The debate about the Bush tax cuts for the top 2 percent of income earners (with annual household income over $250,000) is heating up in Washington, DC, and with it the rhetoric about how ending these special breaks might affect small businesses.
Indeed, opponents of ending the special breaks at the top are making doomsday claims about potential negative impacts on small businesses. They’ve even funded a “study,” based on wild assumptions, to manufacture convenient figures to support their claims about possible job losses.
But the truth of the matter is, these claims – both about direct impact on small business owners and about overall jobs impact – don’t square with the facts.
In reality, only a tiny fraction – about 3 percent – of taxpayers who report any form of business income on their individual tax returns earn more than $250,000 in take-home income. Even this number is inflated because it includes hedge fund managers, partners in high-powered law firms, and K Street lobbyists who report their income as “business income” on their tax returns.
What about the jobs claim? Well, the non-partisan Congressional Budget Office has looked into this, and found very different results from the recent industry-funded study. In fact, when CBO evaluated almost a dozen different policy ideas based on their ability to increase economic activity and create jobs, special tax cuts for the wealthy came in, wait for it, dead last.
Want to see what a small business owner down in the trenches has to say about the Bush tax cuts? Check out this piece in the Huffington Post by Main Street Alliance leader Kelly Conklin.