On Fox News, Wall Street Journal senior economics writer Stephen Moore advanced a long-time Republican falsehood by claiming that "the big problem" with small business tax credits in the proposed jobs bill "is that a lot of small businesses are looking ahead at what is going to happen next year with the big increases on tax increases when the Bush tax cuts go away." However, despite Moore's suggestion that the Obama administration's proposal to eliminate the Bush tax cuts for wealthy taxpayers would affect a large percentage of small businesses, in fact, it would apply to fewer than 1.3 percent of all those who declare small business income.
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From the February 8 edition of Fox News' America's Newsroom:
GREGG JARRETT (co-host): Look, Steve, aren't those elements the kinds of things that Republicans normally embrace? And won't they be hard-pressed to object?
MOORE: Well, this package is certainly a lot better than the first one because it does involve some incentives for small businesses to hire, which I'm obviously very much in favor of. Two-thirds of all the jobs come from small businesses. The problem is, Gregg, at the very same time they're talking about new tax credits for small businesses to hire workers and so on -- by the way, which is something we tried in the 1970s; it didn't work too well -- the big problem here is that a lot of small businesses are looking ahead at what's going to happen next year with the big increases on tax increases when the Bush tax cuts go away. So I would be -- I think President Obama would be much better off just saying, look, we're just going to make sure that the tax rates that are in place right now don't go up because most of the businesses that get hammered by the tax increase next year will be the very same small businesses the president is trying to help in this package.
Obama's tax proposal would only raise taxes on fewer than 1.3 percent of those who claim small business income
Obama's proposal would end Bush tax cuts for individuals making over $200,000, families making over $250,000. The 2011 White House budget proposal states that "the President supports allowing those tax cuts that affect families earning more than $250,000 a year to expire and committing these resources to reducing the deficit instead. This step will have no effect on the 98 percent of all households who make less than $250,000." The budget plan lists several "Upper-Income Tax Provisions" that would roll back the Bush tax cuts for individuals with income greater than $200,000 and families with income greater than $250,000.
Fewer than 1.3 percent of those who claim small business income would be affected by expiration of Bush tax cuts to wealthy taxpayers. Despite Moore's claim that "most of the businesses" would "get hammered by the tax increase next year," according to the Tax Policy Center's table of 2009 tax returns that reported small-business income, 457,000 of those returns -- or 1.3 percent of them -- are in the top two income tax brackets, which include all filers with taxable incomes that would be affected by Obama's proposal to end those Bush tax cuts.
Moore revives GOP talking point previously parroted by the media
Claim previously advanced during presidential campaign, again in early 2009. As Media Matters for America documented, in July 2008, several media outlets uncritically advanced Sen. John McCain false claim 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 February and March 2009, several media figures adopted this false Republican talking point or allowed the falsehood to go unchallenged.