Since President Obama called, once again, for the expiration of the Bush tax cuts for income above $250,000, Republicans have revived their favorite talking points about taxes and small businesses. For years, Republicans have falsely portrayed a tax increase on high-income Americans as disproportionately affecting small businesses, though there is little evidence to back up those assertions.
Case in point, Speaker of the House John Boehner (R-OH) said during a speech today that half of the people affected by the increase would be small business people:
Now, let’s look at what the President wants to do. By raising taxes on those who make more than $250,000, half of those people who are going to be taxed are small business people, who have pass through entities, just like many of you, and just like I had…Why we would want to tax the very people we expect to create jobs in this country makes no economic sense.
Boehner has used variations of this lie in the past, claiming that half of the people affected by a millionaire’s tax would be small business owners. The statistic wasn’t true then, as Boehner’s own office admitted, and it isn’t true now. Far less than half of the people affected by the expiration of the upper income tax cuts get any of their income at all from a small businesses. And those people could very well be receiving speaking fees or book royalties, which qualify as “small business income” but don’t have a direct impact on job creation.
Boehner himself has conceded that only three percent of small business owners would be affected by the tax increase. Meanwhile, both his Congressional website and his Twitter feed have been claiming that letting the high income tax cuts lapse hurts job creation: but history has proven that simply isn’t the case, as job creation and economic growth have been stronger when the top tax rate was higher.
Even under Obama’s plan, high-income individuals are still receiving a hefty tax break compared to what they were paying under the Clinton administration. Republicans, meanwhile, are using small businesses as a political prop to promote the interests of the richest people in America.