Members of the U.S. Chamber, along with other business groups and ordinary citizens, are stepping up their efforts to prevent a massive tax increase on January 1, 2011, that will have detrimental impacts on investment and jobs in the United States.

More than 450 business owners, chambers of commerce, and trade associations signed a letter that was distributed to members of Congress on July 27 urging them to take a stand against the impending tax increases on capital gains and dividends. “Increasing taxes on capital gains and dividends could derail America’s fragile economic recovery,” the letter states. “The increased cost of capital caused by these tax increases will hamper economic growth and job creation for years to come.”

Separately, the Chamber has generated more than 14,600 electronic letters to Congress from citizens concerned about the tax hikes.

Unless Congress acts, the tax rate for capital gains and dividend income will increase by 33% and by as much as 164%, respectively, resulting in one of the largest tax increases in U.S. history. These increases don’t include an additional 3.8% tax on investment income that will go into effect in 2013 as part of the health care reform bill.

“These are precisely the kind of tax hikes that have the greatest single negative impact on consumption, investment, growth, and jobs, and they all hit the small business community,” Chamber Executive Vice President Bruce Josten said in a recent radio interview.

The Chamber and its supporters are urging Congress to remove the uncertainty over this looming tax increase and maintain the current 15% tax rate on capital gains and dividends.

According to a recent independent poll released by the Chamber earlier this month, 25% of small business owners and 22% of voters believe that higher taxes are the primary threat to job creation. Also, lower taxes and tax breaks for small businesses were cited most often by the 300 small business respondents as the best way to create jobs in the United States.

Read the July 29 national support letter.

Tell your member of Congress to take action and prevent unnecessary tax increases on capital gains and dividends that will knock the economy off the road to recovery.