By the numbers

On allowing the Bush tax cuts to expire, Obama, Pelosi and company have been touting that 97% of small businesses and 98% of families would not be affected. That they are only targeting the millionaires. Joe Bite-Me on allowing the tax cuts to expire:

House Minority Leader John Boehner’s assertion that the hikes would harm small businesses, saying that “he has created this myth that a tax cut for millionaires is actually a tax cut for small business. There aren’t 3% of small businesses in America that would qualify for that tax cut.”

That 3% number is deceptive. It represents the raw number the IRS sees.

The 3% figure, which is computed from IRS data, is based on simply counting the number of returns with any pass-through business income. So, if somebody makes a little money selling products on eBay and reports that income on Schedule C of their tax return, they are counted as a small business. The fact that there are millions of people in the lower tax brackets with small amounts of business income may be interesting for some purposes, but it is irrelevant for the assessment of the economic impact of the tax hikes.

This is some sort of blog for Nancy Pelosi’s staff to push her propaganda.

MYTH: Letting the tax cuts for the wealthiest few expire will hurt small business.

FACT: NOT TRUE! At least 97% of small businesses would not pay a penny more due to letting these upper-income tax rates expire, according to a range of experts.

The independent analyst Politifact rates this claim as “Pants on Fire” as “two independent studies that looked at the impact of the Democratic proposal on small businesses found that only between 2 to 3 percent of tax filers who report having what can be thought of as small business income will be affected,” including the Tax Policy Center and the Joint Committee on Taxation.

And even these studies overstate the impact on small business. Included in that small percentage of “small businesses” affected (2-3%) is anyone who receives any type of partnership or business income–so every partner in a major law firm and every principal in a major financial institution would count as a separate small business. A CEO who has board fees or speech fees would also count as a small business owner under this overly broad definition.

She doesn’t mention that included in that 97% who won’t see their taxes raise one penny” are the untold number of those who run VERY small businesses, do not employ anyone, and thus are basically irrelevant to this conversation.

Some small businesses numbers (from 2004):

n 2004, there were approximately 24.7 million businesses in the United States, according to Office of Advocacy estimates. The Internal Revenue Service (IRS) estimates there were 29.3 million nonfarm business tax returns in 2004; however, this number may overestimate the number of firms, as one business can operate more than one taxable entity.

Census data show there were 5.7 million firms with employees and 17.6 million without employees in 2002 (and 18.6 million without employees in 2003). Applying the sole proprietorship growth rates to the nonemployer figures and similar Department of Labor growth rates to the employer figures produces the 24.7 million figure. Small firms with fewer than 500 employees represent 99.9 percent of the 24.7 million businesses, as the most recent data show there are 17,000 large businesses.

The Democrats are lying to the people to pass their agenda. So how many will be affected if Nancy gets her way?

Democrats will claim that the tax increase will hit only 3% of small businesses, but the GOP will respond, accurately, that it will hit 50% of all small business income because 85% of small business owners are taxed on profits at individual tax rates. Voters are smart enough to know who creates new jobs in America, and it isn’t people or businesses who don’t make a profit. Americans have also relearned the hard way over the last 18 months that the government doesn’t create net new employment.

Look, don’t count me among that group of Americans. I knew Obama was selling us a shit-sammich.

Apparently, though, Pelosi also isn’t among that group of Americans, because she didn’t learn anything.

Added funny. See if you can spot it. On the Democrat plan to extend the tax cuts only for the “hardworking middle class”

Many Democrats and Republicans are eager for a tax-cut battle, seeing it as emblematic of each party’s economic principles.
“Now the administration is calling for a massive tax hike on small businesses in the middle of a recession,” said Senate Republican leader Mitch McConnell of Kentucky, who maintains that higher rates on the wealthy would hit small business hard, a point the Obama administration disputes.
“So it’s no surprise,” McConnell added, “that most Americans think the country is on the wrong track and that Democrat policies have failed to do anything to fix their top concern, the economy.”
Democratic leaders are convinced that voters won’t buy that argument. Not only will the public back higher taxes for the rich, but “we have an opportunity to generate $700 billion that could go to deficit reduction and badly needed programs,” said Rep. Raul Grijalva, D-Ariz., a co-chairman of the House Progressive Caucus.

Read more:

WE NEED TO REDUCE THE DEFICIT. Oh, and we’ve got these badly needed programs we want to fund…

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One Comment on “By the numbers”

  1. Cranky Says:

    I can see why bitsofbrain voted you his favority hater! You sure don’t pull any punches.

    Nothing scarier to a Democrat than a tax cut, cuz taxes fix everything, don’t they?

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