Small Business Owners Say Governor Brownback’s Tax Cuts Likely Won’t Create Jobs
- Oct. 14, 2012
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The owners and managers of several small businesses in Lawrence said they are glad they won’t have to pay state income taxes on their businesses but don’t expect to create more jobs with the savings.
“I don’t think it would have too much of an effect on us, “ said Paul Blake, controller at Crown Toyota. “We hire based on what we need.”
Republican Gov. Sam Brownback has predicted the tax cuts, which were part of a larger tax overhaul, will help spark small businesses in the state to add an estimated 23,000 jobs in Kansas.
“The key place that most people work is either for themselves, in a small business or in a small business that employs 10 or fewer people,” Brownback said during a recent speech at the university. “That’s the real job-creating machine in America, it’s the real job-creating machine in Kansas. It’s where 75 percent of Kansans work.”
Critics of the tax cuts, including prominent Democrats, have said the cuts will actually do harm to the working class instead of creating jobs.
Paul Davis, minority leader in the Kansas House of Representatives and a partner at the Lawrence law firm of Feagan, Emert and Davis said lower-income families will face a greater burden because of the cuts.
“Just about everybody will see some tax benefit with the exception of the people at the lowest end of the scale who are really being discriminated against; there’s a variety of programs aimed at the working poor that are being ended through the tax plan,” Davis said. “So, their tax burden will actually increase.”
Of the dozen or so small business owners and managers contacted by PoliticalFiber most, like Bob Werts, said tax savings would not impact their decisions to hire more employees in coming years.
“Not based on tax code, no,” said Werts, who has owned Waxman Candles for 43 years. “In a small business, if you’ve been in business a long time and own your own building, if you restructure it can help you. Simply hiring is not the way to go. If you have too many people, it takes away from your (existing) employees.”
Werts, who employs 7-9 workers throughout the year, said extra money is always nice to have, but he’s a bit wary of free money from the government through tax cuts. He said the money would have to eventually come from somewhere.
“Would I rather have the money than the government? Sure. But, if it sounds too good to be true, it probably is, ” he said.
Laura Bennetts, owner of Lawrence Therapy Services, said health insurance reform would have the greatest impact on her decision to add jobs.
“As far as hiring more people, money isn’t what makes me hire people, it’s demand, Bennetts said. “ Really, what will cause me to hire more people is when more people have health insurance and then come in for therapy. We’re here as a service – I don’t plan to hire anybody because of a tax break.”
However, Matt Llewellyn, owner of 23rd St. Brewery, said the elimination of taxes on non-wage business income would help him in setting up a second restaurant, something he has previously considered doing. Llewellyn currently employs 80 workers.
“It would encourage me to speed up the process and also to possibly hire more employees. Part of the thing about opening a new restaurant is you do hire more people than you eventually need. These (tax cuts) would encourage that even more, which would be a great thing for restaurant owners.
“For this business here, I’d probably give more hours to people already working. However, what the bill might encourage me to do is be more aggressive about actually opening up a new business,” Llewellyn said.
Claudia Kincaid, office manager for Associates in Dentistry, said the tax break would help her protect the jobs of her current employees but probably not be enough to add positions. “A tax break would be a good idea; I’ve had all the employees I’ve had here for years.”
Tony Schmidt, founder of Coolproducts.com, based in Lawrence, said he would only hire more people if his business grows.
“I think businesses hire who they need when their workforce gets overtaxed,” he said. “That’s when they hire. You can only get so much out of a person, and that is the governing factor.”
Feature image: Wikimedia Commons