Tag Archives: Bush tax cuts

Taxing “Small Business”

This is really getting tiresome.

Obama and the GOP continue their standoff over the Bush tax cuts. Obama is willing to extend those cuts for taxpayers making less than 250,000 a year, but wants to let the cuts expire for those making more–those in the top 2%. The GOP has fought tooth and nail to protect that 2% from the horror of a return to Clinton-era marginal rates of 39%, and (lacking even a superficially convincing argument for that position) they have deployed a number of rhetorical weapons intended to justify their stance.

First it was “job creators.” Raise the marginal rate to its previous low point and the wealthy won’t create new jobs!┬áSince we have had the historically low Bush rates for nearly a decade, and the jobs have not been forthcoming, voters have begun to see through that one. (Recent studies have confirmed that job creation bears virtually no relationship to tax rates; we have had robust job growth in periods of relatively high rates.)

The curent faux concern is for “small business.” Since many small enterprises choose to be taxed as individuals, Romney and the GOP argue that a higher rate on those making over 250,000 will “target small business.”

Obviously, the word “small” means something different to Romney than it does to most of us. The nonpartisan Joint Committee on Taxation found that in 2013, the higher rate would affect just 3.5% of small business–mainly doctors and lawyers. As Harry Ried noted during a recent debate, the GOP’s idea of “small business” evidently includes “fabulously rich so-called small business owners like Kim Kardashian and Paris Hilton.”

The Republicans’ insistence on protecting its wealthy donors from even a modest tax hike sure makes their rhetoric about the deficit ring hollow.