Robert Spielman, Tax & Business Services Partner, Quoted in CFO.com Article "Election Tax Preview: Small Biz’s Fiscal Cliff"
By: Kathleen Hoffelder
With Bush-era tax cuts expiring and election uncertainty in full throttle, small manufacturers are facing the possible loss of bonus depreciation and other anxieties.
When Michael Retzer, controller of Strohwig Industries, a Richfield, Wisconsin-based tooling and machining manufacturer mostly serving the auto industry, thinks about the upcoming election, he immediately goes on the defensive. “For us, our planning is to play it close to the vest instead of going out willy-nilly build-it-and-they-will-come. We can’t take that tack anymore,” he says.
That caution doesn’t apply to soliciting new business. Instead, the company’s just won’t be as proactive if there is indeed another term for President Obama, who plans to raise taxes on individuals earning more than $250,000 annually.
Robert Spielman, tax and business-services partner at Marcum, an accounting advisory firm, explains it is almost certain that taxes will go up for small and middle-market S corporations. The highest individual tax rates are expected to jump, particularly with the tax cuts enacted under former President George W. Bush expiring. “If tax rates go up, then their income tax will go up,” he says. About 85% of manufacturers today are S corporations.