Wash. Post, NY Times let Boehner revive small business tax falsehood
SUMMARY: The Washington Post and The New York Times uncritically reported Rep. John Boehner's debunked suggestion that increasing taxes on those making more than $250,000 would cause a large percentage of small businesses to pay higher taxes. In fact, according to the Tax Policy Center, a mere 2 percent of tax returns that reported small business income in 2007 are in the top two income tax brackets, which include all filers with taxable incomes of more than $250,000.
In recent articles, The Washington Post and The New York Times uncritically reported House Minority Leader John Boehner's (R-OH) debunked suggestion that increasing taxes on those making more than $250,000 would cause a large percentage of small businesses to pay higher taxes. The Post reported on February 26 that President Obama's 2010 budget proposal "would reduce the value of tax deductions for families earning more than $250,000 by about 20 percent, according to administration documents." The article reported that Boehner said, "If the tax-deduction cap is enacted, it is likely to hit many small businesses." Likewise, in its February 25 article, the Times uncritically quoted Boehner's statement, "[I]s increasing taxes during an economic recession, especially on small businesses, the right way to accomplish that goal?" Neither the Post nor the Times pointed out that 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.
Boehner's unchallenged comments revive a false talking point from the 2008 campaign about then-Sen. Obama's proposal to increase taxes on those making more than $250,000. As Media Matters for America documented, Sen. John 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."
From the February 26 Washington Post article:
About half the money for the new fund would come by capping itemized tax deductions for Americans in the top income bracket. The proposal, which administration officials characterize as a "shared-responsibility issue," would reduce the value of tax deductions for families earning more than $250,000 by about 20 percent, according to administration documents.
[...]
If the tax-deduction cap is enacted, it is likely to hit many small businesses, said House Republican Leader John A. Boehner (Ohio).
"Everyone agrees that all Americans deserve access to affordable health care," he said, "but is increasing taxes during an economic recession, especially on small businesses, the right way to accomplish that goal?"
If the budget is approved by Congress, drug companies will be required to increase the rebate they pay on medications sold to Medicaid patients from 15 percent to 21 percent. The proposal, which would raise $19.5 billion over 10 years, is likely to spark strong opposition from the industry, which has argued that the current rebate cuts into profits.
From the February 25 New York Times article:
President Obama will propose further tax increases on the affluent to help pay for his promise to make health care more accessible and affordable, calling for stricter limits on the benefits of itemized deductions taken by the wealthiest households, administration officials said Wednesday.
The tax proposal, coming after recent years in which wealth has become more concentrated at the top of the income scale, introduces a politically volatile edge to the Congressional debate over Mr. Obama's domestic priorities.
The president will also propose, in the 10-year budget he is to release Thursday, to use revenues from the centerpiece of his environmental policy -- a plan under which companies must buy permits to exceed pollution emission caps -- to pay for an extension of a two-year tax credit that benefits low-wage and middle-income people.
The combined effect of the two revenue-raising proposals, on top of Mr. Obama's existing plan to roll back the Bush-era income tax reductions on households with income exceeding $250,000 a year, would be a pronounced move to redistribute wealth by reimposing a larger share of the tax burden on corporations and the most affluent taxpayers.
Administration officials said Mr. Obama would propose to reduce the value of itemized tax deductions for everyone in the top income tax bracket, 35 percent, and many of those in the 33 percent bracket -- roughly speaking, starting at $250,000 in annual income for a married couple.
Under existing law, the tax benefit of itemizing deductions rises with a taxpayer's marginal tax bracket (the bracket that applies to the last dollar of income). For example, $10,000 in itemized deductions reduces tax liability by $3,500 for someone in the 35 percent bracket.
Mr. Obama would allow a saving of only $2,800 -- as if the person were in the 28 percent bracket.
[...]
In the House, the Republican leader, Representative John A. Boehner of Ohio, telegraphed his side's opposition to any tax increases.
"Everyone agrees that all Americans deserve access to affordable health care," Mr. Boehner said in a statement, "but is increasing taxes during an economic recession, especially on small businesses, the right way to accomplish that goal?"
I guess the Replutocrats think that if they keep repeating this lie, the Media will stop bothering to correct them..... oh, wait, it's already happened.
The Democrats need to take it upon themselves to publicly debunk this myth as often as it takes. As media savvy as they are, Obama's team doesn't seem to realize yet that the Replutocrats own the media, and they'll have to find alternative means to get the truth past all the bullsh*t.
I expect the lies and misinformation from the talking heads in Washington but I know people personally (respected professionals whom I generally admire) who spout this nonsense. What's frustrating for me is that even when corrected they continue to believe their own lies and even if they don't believe them they still will spread falsehoods to anyone who will listen.
Heck, they'll believe it as they write the check to the IRS. That spreadsheet they just filled out will fail to register as usual.
Your right. What's even more crazy is that they don't even come close to qualifying for this tax increase. They continually vote against their own self interest and complain about legislation that will actually help them! That is what is so scary about ideology. Most of my friends are well educated and have proven time and again to be able to solve complex problems in the workplace, but ask them about politics and I get the craziest blind, no thinking, ideological answers!
It's called Joe-the-Plumbernomics.
"Everyone agrees that all Americans deserve access to affordable health care"
Now there's a loaded statement coming from a Troglodyte like Boner. If all Americans deserve it, doesn't that make it a "right"? And, if "everyone" agrees, why didn't the Republicans do anything about it after they strangled Hillary's Health Care plan in its crib?
I detect a whiff of Bullsh*t.
Yeah, what he means is of course "Republicans agree that all Americans deserve the health care they can pay for".
For the first time (ever?) the health care industry seems genuinely threatened. I love it.
I find it funny that they pretend to be willing to pay for sending every poor kid in America to a private school, but they are openly UNwilling to pay to send those poor kids to a doctor.
Of course, we know why.... diverting all that tax money to private schools would destroy the public school system, which they would consider a positive outcome. Then the private schools could unceremoniously dump the "undesirables" and everything would be peachy.
Good point!
John Boehner is quite possibly the worst politican in the history of the world. And I'm not talking about his ideology - he could be liberal as hell and I'd still be saying this. The problem with Boehner is that every time he opens his mouth, he ends up making his own party look incompetant or (in this case) uncaring and working contrary to the interest of the country.
It's like when he blamed Pelosi's "Partisan speech" as the reason the orignial $700B bank bailout failed to pass. I'm hearing this and thinking... well 99.9% of american HATED that legislation and he just gave Pelosi CREDIT for it not passing! (So THANK GOD for Nancy Pelosi!) AND HE MEANT IT AS A CRITICSIM!!! And he does this a LOT. It's like he tries to do the typical Republican/Conservative double-speak - projecting all of their own faults onto thier opponents - but he doesn't really know how to speak it (or he's just dismally out of touch). So it ends up sounding more like he's airing his own party's dirty laundry.
I do hope he keeps his leadship position for years to come though. With him at the helm, their ship can only sink. (I knew there was a reason I liked John Boehner so much!)
Am I misinformed, or is there really no difference between corporate taxes and personal income taxes?
One of the talking heads made an interesting point on television. I forget who it was, but he said that any "small" business making much over $250,000 in profit should probably incorporate anyway to take advantage of the lower Corporate tax rate.
Apparently a lot of small business owners file taxes as individuals, so they are subject to the higher taxes over $250,000.
Correct me if I'm wrong, but I was under the impression that incorporation legally segregated the individual from the business, thereby protecting personal property from liabilities incurred by the business.
That being the case, anyone making >$250k/yr from their small business who hasn't incorporated should be assessed a stoopidity surtax anyway.
Well, there ya go. I don't think Joe the Plumber thought that far ahead.
KO made that point on Countdown the other night. Others might have too, but I wouldn't expect to see it on Fkox. (That's a typo, but I like it.)
Coporate tax rates are basically a fixed rate, and generally a lower percentage than the highest marginal rate for the top end of personal income tax. Plus personal income tax comes out of OUR SALARIES, while Corporate Tax is paid buy businesses, based on what they have left AFTER our salaries (as well as all of their other expenses) are paid. And the laws governing how we calculate our income (and deductions) are very different and far less complex than the maze of accounting rules that apply to businesses.
(And don't forget - while business want to report as small a profit as possible to the government (for tax reasons) they want to report as LARGE a profit as possible to the shareholders! (Otherwise people won't invest in them!) Well the accounting rules for both of these activities overlap by about 90% - so some strategizing is necessary! (You can't make a ton of money AND lose a ton of money in the same year, after all!) But the likes of thee and me? Shoot, we just try to show as little as possible and be done with it.)
I don't understand something. When companies/corporations negotiate with unions, they ask for the union for concessions to help the company survive. The company still pays dividends and the top brass still get their largess. But when the compaines/corporations are asked for concessions, in this case, taxes, it is a burden on those entities. Everybody suffers at some point for some reason but the Corporations don't want to sacrifice when it is their turn.
I realize that if you raise the taxes, corporations will raise prices. If this is the case, they are not willing to 'sacrifice' (a BUSH term), to help the economy. WHY? Because the shareholders won't like it. Only the work force should sacrifice.
I realize that if you raise the taxes, corporations will raise prices.
Not true. (Not necessarily.) Prices are already as hish as they can possibly be at any given point. That's how "market forces" work. If they pay more in taxes, the can only raise prices if we have additional disposable income to pay. But you can't just raise prices just because your costs go up (look at GM and Ford!) But companies are ALWAYS trying to charge as much as possible. If a $0.05 increase was possible, it would have alreadyy been done. Competition keeps that at bay.
There is a giant hole in Republican logic on this issue.
They insist that only tax cuts will stimulate the economy, and tax hikes will stifle growth. Unfortunately for them, recent history doesn't support this claim.
Remember all the weeping and wailing and gnashing of teeth over Clinton's "Biggest tax increase in history"? They predicted economic collapse, but, instead, the 90s saw an economic boom. Then, following Numbnuts Bush's tax cuts for the wealthy, we saw a brief period of recovery (artificially stimulated by easy credit, we now know) followed by a disastrous crash.
So, on what evidence are they preaching the tax-cuts-cure-all mantra?
My experience these last few years is that tax cuts puts more operating capital into the owner's pocket who in turn uses that capital to outsource manufacturing to china and india, thus putting even more capital into his pocket. Who needs quality when you've got 3 billion potential customers who think transister radios are awesome technology!
These are the questions I keep asking the conservatives on this issue. I'm just going to copy from a recent thread;
Do you own a business? If so, have you ever let an employee go, or decided not to hire a new employee because your taxes were raised?
Do you work for somebody else who has done these things?
Do you know anybody personally who has?
Friend of a friend?
anecdotal?
Fictitious right wing email claiming to?
An example , with the essential numbers in revenues/expenses that is feasible?
Cheney2012, to his credit, at least tried to fake a generic anecdotal answer;
"I have known several business owners over the years who have SHUT DOWN completely because of increases in taxes."
What I never get is a credible example. I've owned a small business, I've worked for small and large companies, and have never seen an employer eliminate or add a job because of taxes. It's part of the Wingnut Gospel, and is used as a given, a starting point for their arguments, something that happens all of the time, but something that I've never seen a real world example of.
I'm not saying it's impossible, I'm just asking that anybody who wants to use this as a common occurence cite some reality-based example. Maybe some numbers, some specifics on the company, where were the revenues and expenses when this company decided it was better to pass up those profits than to pay taxes on them.
I've seen taxes used as an excuse by people who couldn't run a business, maybe that's the bottom line.
Excellent observation. In order to pay income taxes, a business must have taxable income... therefore indicating that the business is at least somewhat successful.
If the owner doesn't get to keep as much of his profit as he thinks he should, that's strictly a personal matter. It is a matter separate from the viability of the business.
Seems to me that LACK of taxable income would be more likely to cause a business to close.
Seeing as how what you pay in TAXES = (REVENUE-EXPENSES) X TAXRATE, it is a mathematic impossibility for any tax rate under "1" (which would be a 100% tax rate!) to turn a profit into a loss, or even turn a positive income into zero. If that happens to you: FIRE YOUR ACCOUNTANT, he's either a crook or a idiot. Because it is just. not. possible.
How true. I'll go out on a limb here, and say that, of all the reasons businesses fail, paying too much income tax is probably not very high on the list.
And they're back to square one. Gops claim the media has a liberal bias, in their minds, that gives them license to lie their sorry butts off and the sclm lets them get away with it while faux and flush just spew their delusional dreck and feed their dimwitted dittohead audience what they want to hear.
for anyone who has owned a small business as I do (10 employees/5mil in revenue), the comments here on incorporating are incorrect. Although there are liability issues to protect assets as reasons to incorporate there really are no tax benefits for it besides what you can write off as expenses as a c corp vs an s corp. As an s corp as an example I pay the 30-35% of my net profits in income tax, if I was a c corp, I would still pay the 30-35% in income tax on my paycheck as opposed to my income, however I would also have to pay a corporate tax IN ADDITION to my paycheck on the corporate profits. the advantage of a C corp is the ability to hide many more expenses, thus reducing your profits however I don't think many small business owners fall into that category. Before everyone starts replying with copies of the tax code, I am just telling you in black and white where most small businesses fall.
Isn't about time for Boehner to go one one of his "Crying Jags?" Does anyone know how long it's been since Boehner had his last "Crying Jag?"