Kudos to NPR for airing the first clear, understandable story I’ve come across in the mainstream media on why there’s actually a substantive argument for retaining the Bush tax cuts for the wealthy.
No doubt you have heard Republicans say that raising taxes on incomes above $200,000 a year ($250,000 for couples) would hurt small businesses, along with the Democratic retort that it would affect barely 2 percent of those businesses. Well, here’s the explanation in a nutshell:
- The vast majority of small businesses might better be termed micro-businesses. NPR’s examples: “a hot dog vendor, a housecleaner, a guy selling T-shirts on eBay.” Not only do they not make $200,000 a year, but they don’t hire anyone.
- Small businesses that are substantial enough to hire more than a handful of people are relatively few in number, and make up a large share of the 2 percent cited by Democrats.
- Many if not most of those small businesses treat their business income as personal income for tax purposes. So, yes, raising taxes on incomes above the $200,000 threshold could very well harm their ability to invest and hire new employees.
Even so, the NPR story notes there’s a strong case to be made that small businesses would benefit far more from targeted measures than from retaining the Bush tax cut.
Bottom line: I learned something important I didn’t know about a much-debated public-policy issue. Isn’t that what journalism is for?