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Dear House Republicans – a letter from a job creator

Dear House Republicans,

I am an entrepreneur and owner of a small business, one of the “job creators” you frequently talk about. First, I want you to know that we job creators really appreciate all your support in our efforts to create jobs – it hasn’t been easy in this economy over the past several years.

I understand that you have walked away from budget negotiations and have gone home for the holidays, which means the country will fall off the “fiscal cliff” and go into another recession. As a direct result of your efforts on our behalf, Goldman Sachs projects that the country’s GDP will contract to -3.9% in the first quarter of 2013 (by-the-way, did I forget to wish you a Happy New Year?)

I hear that the reason you’ve walked away from budget talks and opted instead to enjoy your holiday festivities at home is because you are standing on principal not to raise taxes on us job creators. While I can fully appreciate your discipline in standing by your convictions, what I am a little confused about is how this is helping us create jobs. You see, while adjusting my personal tax rate a few percentages in either direction has virtually no effect on my hiring, ticking the GDP a few points has a huge impact on job creation. At first glance, your choice to knock down GDP from positive territory to -3.9% overnight doesn’t seem very helpful to those of us who are trying to create jobs.

I realize many of you have never started or run a business, so you may not fully grasp the basics of business or where jobs actually come from. Indeed, many of you are career politicians and have lived off public spending for many years – much like the “takers” you often criticize. Let me offer a primer on business that may be useful.

Businesses require revenue to survive and grow. Where does revenue come from? Revenue happens when someone buys the goods or services a business sells – that purchasing “someone” could be consumers, other businesses, or even the government itself. When people and businesses have more money to spend, they buy more, which means businesses have more revenue. When businesses have more revenue, they grow and hire more employees. Conversely, when people and businesses have less money to spend, they buy less, which means businesses have less revenue. When people and businesses have less revenue, they pay fewer taxes, which makes our budget deficit worse. As businesses contract, they layoff employees, or go out of business altogether, which means fewer jobs and even less tax revenue.

However, if I as an individual have a little more money because my taxes are reduced, I don’t typically donate that money to my business. I might save it, or donate it to a worthy cause, or take my wife on a vacation. Giving that money to a new employee who has nothing to do because the economy is flat doesn’t seem to make as much sense to me as it appears to make to you. I would actually appreciate having the problem of being taxed a bit more, as it would mean that my business was generating more revenue. I want that problem.

I realize this is a lot of information to take in, and I apologize for that. Part of the reason I decided to write you this letter is because I wanted you to know that my business is already being impacted by your decision to go home for the holidays instead of doing your jobs. You see, my business is one of those that relies largely on the spending of other businesses. Those businesses are finalizing their budgets for 2013, and many are tightening their belts in anticipation of the 2013 recession you have gifted us just in time for the holidays.

So as much as I admire your steadfast commitment to your principals, whatever they may be, I, and many other job creators, would much prefer that you do your job this holiday season, so that we can do our jobs and get more Americans back to work.

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