Zombie Lies: Republicans Revive False Claim That Obama Tax Hikes Would Hurt Small Businesses

During the 2010 debate over the expiration of the Bush tax cuts, Republicans continually claimed that allowing tax rates for the richest two percent of Americans to go back to where they were under the Clinton administration would disproportionately affect small businesses. The claim wasn’t true then — as just 3 percent of people with any business income at all, from a business large or small, would be affected if the top two tax rates increase — but that didn’t stop the GOP from parroting it over and over.

Today, President Obama plans to unveil a deficit reduction plan that will, once again, call for the expiration of the Bush tax cuts for those in the top two income tax brackets, as well as a new “Buffett rule” — a minimum tax for millionaires, inspired by billionaire investor Warren Buffett’s continued outrage that tax rates for investors are lower than those for working class Americans. So, inevitably, Republicans have revived their talking point regarding small businesses:

It is disappointing the president has nothing but a fresh slogan for the same job-killing small business tax hikes opposed by bipartisan majorities in Congress,” [House Speaker John] Boehner spokesman Michael Steel said.

House Budget Committee Chairman Paul Ryan (R-WI) followed suit on Fox News Sunday:

And don’t forget the fact that most small businesses file taxes as individuals. So, when you are raising these top tax rates, you’re raising taxes on these job creators where more than half of Americans get their jobs from in this country.

To review: fewer than 2 percent of the small businesses in the country face either of the top two tax brackets. Far more, in fact, are in the lowest tax bracket. Plus, “many of the roughly 650,000 filers with small-business income who face one of the top two tax rates are merely passive investors who have nothing to do with running the business.”

On a final note, small business owners that file their taxes as individuals (instead of through the corporate tax system) pay taxes on the income they actually take home. A small business owner who is pocketing one million dollars annually should be taxed like anyone else taking home that much. Claiming that the tax hikes Obama proposed would adversely impact small businesses is just another way in which the GOP is going to bat for the very rich.