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Billionaires' Surtax Would Affect Just 1% of Small Businesses


By John Martin - Posted on 29 November 2011

As it now stands, payroll taxes are set to go up at the end of the year. This impending hike would cost the typical American family almost $1000 next year, and would certainly impede the economy's path to recovery.

Yesterday, Democrats unveiled a plan to actually lower payroll taxes from their current levels and make sure they won't be raised until 2013 at the earliest. Their plan also cuts the payroll tax for 98% of U.S. businesses and gives extra incentives for businesses to hire new workers between now and the end of next year. To ensure these measures won't add to the deficit, Democrats are proposing a 3.25% surtax on incomes over $1 million. Naturally, this part of the plan isn't sitting pretty with Republicans, who are huge fans of anyone who has already achieved the American dream.
 
A spokesperson for House Speaker John Boehner had this to say in response: "Republicans have said that extending the payroll tax break is a potential area of common ground, but coupling it with a job-killing tax hike on small businesses makes no sense whatsoever."
 
Boehner's spokesperson added that about 34 percent of small business income would be affected by the proposed surcharge.
 
Technically, Boehner's spokesperson is correct; a hefty portion of small business income would be affected-- so long as your definition of "small businesses" includes large law firms, bond traders who invest some of their income in investment partnerships, or any of the 70% of million-dollar earners who find ways to refer to themselves "small business owners" when they file their taxes.
 
These individuals account for 34 percent of all small business income because they're not the mom and pop operations we normally think of when we think of small businesses-- they're part of large operations. The reality is only 1 percent of small businesses would be affected by the proposed tax increase-- something you'd never hear Republicans admit.
 
It is beyond comprehension how far Republicans will go to protect billionaires, even at the expense of blocking a payroll tax break for 98% of Americans. This should be a no brainer for both sides of the aisle to embrace. I guess putting country first really is just an empty slogan for Republicans.

This is a ridiculous debate and it is shameful that no media has done enough research to know it is ridiculous.   The 3.25% surcharge on millionaires will raise $16 billion, the cost of the payroll extension is $160 billion.  The D.C. lunatic math can not continue.   Take the $16 billion but another $150 billion is still needed.   The GAO has a report with $250-300 billion of waste listed, but nothing is done.  After arguing for a year over the deficit, spending increased $125 billion.  It will increase again next year.   I do not know how any politician can live with his/herself.   It is a disgrace that the super committee did not reform the tax code, did not reduce spending one dime and continues to lie about taxing the "rich" as a solution.  The 234,415 who earned over $1 million can not support the other 308,000,000 and it's time to stop arguing about it. Let the Bush tax cuts expire for those earning over $250,000, reform the tax code to eliminate most deductions, means test both Social Security and Medicare and raise the age to 67, end all wars and let the economy recover.

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