Tax Increase, Small Business Hit?

20 September 2010 |permalink | email article

One of the most heated arguments involving Congress and the Bush administration is over whether to let the Bush tax cuts expire for the wealthy, and how a tax increase would affect hundreds of thousands of small businesses across America – whether new start-ups or mom-and-pop convenience stores. Obama favors tax cuts for most taxpayers but proposes eliminating them for the for the top 2 percent of wage earners, whose taxes would rise.

Grover Norquist, president of the conservative advocacy group Americans for Tax Reform, told The New York Times that “It’s a body blow to the small business community.” That argument endorses the intense lobbying effort to extend the tax break for Americans making over $250,000.

Here’s the shocker: despite the emotional appeal being made Internal Revenue Service stats indicate only 3 percent of small businesses would be subject to the higher tax, suggesting that many studies of previous tax increases suggest that it would have only a minimal impact on hiring.

The Joint Committee on Taxation asserts that 97 percent of all business owners do not earn enough to be subject to the higher rates, which would be levied on income of over $200,000 for individuals and $250,000 for families, The Times reported.

With the midterm elections just 44 days away the Democrats will have to step up and move at flank speed to convince voters arguments by trade lobby groups and their Party of NO allies are wrong on the facts.

Quotable

“The Tea Party will be the best thing that’s happened to Barack Obama and the Democrats since, well, Sarah Palin, the media hyped 2008 vice presidential nominee who turned out to be a bursting bumble, not a lasting bubble for the McCain campaign. It’s fitting that Palin is now the godmother of the movement that has captured the GOP instead of being captured by it.” – Democratic strategist Bob Shrum to the Washington Post on whether the Tea Party helps or hurts Obama.

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