 |
Ten questions from
the small business community for Treasury
Secretary
|
Release Date:
06/16/99
|
|
|
WASHINGTON, D.C.,
June 16, 1999 -- As Deputy Treasury
Secretary Lawrence Summers prepares for his
confirmation hearing before the Senate Finance
Committee tomorrow, small business owners await
answers to these very important questions:
- On April 21, 1997, you stated: "When it
comes to (cutting) the estate tax, there is no
case other than selfishness." Do you still
believe America's family farmers, ranchers and
business owners are selfish to resent that the
Treasury uses their deaths as a "trigger" to
present their children with a tax bill of as
much as 55% of the total value of the family
business?
Follow-up question: If you no
longer view this as "selfish," can America's
small business owners count on you to support
eliminating this egregious tax?
- A "temporary," 33 percent FUTA surtax was
enacted in 1976 to repay loans from the federal
unemployment trust fund. The loans were fully
repaid in 1987, but the temporary surtax
remains, costing employers $1.4 billion
annually. Do you support immediate repeal of the
surtax and, if not, why not?
- Last year, the federal government extracted
$6.1 billion in FUTA taxes from employers,
though it spent only $3.5 billion on
FUTA-related expenses. The rest-more than 42
cents of every FUTA tax dollar-was used to pay
for non-related government programs. Do you
approve of spending tax money -- raised and
earmarked for one specific purpose -- on other,
completely unrelated programs?
- Recently, the President indicated his desire
to let states tap their trust funds to pay
unemployment benefits to workers who take
parental leave. Do you support the effort to
raid trust funds to support this new initiative,
and, if so, how would you assure that
unemployment benefits will be available to
workers laid off in the next recession?
- America's large corporations enjoy full
deductibility of health-insurance costs, while
our smallest businesses -- the self-employed --
can deduct only 60 percent of the cost of
covering themselves and their families. Do you
support leveling the health-cost playing field
by granting immediate 100 percent deductibility
to the self-employed, or would you view that as
"selfish"?
- You say you favor a simpler tax code, yet
the IRS is forcing small firms to use accrual
accounting, rather than the far simpler
cash-accounting method, if they hold even modest
inventories for a brief period of time. Would
you direct the IRS to cease this interpretation
of the rules so small firms could use cash
accounting, as intended by Congress?
- You have trumpeted "check-the-box"
regulations as a boon to simplified tax planning
and compliance, particularly for small business.
Will you, therefore, embrace Sen. Bond's bill,
with its check-the-box provisions to clarify
independent contractor arrangements and, if not,
why not?
- You serve an administration that originally
opposed creation of the IRS Advisory Board. This
position was ultimately altered -- at least in
public statements. However, the President is now
six months past due in making appointments to
the Board, and none of the names he has floated
so far has any small business background. Do you
personally support the intended role of this
Board, specifically including the requirement
that at least one board member have a strong
small business background? If so, what will you
do to assure that the Board gets up and running
as quickly as possible?
- You have publicly supported the President's
proposal to have a government board invest
one-fifth of Social Security surpluses in
private-sector equities, insisting that this
approach is preferable to allowing Americans to
direct these investments for themselves. Yet you
also have argued that "state-run enterprises,
including state-owned banks, have a
disappointing record of performance," noting
that "the reality is that politics usually
intrude in the operation of a public enterprise,
and efficiency, financial performance and
quality of service are often sacrificed." What
assurances can you give working Americans that
the President's Social Security proposal will be
the exception to the rule you yourself have
identified?
- You have also observed that "price and
exchange control inevitably create harmful
economic distortions" and that "both the
distortions and the economic damage get worse
with time." To avoid this problem, you have
recommended: "let markets set prices for goods,
services and currencies." Is your belief in the
free market system genuine, or do you support
current efforts to manipulate labor prices by
raising the starting
wage?
Small business works for
America, Mr. Summers. Can America's small
businesses count on you to work for
them?
CONTACT: McCall
Cameron or Mary
Crawford at
202.554.9000.
|
|
| BACK TO
TOP |
| | |
|
