President Obama Obscures the Facts on Small Business

In his weekly address today, President Obama laid out what sounded like a very compelling argument for raising taxes.  However, he was deliberately misleading about the impact of increasing taxes on small businesses.

Here’s what he said about the impact of the increased taxes on small business:

“When it comes to taxes, for example, there are two pathways available.

“One says, if Congress fails to act by the end of the year, then everybody’s taxes automatically go up – including the 98% of Americans who make less than $250,000 a year. Our economy can’t afford that right now. You can’t afford that right now. And nobody wants that to happen.

“The other path is for Congress to pass a law right away to prevent a tax hike on the first $250,000 of anyone’s income. That means all Americans – including the wealthiest Americans – get a tax cut. And 98 percent of Americans, and 97 percent of all small business owners, won’t see their income taxes go up a single dime.

“The Senate has already passed a bill like this. Democrats in the House are ready to pass one, too. All we need is for Republicans in the House to come on board.”

If it’s not going to affect practically anyone, why are those stupid House Republicans dragging their feet??

Well, it turns out, those 3% of small businesses are pretty important to our economy.  The Investors Business Daily explains,

“But this is, to put it politely, deceptive. By jacking up taxes on the most successful 3% of small businesses, Obama will destroy hundreds of thousands of jobs, shrink U.S. output and force companies to raise prices.

“As usual, the data tell the story.

“America has some 34.8 million small businesses, according to a recent Treasury Department study. Sounds like a lot, until you consider that 30 million of them employ no one other than the owner.

“Of the remaining 4.8 million that do employ workers, 1.2 million have incomes above $200,000 — where Obama’s tax hikes kick in.

“Here’s the rub: Those 1.2 million small businesses that will be hit by Obama’s small-business tax are the nation’s most prolific job creators, accounting for 54% of all private-sector positions — or 77.6 million in all.

“And while they make up just 3% of all small businesses, they earn 91% — or $341 billion — of all profits reported by the small businesses with workers. “They are the most successful and therefore the biggest job creators,” as the Heritage Foundation recently pointed out.”

Hmmmm… I hope that somebody tells the president that he’s about to destroy hundreds of thousands of jobs.  Maybe he’ll be too busy selling his tax hikes to the public to pay attention.

Discussion Question: Are you in favor of raising taxes on our nation’s most prolific job creators?

  • Chris Johnson

    I’ve become a “prolific job creator.”  And you know what difference taxes make on the number oef jobs I create?  Zero.

    The real thing – that nobody answers-  is what right they have to our money.

    • Robert Ewoldt

      Two questions:
      1. How much would the tax changes affect your bottom line?
      2. Do you look at how much money you’re making before making hiring decisions?

    • Robert Ewoldt

      BTW, I agree with your bottom line, that nobody addresses whether they have a right to your money. Democrats think that all money is the governments, and they can choose how much they allow you to keep.

      • Chris Johnson

        1.) It’s all the same hamburger.  I mean, we’re making more than we need and covering major things like Heather’s school (ugh), etc  I’m not gonna count nickels here because it doesn’t matter, really. Yes, it sucks, and yes, it’s unearned, but it’s reality.  The time I spend bitching about tax rates is “tilting at windmills” time.   Doesn’t make me money, doesn’t help the world and its self-undulgent onanistic behavior I can’t afford.

        2.) Sort of; we make hiring decisions based on a different rubric.  How much can we make based on this hire, how much runway do we have and how much risk is there if the return is wrong.   Obviously taxes impact it.

        The conservative argument that – essentially – atlas will shrug – is off base. I’m not going to let a tax rate stop me.  Ever.  That’s where politicians think it’s wrong.  Incidentally, the paperwork is a bigger “effective tax” than the money spent.  Having to have a cPA and a bookkeeper is expensive.  Having to learn GAAP, and having to spend my time concerned with compliance is a bigger issue to me than the rest of it.