesses that want to grow, that aren’t growing, but they’re having to put everything they’ve got back into it. I know of small businessmen who have been able to pay everybody that works for them but not themselves. I mean, we’re not talking about the big corporations or the big bonuses here. We’re talking about the little corporations that are family. By “family,” I mean every employee that works for them understands how difficult the business is, how close to not succeeding the business is, and because they want their job, they help the business to succeed. But, as a result, they’re included in the “family.” All of those are going to suffer because of the 30 percent of all business income that comes through these pass-through entities like s-corporations, partnerships, limited liability companies. These small businesses that are hiring people, they’re hiring people, they’re not laying them off – that’s where some of the jobs are – unemployment would be tremendously higher if it wasn’t for this 30 percent of all business income that gets passed through and back into the business.
 
- Now, over 70 percent of that income is concentrated in the top two marginal income tax rates. They pay the highest rate that we have because they did a business and because the business is making money, but it isn’t money they get to put in their pockets. It’s money they put back into the business.
 
- So, nearly a quarter of all business income would be subject to higher taxes under this budget. Let me repeat that again. Nearly a quarter of all business income would be subject to these higher taxes under this budget.
 
And, according to a 2007 survey completed by Gallup for the National Federation of Independent Businesses, 50 percent of all businesses that employ between 20 and 499 workers will face higher taxes -- if the 2001 rate reduction in the top two rates is allowed to expire.  Fifty percent of all businesses that employ between 20 and 499 workers will face higher taxes if we don’t change that, if we allow this to expire. And the plans, according to budget, are to let it expire, to shove this tax off on these small businesses. The ones that are still doing well, the ones that haven’t succumbed to the greed, the ones that have been doing the right thing, particularly with their community. Raising taxes on our nation’s job-creation engine – at any point in the business cycle – is just bad economic policy.
 
The key to our nation’s economic growth and our ability to recover from crises like this one is the flexibility and vibrancy of our non-corporate sector.  Small business is the incubator for entrepreneurship and we should protect it and nurture it, not tax it. For example, many of the companies that fueled the economic growth of the 1990s and beyond started as pass-through entities. For example: Google, Yahoo and Microsoft.  That’s just to mention a few that the President mentioned earlier in the week when he was talking about the importance of helping out small business and said all the right things about small business. I’m encouraged about what he said. I’m encouraged by the differences that he’s going to make in the way the small business administration works. But it’s going to come back again in the way of higher taxes for those same people and we need to encourage, not discourage, those people.
 
When I was in Wyoming, I had a procurement conference. That’s where the federal government comes to Wyoming and talks to my businessmen to see if small business can’t provide for some of the government contracts. Every year it’s a huge success and people all over the nation, not just Wyoming, are able to take advantage of that kind of thing. A guy from Montana was talking about the need for some liquidity so he could get a loan. A loan, not bailout. A loan so he could grow his business. But as we learned at the White House summit on Monday, the banks don’t have secondary loans. When that happens, these small businesses can’t get loans. And a lot of them need short-term credit. You have to order your inventory a year ahead of time, often, and when it gets there you have to pay for it. And then you sell it. So a lot of them need just kind of a cash flow loan, one that’ll pull them through. All the inventory hits and gets paid off by the time the inventory gets sold. A guy in Montana talked to a guy in Wyoming who talked to me and proposed several different ways that I’ve passed on to the White House and to Secretary Geithner that money could be freed up for these businesses to be able to grow. And I’m encouraged and hope that will help. I hope that it’s not reversed by these new taxes.
 
I will fight to preserve low taxes for our nation’s small businesses and I’m prepared to offer an amendment on that. I’ve pledged to help every citizen get access to high-quality, affordable health care. My question is will the White House work with me to protect small business from the harmful effects of this budget’s tax increase?
 
This budget taxes too much, spends too much, borrows too much. I yield the floor.