Here we go again! It just ain't so. And yet, MSNBC's Andrea Mitchell sat there like a bump on a stump and let him repeat this golden oldie Republican lie. Interim Chair Donna Brazile likewise said nothing. Democrats need to hammer Republicans on this day and night, as too many people are fooled by this egregious lie.
BIG MISCONCEPTIONS ABOUT SMALL BUSINESS AND TAXES
By Chye-Ching Huang and James Horney
Supporters of various tax benefits for high- income households often claim that failure to maintain them would have an undue effect on many small businesses. But even assuming a broad definition of “small business,” such claims are often exaggerated or false. This paper examines three such claims.
First, critics charge that allowing the 2001 tax cut’s reduction in the top two marginal income tax rates for individual taxpayers to expire as scheduled would affect a large proportion of small-business owners. In fact, only 1.9 percent of filers with any small-business income are projected to face either of the top two income tax rates in 2009.1 By contrast, more than 14 percent of filers with small-business income claim the Earned Income Tax Credit (EITC) for low-income workers. Thus, strengthening the EITC could help more than seven times as many small businesses as reducing the top income tax rates.
Second, critics often greatly exaggerate the burden of the estate tax on small businesses. Only a tiny proportion of the few estates that owe any estate tax have significant small business or farm assets. Furthermore, the small businesses and farm estates that do owe estate.
http://www.cbpp.org/files/8-29-08tax.pdf
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