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The Geithner Plan's Assault on Small Businesses

The Geithner Plan's Assault on Small Businesses

By Rep. Kevin McCarthy - December 5, 2012

Last Thursday, the White House proposed their “solution” to address our country’s debt crisis in the form of a widely panned plan delivered to Capitol Hill by Treasury Secretary Timothy Geithner. Openly mocked as “absurd” and “unserious,” this plan and its messenger reveal more about the true priorities of the administration than they may have realized it would. While Republicans have offered proposals to protect small businesses (and the Americans they employ) from tax rate increases, Geithner -- the champion of Wall Street whose financial services “reform” enshrined “Too Big to Fail” as law -- is once again advancing proposals to protect the corporate elite at the expense of the taxpayer.

In addition to billions in new “stimulus” spending that our country can’t afford, the Geithner plan also contains billions in tax increases on small and family-owned businesses while protecting the tax preferences of wealthy, multinational corporations. In short, the Geithner plan benefits Costco at the expense of the locally owned corner store. Small businesses already struggle to compete with big businesses that enjoy the luxury of a tax code filled with corporate loopholes. The Geithner tax policy, if implemented, will further devastate our local communities and ultimately the middle class.

Before I came to Congress, I was a small business owner. I started a deli in my hometown of Bakersfield, Calif., that I creatively named “Kevin O’s.” As any small business owner knows, starting a business is not glamorous work. I made the deli countertop in my garage with my dad, and counted on my friends and family to “volunteer” their labor until I could afford to pay them. While it wasn’t a gold mine, people in Bakersfield seemed to like the sandwiches and after a couple of years I was able to sell the business so I could go to college.

My story is not unique. America is nation of people striving to make life better for themselves and for their families. The entrepreneurial spirit is a cornerstone of our national identity -- we’re risk takers, we’re innovators, we’re daredevils. That’s why America harnessed electricity, pioneered flight and made pictures talk.

But what if we changed the rules?

What if we made it harder to succeed? Harder to innovate? Americans have always optimistically believed that future generations will be better off than generations past -- what if suddenly that was no longer true? That’s what the Geithner plan means for America. Big business forever replaces Kevin O’s and the corner store and the local lumber yard. It’s not just about the homogenization of the American landscape and the loss of community identity -- small businesses create seven of every 10 new jobs and they employ just over half of the country’s private sector workforce. They are the job-creation engines of America and are the key to our economic recovery. These people aren’t wealthy Wall Street executives; they’re the people getting America back to work. So why does the former president of the Federal Reserve Bank of New York, who arranged the rescue and sale of Bear Stearns and helped engineer the $700 billion Wall Street bailout, want to make small businesses less competitive against multinational corporations?

Instead of raising taxes on job creators to protect corporate profits, we need fundamental tax reform. By closing special interest loopholes and lowering rates on individuals and small businesses, we can usher in a new era of economic growth for our country. We also need to rein in the excessive government spending that is responsible for the debt burden jeopardizing our economy. It’s no mystery what happens to a country that can no longer afford to pay its bills -- we needn’t look further than Greece or Spain for terrifying case studies of this reality. The spending cuts in the Geithner plan were cosmetic and disingenuous. Refusing to cut politically popular but ineffective and wasteful government programs while ignoring the severe financial problems facing Medicare and Social Security is cowardice, not leadership; continuing to borrow 40 cents of every dollar we spend from countries like China is reckless. We need real spending cuts and reforms to government programs to make sure that they are effective and efficient, and provide the health care and retirement security for today's seniors and generations to come.

Republicans understand the dire circumstances facing our country's economy and the small businesses that drive its growth, and as a result, have put forth serious and sensible solutions to avert the fiscal cliff. We want to protect job creators and the millions of Americans they employ. The Geithner plan protects special interests and bloated government budgets, while providing a refuge for spineless career politicians. 

Rep. Kevin McCarthy, a Republican from California, is the majority whip in the U.S. House of Representatives.

Rep. Kevin McCarthy

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