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'Tax Holiday' for Small Business Owners?

This is a rush transcript from "Your World With Neil Cavuto," March 31, 2009. This copy may not be in its final form and may be updated.

BRIAN SULLIVAN, GUEST HOST: All right, back to Washington now, really where it is all happening these days.

A bipartisan bill for a payroll tax holiday for small businesses, joining us now, the House sponsors behind it, Democrat Walt Minnick from the 1st Congressional District of Idaho, and Republican Aaron Schock from Illinois.

Congressmen, both, welcome.

Congressman Minnick, give us an idea as to your plan, because, I will tell you, if these small-business owners file as S-Corps, and they're successful, they are probably going to get taxed anyway for being wealthy.

REP. WALT MINNICK, D-IDAHO: Well, you know, what America needs right now is jobs.

And seven out of 10 jobs in this country are created by small businesses. There's five million small businesses in the country. And we can jump-start this economy and get it growing again if we reach out and give small business an incentive to get this country growing again. And that is what this job does — this bill does.

SULLIVAN: Congressman Schock, how much do we get on the payroll tax holiday? How much is it? How long does it last? And who is eligible?

Video: Watch Brian Sullivan's interview

REP. AARON SCHOCK, R-ILL.: Well, it is a six-month holiday.

And businesses who have 50 or fewer employees would be eligible. Studies show that small businesses are the ones that are — that would be most likely to hire additional employees, have the resources, if given the incentive to do so.

It comes up to about to an average of about $120 per employee per pay period. And, so, that is money that not only would go the employer that would be required that they reinvest into their business, but, of course, the employee's portion of the payroll tax would be rebated back to them. So, it would put money back into the pockets of consumers as well.

SULLIVAN: Congressman Minnick, what are the odds on this passing?

MINNICK: Well, I think pretty good.

It makes sense. Aaron and I are both businessmen. And business is going to lead us out of it. And the dynamic part of business is small business. So, if this economy does not start growing in the next month or two, I expect a lot of support for this bill from both sides of the aisle.

SULLIVAN: But, Congressman Schock, I thought that the budget was supposed to — we just heard from Chaka Fattah of Pennsylvania saying, well, the budget solves all of our problems, and will stimulate job growth, and, of course, will tax the wealthy, most of whom, it's shown, are actually small-business owners in disguise filing as S-corporations or individual tax filers.

I mean, is this going to fly? Are you not helping the wealthy?

SCHOCK: No. Brian, you're exactly right.

For those people that think that more government spending is going to be the solution, I would point to the recent history. This Congress has spent $3.5 trillion in the last nine months just between the stimulus checks, the bailout money, the TARP money, the stimulus money — $3.5 trillion of government spending, trying to get people back to work, trying to stimulate the economy and where are we at?

The markets are in turmoil — 401(k) statements are coming back in half. People are out of work. It hasn't worked. Seventy — 60 to 70 percent of Americans, depending on what state they live in, over 60 percent of them get their paycheck from a small business. How can we be serious about getting people back to work, stimulating the economy, if we are not targeting small businesses?

And that is exactly what this bill that Mr. Minnick and I have proposed...

SULLIVAN: The problem, though, Congressman Minnick, is that we are targeting them in the other side as well, right? You look at the successful small businesses — I know you ran a chain of nurseries up in Idaho, I believe it was. You were probably pretty successful at it, hiring workers.

Whatever you guys give back, isn't the government just going to take away in other forms, like higher taxes on the wealthy, state and federal?

MINNICK: Well, you know, if we get the economy growing again and small businesses start making money, there will be more tax revenue.

And that is why there is a quick payback on using a massive amount of incentive, giving it to people who create jobs to go out and do that in the next six months. And if we can get the economy going, I think there's a lot of small-business men right now who would be happy to pay higher taxes.

I know I certainly would. And I have run two companies, one a nursery business and a forest products company. And we like to make money, so we can pay taxes.

(LAUGHTER)

SULLIVAN: Congressman Walt Minnick of Idaho, well said.

Congressman Aaron Short — Schock — thank you very much, sir.

Good luck with your bill.

SCHOCK: Thank you.

SULLIVAN: Good luck.

MINNICK: Thank you.

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