Soon after President Obama affirmed his intention to let the Bush tax cuts on income in excess of $250,000 expire at the end of the year, Sen. Marco Rubio (R-FL) warned that raising taxes on the wealthiest members of society would “wipe out some small businesses.” At the Atlantic Washington Ideas Forum on Thursday, Rubio acknowledged that Obama’s plan would lower the deficit by 7.7 percent every year, but argued that small businesses were somehow in danger:
The question becomes what problem are you solving and are you willing — are you prepared — to wipe out some small businesses in exchange for seven and a half percent of deficit reduction potentially? I think that’s a bad trade off.
Studies show the Bush tax cuts for the rich do practically nothing for economic growth, and in fact sharpen income inequality. Only 3 percent of small businesses would be affected by the expiration, according to the Joint Committee on Taxation. In fact, small businesses grew twice as fast under the old Clinton tax rates as they did under Bush.
While Rubio may not want to believe these studies, small business owners do; according to a recent poll, 57 percent of small business owners think that raising taxes on the wealthy would do less harm to the economy than spending cuts that would impact education, job training, and infrastructure investment.
Rubio also argued that the tax hike would be pointless, as millionaires and billionaires could simply game the system and “hire the best lawyers, lobbyists and accountants in America to figure out how not to pay those higher rates.” Despite widespread support for tax increases on the wealthy, Republicans are attempting to tie an extension of the Bush tax cuts to a deal to avoid the so-called “fiscal cliff” in early 2013.