Jane Whitesides Glasgow
October 3, 2010
John Boehner and Mitch McConnell are using spurious estimates to argue over the Bush tax cuts. One is always entitled to one's own opinion, but not to one's own facts.
Repealing the tax cuts for those earning over $250,000 would not affect 50 percent of small businesses -- unless, you include people who make a lot of money, but have few employees, such as hedge fund managers, the president, John Grisham, Tiger Woods and sole-practice trial lawyers. Estimates from Citizens for Tax Justice are that 2-3 percent of small business owners would be affected.
According to the Center on Budget and Policy Priorities, by extending the 2001 and 2003 tax cuts for those earning over 250,000, only the top 3 percent of people with any business income would benefit. Businesses don't hire because of tax cuts: they hire based on demand. Businesses are hurt by a lagging economy. Extending the tax cuts and adding a trillion dollars to deficits and debt over the next decade will deter robust growth, and truly hurt all businesses.
The Congressional Budget Office found that the cost of legislation enacted 2001-7 resulted in the tax cuts being responsible for 48 percent of the deficit. While we may argue over what we spend on, starving essential services is inefficient and raises costs over time.
Fiscal responsibility and revenue enhancement are needed to put our financial house in order. While extending the tax cuts for the top 2 percent of earners doesn't make good business sense, it also doesn't make sense in terms of fairness.
The Tax Policy Center found in 2007 that the effective tax rate for the top 400 families was 16.6 percent. Not exactly usury rates.