A little truth vigilantism could go a long way toward rejecting a pernicious myth that has poisoned the tax debate for more than three years.
On Monday, President Obama formally released his budget outline and renewed the debate over allowing the Bush tax cuts for the wealthiest Americas to expire on schedule. On cue, conservatives played the “small business” card, claiming that raising taxes on the rich would amount to “massive tax increases on small businesses.”
While this knee-jerk attack is unsupported by evidence, it is fully supported by the media's silent acquiescence.
A spokesman for House Speaker John Boehner told the Washington Post that Obama's proposed budget would levy “massive tax increases on small business.” House Majority leader Eric Cantor told the Associated Press that Obama's budget “calls for massive tax increases on hardworking families and small businesses.” On CNN, Rep. Jeb Hensarling (R-TX) savaged the president's budget for supposedly “raising taxes on small businesses and job creators.”
None of these claims were challenged.
Nonpartisan analysts -- including the Tax Policy Center and the Joint Committee on Taxation -- have looked at the effect of letting the Bush tax cuts expire for the wealthy and determined that less than 3 percent of the individuals affected pay small business income.
Even that figure is inflated. The Center on Budget and Policy Priorities has pointed out that much of this income is generated at large law firms and accounting firms, and through investments in financial and real estate partnerships: “These are not what most Americans think of when they hear the term 'small business.' ”
While the impact on small businesses is small, the impact of the media debate could be significant. In a July 2011 Washington Post-ABC News poll, respondents were asked whether Obama or congressional Republicans cared more about the economic interests of small businesses; voters were far more likely to name Obama. With numbers like that, it's not surprising that conservatives pull out the “small business” card whenever Obama promotes raising taxes on the wealthy.
Moreover, voters overwhelmingly support increasing taxes on households making a million dollars or more.
Playing the “small business” card to distort the tax debate isn't a new trick. In February 2009, Boehner told the Post and the New York Times that letting the Bush tax cuts expire on upper income Americans would hurt “small businesses.” In March 2009, AP reported that “Republicans say” that increasing taxes on the wealthiest Americans would “hurt small businesses.” It's been played time and time again during the Obama administration.
Nor is this play limited to attacks on the budget. Fox & Friends' Gretchen Carlson took the maneuver to its logical extreme in 2009, arguing that extending the school year would have disastrous consequences for ... you guessed it, small businesses.
Conservatives shouting “small business” at an ever growing number of policies they oppose is only half the con. It's the willingness of reporters to take that claim at face value -- despite the evidence to the contrary -- that transforms the “small business” joker into a trump card.
In January, New York Times public editor Arthur Brisbane sparked a media controversy when he asked whether it was the newspaper's responsibility to be "a truth vigilante." Brisbane asked:
[H]ow can The Times do this in a way that is objective and fair? Is it possible to be objective and fair when the reporter is choosing to correct one fact over another?
Jay Rosen, a journalism professor at New York University, said Brisbane's post exposed the consequences of newsrooms letting the quest for “objectivity” outrank what he called “truthtelling” as a newsroom ideal.
Until journalists show a willingness to challenge these claims, conservatives will keep gaming the tax debate with the “small business” card.