Small Businesses Dispute the GOP Claims on Taxing the Wealthy
The GOP has been pushing the argument that increasing taxes on millionaires will harm small businesses. But according to studies, only 2% of small businesses have adjusted gross incomes exceeding a million dollars. Here is what Paul Ryan argued this line in his last appearance on Meet the Press:
“In 15 months’ time, the top tax rate on small businesses goes to 44.8 percent. Now they are going to throw another tax increase on it,” Ryan said during an appearance on NBC’s “Meet the Press” this past Sunday. “We are going to be taxing small businesses at about 50 percent. According to the Treasury Department, 80 percent of businesses file as individuals. Sixty percent of [small] businesses in this country file their tax rates as individuals and will get hit by this new tax that goes to 50 percent in 15 months. Why would we do that?”
But the argument is largely misleading, according to both small-business owners and analysis from the nonpartisan Tax Policy Center.
Ryan’s office told HuffPost that his claim about the 50 percent rate is based on an agglomeration of several tax policies affecting wealthy individuals. By adding up the effects of multiple perks that will expire with the Bush tax cuts, and then lumping in individual Medicare taxes, Ryan created a total top rate for high earners of 44.8 percent. This combination of several different taxes is not how individual income tax rates are usually stated. Ryan could just as easily add in the average sales tax that individuals pay and cite that higher figure as the total tax rate.
On “Meet the Press,” the congressman nevertheless made another addition to his already arbitrary figure, tacking on the 5.6 percent surtax on millionaires that Democrats have proposed to pay for the president’s job creation proposals. From there, he arrived at the menacing 50 percent figure.
However, many small businesses dispute Ryan and the GOP’s argument and have chosen to create an organization, Business for Shared Prosperity, to publicly argue that they have a responsibility to the country to pay what they believe is their fair share to insure the fiscal health of the country and its people.
Here is what some of these businesses have written on the organization’s website.
Dal LaMagna, co-managing partner of IceStone in Brooklyn, NY, said:
“As a successful entrepreneur myself, I agree with Warren Buffett. If you care about jobs, the economy and our nation’s future, read our lips — ‘raise our taxes.’
“Buffett was right when he warned that Wall Street’s multiplying derivatives were financial weapons of mass destruction. And he’s right that lower tax rates for the wealthy have brought ‘far lower job creation.’ Our current tax code has it backward. People earning their income by actually working for it are paying more in taxes than people who make it in the stock market. Millionaires like me want to reinvest in our nation and strengthen opportunity for the future – not pull up the ladder behind us.”
Lew Prince, managing partner of Vintage Vinyl, an independent music store in St. Louis, said:
“As a small business owner for more than 30 years, I have to be reality based. My company wouldn’t last a week if we kept repeating mistakes. The Bush tax cuts for the richest Americans were a big mistake. Continued tax cuts to the wealthy won’t create jobs but they will mean more cutbacks in the public services and infrastructure that really strengthen our economy. We’re still using roads, schools, parks and hospitals built during the Great Depression. Wouldn’t it be great if our grandchildren were using broadband, renewable energy and 21st Century infrastructure built during the Great Recession – which in the real world is far from over?”
Brian Setzler, President of TriLibrium, an accounting and business advisory firm in Portland, Ore. said:
“As a certified public accountant and business owner, I know the impact of taxes up close and personal. Warren Buffett’s appeal to raise taxes at the top is right on the money. It’s outrageous that small business owners and working Americans subsidize tax giveaways to millionaires and billionaires at big corporations and hedge funds. The reality is that our economy was much stronger when tax rates on millionaires and billionaires were higher and our tax system did a better job of reinforcing Main Street investment over Wall Street speculation. Job creation was much better before the Bush tax cuts, which have starved our government of revenues needed for rebuilding our crumbling infrastructure, converting to clean energy, educating our kids, retraining workers and spurring the research and innovation needed to succeed in the new economy.”
It’s worthwhile to remember what the father of modern economics said about taxes:
“The subjects of the state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.” -Adam Smith, The Wealth of Nations, 1776
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