Obama Tax Hikes?

Here’s a pretty good example, even if it doesn’t seem to be working as yet, of how the right tries to drive the framing of issues. The Dingbat of the the North tweets:

Pls refer to Jan.1 tax changes appropriately: they're OBAMA TAX HIKES & they'll slam every American's savings, investments & job opportunity

Politifact debunks this, of course.

Palin and other Republicans often suggest that Obama and the Democrats want to see tax rates go up for all incomes. But that's not what they've been advocating for more than two years. President Barack Obama campaigned on maintaining the tax cuts for couples earning less than $250,000 while allowing the expiration of the tax cuts for families above that line. In fact, in a Dec. 2, 2010, vote, the vast majority of House Democrats supported a bill to do precisely that, with almost all Republicans voting against the bill. (House Speaker-to-be John Boehner, R-Ohio, went so far as to call the bill "chicken crap.")

But Politifact misses the point. Blame should have been assessed relentlessly by Democrats over the last year on Republicans. The argument goes something like this:

Republicans had a chance to make the tax cuts permanent when they made them.  But they couldn’t get it passed because Democrats were filibustering the cuts. So they used budget reconciliation and made them just 10 years to avoid the “Byrd rule” forbidding using reconciliation if it impacts the budget beyond 10 years. In other words, the GOP used the same tactic they accused Democrats of using to pass the health care bill. So not only are they hypocrites, they were financially reckless and pushed the budget reckoning down the road. But then, following the elephant to clean up the mess is well-known and thankless job.

Comments

[Bob Griendling]

C'mon Red Stater, I know your "leaders" in DC still push that canard, but those of you in the trenches know, as Mark Twain once put it, taffy is being pulled.

"So what does [failure to extend tax cuts] for those making more than $200,000 mean for your small business?

First — you personally are almost certainly not going to see a change in your tax rates. Not if you're one of the 98% of all small business owners who have less than $250,000 a year in adjusted gross income — $200,000 if you're single. Most Democrats and Republicans support the extension of these middle class tax cuts. The only way you'll see your taxes go up is if these cuts are held hostage to cuts for wealthier Americans.

Now, if you're one of the 2% of small companies that make more than a quarter of a million dollars after all expenses — first of all, good for you!

But should we increase taxes on those businesses now — in the midst of high unemployment? By increasing their taxes, won't we have a negative impact on hiring?

Nope.

First, you need to know it's likely that most of those "small businesses" reporting high income are neither small nor, possibly, businesses. For government tax purposes, the term "small business" can be misleading. What is included generally are all who report "business income" on a pass-through basis. These can be very wealthy individuals who have set up investments as partnerships or S corporations to reduce their taxes, including many hedge funds.

According to a 2008 study by the Joint Committee on Taxation — a nonprofit arm of Congress — 61% of all net income from partnerships and S corporations are earned by those with gross receipts of more than $10 million, and almost half — 43% — have receipts exceeding $50 million! Hardly small — and often not a business that hires anyone. So a huge bulk of the tax benefits would go to those who have no impact on job creation.

Will a tax cut for the wealthy have a trickle down benefit for small business? Nope.

According to the independent, highly-regarded Congressional Budget Office, the Bush era tax cuts have the lowest stimulative effect of 11 stimulus policies examined. For every $1 in tax cuts, only 10 cents to 40 cents are returned to the economy.

Compare that with something every small business employer can relate to — reducing employer's share of the payroll tax. According to the CBO, that would result in 40 cents to $1.20 back in the economy for every dollar spent. That would reduce the cost of having employees and make it easier to hire. A better, more targeted, small business tax cut."

Source: http://usat.ly/i3jqxf

In other words, Red Stater, the scare about the tax on small business is just a ruse so your party can protect the very, very wealthy who likely create virtually no jobs.

[CR UVa]

If small businesses suffer from these tax hikes that Democrats are insisting on, they will have a very difficult time shaking the idea of the tax hikes being tied to the president.