CNN's King allowed McConnell to revive debunked small business tax claim

››› ››› JEREMY HOLDEN

CNN's John King allowed Sen. Mitch McConnell to revive the debunked claim that letting the Bush tax cuts expire for Americans making more than $250,000 would affect a large percentage of small businesses. In fact, according to the Tax Policy Center, 481,000 small businesses -- about 2 percent -- fall in the top two income tax brackets that would be affected by those increases.

During the February 22 edition of CNN's State of the Union, host John King allowed Senate Minority Leader Mitch McConnell (R-KY) to revive the debunked claim that letting the Bush tax cuts expire for Americans making more than $250,000 would affect a large percentage of small businesses. After King stated that "the Obama administration says it will, as he promised during the campaign, let the Bush tax cuts go away for Americans who make more than $250,000 a year," McConnell replied, "[W]hen the -- our good friends on the other side of the aisle say raising the taxes on the wealthy, what they're really talking about is small business. A vast majority of American small businesses pay taxes as individual taxpayers. So, we've got to ask ourselves whether increasing capital gains taxes, dividend taxes, and taxes on small business is a great thing to do in the middle of a deep recession."

Likewise, a February 22 Hill article reported: "McConnell said that tax hikes on the wealthy, which [President] Obama is expected to propose in his first budget, would hit small businesses."

McConnell's assertion is a revival of a false talking point made by Sen. John McCain during the 2008 presidential campaign. As Media Matters for America documented, McCain falsely claimed that "[i]f you are one of the 23 million small business owners in America who files as an individual rate payer, Senator Obama is going to raise your tax rates." In fact, according to the Tax Policy Center's table of 2007 tax returns that reported small business income, 481,000 of those returns -- about 2 percent -- are in the top two income tax brackets, which include all filers with taxable incomes of more than $250,000.

From the February 22 edition of CNN's State of the Union with John King:

KING: I want to start with the president's budget, and this promise we're hearing this morning to cut the federal budget deficit in half by the end of the first term. To do that, the Obama administration says it will, as he promised during the campaign, let the Bush tax cuts go away for Americans who make more than $250,000 a year. There are some other, what you would call, I assume, tax increases involved in that as well.

Let's start with that basic premise. The Democrats have the votes in the House, but they need some Republicans in the Senate as we learned in the stimulus battle. Will that fly, and do you think it's the right approach given the state of the economy?

McCONNELL: Well, I don't think raising taxes is a great idea, and when the -- our good friends on the other side of the aisle say raising the taxes on the wealthy, what they're really talking about is small business. A vast majority of American small businesses pay taxes as individual taxpayers. So, we've got to ask ourselves whether increasing capital gains taxes, dividend taxes, and taxes on small business is a great thing to do in the middle of a deep recession. I think most of my members will think that that's not a smart move.

KING: Another question for the government is the continuing financial institutions bailout.

From the February 22 Hill article:

Senate Minority Leader Mitch McConnell (R-Ky.) warned President Obama on Sunday not to include tax increases on the wealthy in his upcoming budget plan, saying that doing so wouldn't be a "smart move" during a recession.

McConnell said that tax hikes on the wealthy, which Obama is expected to propose in his first budget, would hit small businesses.

"So we have got to ask ourselves whether increasing capital gains taxes, dividend taxes and taxes on small businesses is a great thing to do in the middle of a deep recession," McConnell said on CNN on Sunday. "I think most of my members will think that that's not a smart move."

Posted In
Economy, Taxes
Network/Outlet
CNN
Person
John King
Show/Publication
State Of The Union
Stories/Interests
Economic Recovery Plan
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