During the debate on health care reform, a familiar theme of the opponents was that it would increase taxes on small businesses.
Of course, that was just fear mongering in an attempt to protect the insurance industry because there are no tax increases on small businesses in the new healthcare law.
There will be a small increase in Medicare rates for individuals making over $200,000 or joint filers making over $250,000. Only approximately 2% of those reporting income from small business ownership will pay more into Medicare.
But most of these folks are not your typical small business owners. Many will be high-income professionals like attorneys and physicians while others will be passive owners in LLCs. The vast majority of small business owners won’t be impacted.
Now this same scare tactic is being used to push Congress not to let the Bush tax cuts of 2001 and 2003 for the wealthiest Americans expire on schedule. President Obama is proposing to allow these tax cuts to end to help address everyone’s concern about the increasing deficit.
So how many small business owners actually are in the top 2% of earners who would see their personal income taxes increase if the tax cuts end? Apparently not that many and that’s according to the National Federation of Independent Business (NFIB), which is an opponent of ending the tax cuts for the top income brackets.
When pressed by Washington Post reporters to defend their opposition to allowing the tax cut on the wealthy to expire, Bill Rys of the NFIB, acknowledged that only a fraction of small business owners would be affected but that these were the owners of the largest small businesses—“the ones that are most likely to be hiring.”
What elitist garbage!
The NFIB wants us to believe that there is a direct correlation between the personal wealth of the small business owner and the number of employees their small business hires. There are no statistics to prove this theory only well-paid mouthpieces spouting lines fed to them by their big business allies.
The vast, vast majority of small business owners aren’t making anywhere near $200,000 from their business.
Walk down any main street and ask that income question.
The laughter you hear will tell you the answer.
Yet these same small business owners employ the vast majority of workers in small businesses. There are over 4 million small businesses with 2 to 24 employees alone.
If each of them hired just one new employee in a revived economy, the number of unemployed due to the recession would be cut in half. The 2.5% of small business owners in the affected upper income brackets can’t match this hiring potential with such relatively little effort.
Now, I’m not thrilled with the idea of raising taxes, but I’m a big fan of how President Bill Clinton balanced the budget by increasing some taxes on the wealthiest among us and decreasing federal expenditures.
Who wouldn’t trade the resulting 90s booming economy with the one we have today?
Small business has nothing to fear from allowing the tax cuts on the top income brackets to end and Congress shouldn’t listen to elitist garbage.