NBC Lies About Small Business Taxes
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On MSNBC's Morning Joe, CNBC's Maria Bartiromo lied about tax increases for small business, and MediaMatters busted her:
small businesses, you know, are putting $250,000 in revenue out there, and they're going to get impacted -- and this is the single largest creator of jobs.
So Bartiromo says small business taxes will be raised if the business grosses over $250,000 in revenue. But that's a lie.
First, a small business that is not a personal business is taxed at corporate tax rates, which will not change under Obama's plan.
Second, a small business that is a personal business will only see higher taxes on the profit (i.e. personal income) that exceeds $250,000, not the gross revenue.
So how many small businesses would be affected? Just 1.5% (481,000) of all small businesses, according to the Tax Policy Center. In other words, 98.5% of small businesses will get a tax cut!
Even for the unlucky 1.5%, the tax increase is tiny: the value of tax deductions for families earning over $250,000 would drop from 35% to 28%. So $10,000 in deductions would save a wealthy taxpayer $2,800 in taxes instead of $3,500 - a small net tax increase of $700. Amazingly enough, that's how deductions worked in the 1986 tax bill signed by Saint Ronald Reagan.
The core rightwing argument is that this tiny tax hike will cause small businesses to cut back or even shut down. This is a Big Lie - obviously it will have no impact on small businesses whatsoever.
So where is this Big Lie coming from? House Republican Leader John Boehner and the stenographers at the Pentagon Post
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?"
and the Telmex Times:
"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?"
Update 1: Joe later echoed Maria's lie on Twitter:
$250k also drags in small businesses, who generate 75% of US jobs. Bad news for economy.
Update 2: Sean Quinn reports on the incredible attack on Robert Gibbs by White House "reporters" who mostly make over $250K themselves
Gibbs: I think the President was pretty clear on Tuesday. We are talking about people who earn in excess of a quarter of a million dollars a year.
Reid: And a huge percentage of those people are small business owners.
Gibbs: Some of them are, sure. Some of them are big business owners. Some of them are home run hitters in Major League Baseball. Some of them run kickoffs back for a living. Some of them are the President of the United States.
Q (off mike): -- create jobs?
Gibbs: Certainly some of them, that's what their job is. But I would reject this overall premise that when we're asking for tax fairness from the American people, that this is going to kill jobs. I guess if I follow the logic of the Republicans on Capitol Hill, how do you explain last month's unemployment figures? (Pause.) Under current tax rates? 550,000 jobs.
Reid: (Long pause) It's a unique moment.
Gibbs: (Laughs heartily) Apparently, it always is.... The president ran specifically on the promises that are contained in what he believes is a blueprint and a vision for our future. And that's what the the American people, that's the result they rendered in November.