From June 17-21, groups around the country are celebrating National Small Business Week. According to the SBA, “More than half of Americans either own or work for a small business, and they create about two out of every three new jobs in the U.S. each year.” They’re also some of the biggest users of the GSP program.
About 240 companies are on the GSP supporter list and 180 of them – or 75 percent – have 100 or fewer employees. The government may consider them small, but their GSP savings certainly aren’t: small businesses reported 2012 GSP savings ranging between $1,000 to $3 million.
Among supporter list companies, GSP saved the middle-of-the-road small business $5,000 per employee in 2012. At multiple small businesses, GSP savings exceeded $100,000 per employee. While small businesses have the greatest relative dependence on GSP savings, they also are least able to pay the new, higher taxes when Congress allows GSP to expire.
Raw material costs go up. Streamline profits turn into money losers. Banks become reluctant to extend credit. Small businesses can’t grow. And many are forced to lay off employees because the money just isn’t there.
These are all examples from 2011, but there’s no reason to expect a different outcome if GSP expires again in 6 weeks. Small businesses will start paying higher taxes and have less money to do the little things like….hmmm….create jobs?