dieseldiva
Veteran Expediter
Use THIS CALCULATOR to find out!
Will You Miss The Bush Tax Cuts???
- Thread starter dieseldiva
- Start date
witness23
Veteran Expediter
Nope. According to the charts provided in the FAQ portion of the website you provided: The Tax Foundation - Taxpayers Face Uncertainty in 2011 As Bush and Obama Tax Cuts Expire With the "Making Work Pay" tax credit I will pay $800 less this year than last year. How 'bout you, will you miss the Bush tax cuts?
witness23
Veteran Expediter
Here is some more good information to check out.
PolitiFact | So-called wealthy are actually small business owners? The data is dubious
PolitiFact | So-called wealthy are actually small business owners? The data is dubious
dieseldiva
Veteran Expediter
Don't know yet, have to dig into my records at home next time we're there but I'm not liking the way it's sounding.
witness23
Veteran Expediter
You don't know if you'll make over 250,000(I am assuming you're filing married status) this year?
dieseldiva
Veteran Expediter
If those tax cuts are allowed to expire, it will effect everyone of ALL income levels. The 250k thing is a myth.
And yes, we know which side of the 250k we'll fall on....we have other things going on besides expediting.
Typical truck driver mentality.
witness23
Veteran Expediter
Yes you are correct, every tax bracket will go up if they do nothing. Congress will either extend the Bush tax cuts the way they are or they will pass a bill extending the Bush tax cuts for people under the 200,000(individual) and 250,000(married) threshold. This may help:
PolitiFact | Mike Pence says Democrats want all of Bush tax cuts to expire
witness23
Veteran Expediter
Sarah Palin on Sunday, August 1st, 2010 in an interview on "Fox News Sunday".
I actually caught this interview and couldn't believe she was saying these things with a straight face. The Democrats are not looking to let all the tax cuts expire and that is not what Wallace asked Palin. Before everyone comes out attacking the "Libtards", the "Regime", the "Obumma Cronies", the "Lamestream Media", etc, etc, please inform yourselves on this issue. There is a lot of mis-information out there on this subject, I am imploring, anyone who comments on this thread about this issue to keep it focused on the tax cuts. You can click on the link below for the whole story and check out their "SOURCES".
Now that I've said that, this thread will more than likely die a certain death and not be discussed any further. Oh well.
PolitiFact | Sarah Palin said Democrats are planning "the largest tax increase in U.S. history"
The Truth-O-Meter Says:
"Democrats are poised now to cause this largest tax increase in U.S. history."
Sarah Palin on Sunday, August 1st, 2010 in an interview on "Fox News Sunday"
Sarah Palin said Democrats are planning "the largest tax increase in U.S. history"
Share this story:
retweet154Sarah Palin said she wrote her notes on her hand so the "liberals" couldn't say she got her numbers wrong when she appeared on Fox News Sunday. Well, we're independent fact-checkers, and we still found accuracy issues with the former governor's statements on the expiring Bush tax cuts.
"Let's turn to the Bush tax cuts, which are also becoming a big issue, the Bush tax cuts for the wealthy," said host Chris Wallace. "The Obama White House is now saying end the tax cuts. And these are the tax cuts for the top 2 percent of all households in America. You can save $678 billion, and it won't hurt the recovery. Governor, if you're serious, as you say you are, about the deficit, don't you have to do something?"
"To reduce deficit spending and our enormous debt, you rein in spending," Palin replied. "You cut the budget. You don't take more from the private sector and grow government with it. ... The Obama administration and the Democrats in Congress -- they're all wet on this idea. It's idiotic to think about increasing taxes at a time like this."
Wallace: " But you know, they would argue, 'Look, the economy did just fine during the Clinton years. The rates on the top 2 percent would be restored to what they were during the Clinton years.' The Republicans keep talking about being deficit hawks. This is $678 billion you're not going to pay for. They're saying you're being hypocritical. I say 'you' -- I'm talking about Republicans."
Palin: "Yeah. No, this is going to result in the largest tax increase in U.S. history. And again, it's idiotic. And my palm isn't large enough to have written all my notes down on what this tax increase will result in. Let me just go through a couple of things that I want people to be aware of, because, you know, the spin coming from Gibbs and the White House -- you're never going to get the truth out of their messaging. But Democrats are poised now to cause this largest tax increase in U.S. history. It's a tax increase of $3.8 trillion over the next 10 years, and it will have an effect on every single American who pays an income tax. Small businesses especially will be hit hardest. ..."
Wallace: "Can I just ask you, what do you have written on your hand?"
Palin: "$3.8 trillion, next 10 years, so I didn't say 3.7 and then get dinged, you know, by the liberals saying I didn't know what I was talking about." (Read the complete exchange.)
What caught our attention for fact-checking purposes was her claim that the Democratic plan would result in "the largest tax increase in history."
Wallace's question was about letting the Bush tax cuts for the wealthy expire. President Barack Obama's plan would increase income taxes for individuals making more than $200,000 and for couples making more than $250,000, with indexing for inflation. Wallace mentions that the Republican proposal to retain the tax cuts for the wealthy is "$678 billion you're not going to pay for." That's a reasonable estimate of how much increasing taxes on top earners would generate over 10 years.
Palin, however, responded as if the Democrats intend to allow all the Bush tax cuts to expire for everyone. If that were to happen, it would increase tax revenues by approximately $3.8 trillion over ten years.
But that's not what Democrats are proposing; they want to leave tax rates untouched for people who make less. We've looked for a Democrat who supports letting all the Bush tax cuts expire, and we haven't been able to find one. (And in fact, the most notable person we've found who advocates letting them all expire is Alan Greenspan, the head of the Federal Reserve from 1987 to 2006. He said it would help bring down the deficit.) In fact, a handful of Democrats in Congress have supported keeping tax rates for the wealthy lower, too.
But, to be clear, the tax cuts passed during the Bush administration do expire at the end of 2010. So if Congress doesn't act, taxes will go up for most people. The reason the tax cuts have expiration dates is because they were passed via a procedure known as reconciliation, which only requires 50 votes in the Senate. At the time, members of Congress hesitated to make them permanent for fear of deficits.
So Palin is confusing the issue here by using numbers that assume all the tax cuts are going away. That is not the Democratic plan nor is it President Obama's plan.
Now, let's look at the potential tax increases in comparison with other tax increases throughout history. Economists like to do this by calculating tax increases as a percentage of the Gross Domestic Product, or GDP. GDP means a country's entire annual economic economic output; it's a way of measuring the entire economy. If we calculate tax increases as a percentage of GDP, it means we don't have to worry about distortions from variables like inflation or economic growth.
The most prominent study of tax increases and tax cuts over time was done by the U.S. Treasury Department, "Revenue Effects of Major Tax Bills." It calculated the size of all major tax provisions from 1940 to 2006 by calculating them as a percentage of GDP.
There are no formal congressional proposals yet to keep the Bush tax cuts in place, so we don't have precise estimates from official sources like the nonpartisan Congressional Budget Office. Still, there's a good bit of consensus on what the tax increases would look like, both if lower rates expired only for high earners and also for all incomes. Wallace's number of $678 billion over 10 years is reasonable for high earners, and Palin's estimate of $3.8 trillion over 10 years is within a reasonable range, if you're talking about all taxpayers. (We've also seen estimates of $3.7 trillion and $3.2 trillion.)
We ran the number with some help from tax experts and found that if only the tax cuts for high earners expire, the resulting tax increases would not be the largest in history. Tax increases for high earners would be roughly 0.4 percent of GDP in the first year they take effect. That's significantly less than a 1982 tax increase signed into law by President Ronald Reagan. The tax increase resulting from the Tax Equity and Fiscal Responsibility Act of 1982 came to 1.23 percent of GDP when the tax changes were fully implemented, four years after the law's passage.
If you let all the Bush tax cuts expire, the tax increase would come to just above 2.2 percent of GDP. Clearly, that would be larger than the Reagan tax hike of 1982. But it would be smaller than one of the tax increases passed during World War II -- the Revenue Act of 1942, which is estimated at 5.04 percent of GDP.
But again, letting all the tax cuts expire isn't the plan the Democrats are proposing, and it's not what Wallace asked Palin.
Palin said, "Democrats are poised now to cause this largest tax increase in U.S. history." She was asked about tax cuts for the top 2 percent. Either Palin is confused about the revenue numbers involved with extending the tax cuts, or she's willfully distorting the Democratic plans. We'll let you be the judge of that. Regardless, Wallace was very specific about asking her about tax increases for the top 2 percent. And that does not represent the largest tax increase in history. The unlikely outcome that she seems to be talking about -- that all of the Bush tax cuts will be repealed -- wouldn't be the largest tax increase in history either. Palin read the number on her hand correctly, but that's about all she got right. So we rate her statement Pants on Fire.
I actually caught this interview and couldn't believe she was saying these things with a straight face. The Democrats are not looking to let all the tax cuts expire and that is not what Wallace asked Palin. Before everyone comes out attacking the "Libtards", the "Regime", the "Obumma Cronies", the "Lamestream Media", etc, etc, please inform yourselves on this issue. There is a lot of mis-information out there on this subject, I am imploring, anyone who comments on this thread about this issue to keep it focused on the tax cuts. You can click on the link below for the whole story and check out their "SOURCES".
Now that I've said that, this thread will more than likely die a certain death and not be discussed any further. Oh well.
PolitiFact | Sarah Palin said Democrats are planning "the largest tax increase in U.S. history"
The Truth-O-Meter Says:
"Democrats are poised now to cause this largest tax increase in U.S. history."
Sarah Palin on Sunday, August 1st, 2010 in an interview on "Fox News Sunday"
Sarah Palin said Democrats are planning "the largest tax increase in U.S. history"
Share this story:
retweet154Sarah Palin said she wrote her notes on her hand so the "liberals" couldn't say she got her numbers wrong when she appeared on Fox News Sunday. Well, we're independent fact-checkers, and we still found accuracy issues with the former governor's statements on the expiring Bush tax cuts.
"Let's turn to the Bush tax cuts, which are also becoming a big issue, the Bush tax cuts for the wealthy," said host Chris Wallace. "The Obama White House is now saying end the tax cuts. And these are the tax cuts for the top 2 percent of all households in America. You can save $678 billion, and it won't hurt the recovery. Governor, if you're serious, as you say you are, about the deficit, don't you have to do something?"
"To reduce deficit spending and our enormous debt, you rein in spending," Palin replied. "You cut the budget. You don't take more from the private sector and grow government with it. ... The Obama administration and the Democrats in Congress -- they're all wet on this idea. It's idiotic to think about increasing taxes at a time like this."
Wallace: " But you know, they would argue, 'Look, the economy did just fine during the Clinton years. The rates on the top 2 percent would be restored to what they were during the Clinton years.' The Republicans keep talking about being deficit hawks. This is $678 billion you're not going to pay for. They're saying you're being hypocritical. I say 'you' -- I'm talking about Republicans."
Palin: "Yeah. No, this is going to result in the largest tax increase in U.S. history. And again, it's idiotic. And my palm isn't large enough to have written all my notes down on what this tax increase will result in. Let me just go through a couple of things that I want people to be aware of, because, you know, the spin coming from Gibbs and the White House -- you're never going to get the truth out of their messaging. But Democrats are poised now to cause this largest tax increase in U.S. history. It's a tax increase of $3.8 trillion over the next 10 years, and it will have an effect on every single American who pays an income tax. Small businesses especially will be hit hardest. ..."
Wallace: "Can I just ask you, what do you have written on your hand?"
Palin: "$3.8 trillion, next 10 years, so I didn't say 3.7 and then get dinged, you know, by the liberals saying I didn't know what I was talking about." (Read the complete exchange.)
What caught our attention for fact-checking purposes was her claim that the Democratic plan would result in "the largest tax increase in history."
Wallace's question was about letting the Bush tax cuts for the wealthy expire. President Barack Obama's plan would increase income taxes for individuals making more than $200,000 and for couples making more than $250,000, with indexing for inflation. Wallace mentions that the Republican proposal to retain the tax cuts for the wealthy is "$678 billion you're not going to pay for." That's a reasonable estimate of how much increasing taxes on top earners would generate over 10 years.
Palin, however, responded as if the Democrats intend to allow all the Bush tax cuts to expire for everyone. If that were to happen, it would increase tax revenues by approximately $3.8 trillion over ten years.
But that's not what Democrats are proposing; they want to leave tax rates untouched for people who make less. We've looked for a Democrat who supports letting all the Bush tax cuts expire, and we haven't been able to find one. (And in fact, the most notable person we've found who advocates letting them all expire is Alan Greenspan, the head of the Federal Reserve from 1987 to 2006. He said it would help bring down the deficit.) In fact, a handful of Democrats in Congress have supported keeping tax rates for the wealthy lower, too.
But, to be clear, the tax cuts passed during the Bush administration do expire at the end of 2010. So if Congress doesn't act, taxes will go up for most people. The reason the tax cuts have expiration dates is because they were passed via a procedure known as reconciliation, which only requires 50 votes in the Senate. At the time, members of Congress hesitated to make them permanent for fear of deficits.
So Palin is confusing the issue here by using numbers that assume all the tax cuts are going away. That is not the Democratic plan nor is it President Obama's plan.
Now, let's look at the potential tax increases in comparison with other tax increases throughout history. Economists like to do this by calculating tax increases as a percentage of the Gross Domestic Product, or GDP. GDP means a country's entire annual economic economic output; it's a way of measuring the entire economy. If we calculate tax increases as a percentage of GDP, it means we don't have to worry about distortions from variables like inflation or economic growth.
The most prominent study of tax increases and tax cuts over time was done by the U.S. Treasury Department, "Revenue Effects of Major Tax Bills." It calculated the size of all major tax provisions from 1940 to 2006 by calculating them as a percentage of GDP.
There are no formal congressional proposals yet to keep the Bush tax cuts in place, so we don't have precise estimates from official sources like the nonpartisan Congressional Budget Office. Still, there's a good bit of consensus on what the tax increases would look like, both if lower rates expired only for high earners and also for all incomes. Wallace's number of $678 billion over 10 years is reasonable for high earners, and Palin's estimate of $3.8 trillion over 10 years is within a reasonable range, if you're talking about all taxpayers. (We've also seen estimates of $3.7 trillion and $3.2 trillion.)
We ran the number with some help from tax experts and found that if only the tax cuts for high earners expire, the resulting tax increases would not be the largest in history. Tax increases for high earners would be roughly 0.4 percent of GDP in the first year they take effect. That's significantly less than a 1982 tax increase signed into law by President Ronald Reagan. The tax increase resulting from the Tax Equity and Fiscal Responsibility Act of 1982 came to 1.23 percent of GDP when the tax changes were fully implemented, four years after the law's passage.
If you let all the Bush tax cuts expire, the tax increase would come to just above 2.2 percent of GDP. Clearly, that would be larger than the Reagan tax hike of 1982. But it would be smaller than one of the tax increases passed during World War II -- the Revenue Act of 1942, which is estimated at 5.04 percent of GDP.
But again, letting all the tax cuts expire isn't the plan the Democrats are proposing, and it's not what Wallace asked Palin.
Palin said, "Democrats are poised now to cause this largest tax increase in U.S. history." She was asked about tax cuts for the top 2 percent. Either Palin is confused about the revenue numbers involved with extending the tax cuts, or she's willfully distorting the Democratic plans. We'll let you be the judge of that. Regardless, Wallace was very specific about asking her about tax increases for the top 2 percent. And that does not represent the largest tax increase in history. The unlikely outcome that she seems to be talking about -- that all of the Bush tax cuts will be repealed -- wouldn't be the largest tax increase in history either. Palin read the number on her hand correctly, but that's about all she got right. So we rate her statement Pants on Fire.
bobwg
Expert Expediter
Witness23 you claim the Dems only want to let the tax on the wealthy expire why should i belive that they will keep the other tax cuts. The Dems claimed to bring change like open transparent government I would not call the activities around passage of the Health care bill open and transparent with back room bribes etc and by the way the amount of money collected thru taxes is not the problem it is the SPENDING this government continues to do 3 trillion dollars just since OBama took office and alot of small business like family farms will fall into that 250,000 and up bracket
witness23
Veteran Expediter
Link: http://www.politifact.com/truth-o-m...er-claims-democrats-want-hit-small-businesse/
The Truth-O-Meter Says:
"Ninety-four percent of small businesses will face higher taxes under the Democrats' plan."
Randy Neugebauer on Thursday, July 29th, 2010 in a Townhall.com guest blog post
Lawmaker claims Democrats want to hit small businesses with tax increases
Share this story:
retweet49We're in the middle of a recession, but Democrats want to raise taxes on small businesses. At least, that's become a popular conservative talking point as Congress gets ready to consider the Bush-era tax cuts set to expire at the end of 2010. Rep. Randy Neugebauer, a Texas Republican, repeated the charge in a July 29, 2010 blog post on Townhall.com, a popular online forum for conservative editorials.
"With 9.5 percent of the population unemployed, these higher taxes would come at a time when taxpayers can least afford it. The threat of the largest tax hike in history is creating widespread uncertainty for small businesses that could otherwise be creating jobs and expanding. After all, according to the Joint Committee on Taxation, 94 percent of small businesses will face higher taxes under the Democrats' plan. If their taxes are going to be higher, business owners are going to hold off on hiring and expansions. The unknowns for small businesses are simply taxing the certainty out of our economy," Neugebauer wrote.
We were suspicious that taxes would increase for so many small businesses, so we decided to look into it.
Neugebauer's office sent us a copy of a report issued by the Republican staff from the Congressional Committee on Ways & Means. The document, entitled "Democrats' Ticking Tax Bomb, Part I", states that "starting January 1, 2011 -- less than six months from now -- an unprecedented, $3.8 trillion tax increase is scheduled to kick in, affecting every American who pays income taxes." At the bottom of the first page is a reference to the Joint Committee on Taxation, a nonpartisan tax policy and revenue estimating resource for Congress. JCT estimated that in 2007, 94 percent of U.S. businesses were S corporations, partnerships, or sole proprietorships, which means that the business owners pay taxes at the individual tax rates, the document states.
We first wanted to confirm that in 2007, 94 percent of businesses were S corporations, partnerships, and sole proprietorships. Indeed, in 2007, the last year for which data is available, there were a total of 32,087,881 businesses, according to data collected by the Internal Revenue Service. In the same year, there were also 3,989,893 S-corporations, 3,096,334 partnerships, and 23,122,698 nonfarm sole proprietorships. Do the math, and you get a little over 94 percent.
But that's just about the only part of the statement that's accurate.
It is true that if Congress takes no action, taxes will go up for every single tax bracket starting Jan. 1, 2011. If we assume that reporting income from an S corporation, a partnership, or a sole proprietorship means that one is a small business owner (more on that later), then 94 percent of "small businesses" will face tax increases. But there are multiple problems with such an assessment.
First, Neugebauer's statement makes it seem as though the "Democratic plan" is to let all of the tax cuts expire. That is not the case. As we previously pointed out, Democratic officials have consistently said that they intend to let only the tax cuts for the wealthiest individuals lapse. The cutoff they usually suggest is $200,000 for individuals and $250,000 for married couples filing jointly. President Barack Obama's 2011 budget proposal sets the cutoff at $195,550 for individuals and $237,300 for married couples. In case you're wondering about the discrepancy, the $200,000/$250,000 figures reflect income in 2009 dollars (i.e. not adjusted for inflation in 2011) before deductions and personal exemptions.
What impact would raising taxes on the top two income brackets have on small businesses? According to the Joint Committee on Taxation, the same source that Neugebauer cited in his blog post, "In 2011 just under 750,000 taxpayers with net positive business income...will have marginal rates of 36 or 39.6 percent under the president's proposal." That translates into only 3 percent of all taxpayers with positive business income. Yes, you read that right. Only 3 percent of all taxpayers who reported having positive business income will see their taxes go up under the proposed Democratic initiative.
We also consulted experts at the Tax Policy Center, a joint project from the liberal-to-centrist-leaning Brookings Institute and the liberal Urban Institute. James Nunns, a researcher at the Urban Institute, directed us to the center's July 2010 analysis of the distribution of business income by statutory marginal rate for the year 2011. The report assumes that Congress goes through with its plan to only increase taxes on individuals making over $200,000 and couples with over $250,000 in income. It turns out, 774,000 tax filers in the top two brackets --the only ones that will see a tax increase -- will have positive business income. Divide that by the roughly 36 million tax filers who report business income (positive or negative), and you get 2.1 percent. In other words, still assuming that having any amount of income from a small business means that you are actually a business owner (big assumption), only about 2.1 percent of businesses will face the prospect of higher taxes based on the Democratic proposal.
Finally, as we suggested earlier, reporting income from an S-corporation or a partnership does not necessarily confer the title of small business owner. Anyone who earns money from a source other than a regular job -- for instance consulting or public speaking -- may report it as income from an S-corporation. So too might those who make most of their income from partnerships, such as law firms and medical practices. And it could include investors who have little involvement in the day-to-day operations of a company.
Consider that, in the highest income tax bracket, the average income of filers who report having some income from business is $718,827. In fact, the TPC analysis shows that in the second-highest tax bracket, only 26.2 percent of the tax filers reported that at least 50 percent of their income actually came from the business. In the highest bracket, the percentage is 32.5.
Neugebauer said that "94 percent of small businesses will face higher taxes under the Democrats plan." The statement is problematic in several ways. First, it implicitly assumes that the Democratic plan is to let all of the tax cuts lapse, when, in fact, Democratic officials have consistently said that they intend to raise taxes only for the wealthiest individuals. Second, two independent studies that looked at the impact of the Democratic proposal on small businesses found that only between 2 to 3 percent of tax filers who report having what can be thought of as small business income will be affected. One of those studies came from the very source that Neugebauer incorrectly cited. Finally, reporting business income doesn't equal owning a small business, and data from the Tax Policy Center confirm that in the top tax bracket, only about a third of the tax filers report having at least 50 percent of their income from a business. We looked and looked for a shred of truth and couldn't find one, so we rate this Pants on Fire.
The Truth-O-Meter Says:
"Ninety-four percent of small businesses will face higher taxes under the Democrats' plan."
Randy Neugebauer on Thursday, July 29th, 2010 in a Townhall.com guest blog post
Lawmaker claims Democrats want to hit small businesses with tax increases
Share this story:
retweet49We're in the middle of a recession, but Democrats want to raise taxes on small businesses. At least, that's become a popular conservative talking point as Congress gets ready to consider the Bush-era tax cuts set to expire at the end of 2010. Rep. Randy Neugebauer, a Texas Republican, repeated the charge in a July 29, 2010 blog post on Townhall.com, a popular online forum for conservative editorials.
"With 9.5 percent of the population unemployed, these higher taxes would come at a time when taxpayers can least afford it. The threat of the largest tax hike in history is creating widespread uncertainty for small businesses that could otherwise be creating jobs and expanding. After all, according to the Joint Committee on Taxation, 94 percent of small businesses will face higher taxes under the Democrats' plan. If their taxes are going to be higher, business owners are going to hold off on hiring and expansions. The unknowns for small businesses are simply taxing the certainty out of our economy," Neugebauer wrote.
We were suspicious that taxes would increase for so many small businesses, so we decided to look into it.
Neugebauer's office sent us a copy of a report issued by the Republican staff from the Congressional Committee on Ways & Means. The document, entitled "Democrats' Ticking Tax Bomb, Part I", states that "starting January 1, 2011 -- less than six months from now -- an unprecedented, $3.8 trillion tax increase is scheduled to kick in, affecting every American who pays income taxes." At the bottom of the first page is a reference to the Joint Committee on Taxation, a nonpartisan tax policy and revenue estimating resource for Congress. JCT estimated that in 2007, 94 percent of U.S. businesses were S corporations, partnerships, or sole proprietorships, which means that the business owners pay taxes at the individual tax rates, the document states.
We first wanted to confirm that in 2007, 94 percent of businesses were S corporations, partnerships, and sole proprietorships. Indeed, in 2007, the last year for which data is available, there were a total of 32,087,881 businesses, according to data collected by the Internal Revenue Service. In the same year, there were also 3,989,893 S-corporations, 3,096,334 partnerships, and 23,122,698 nonfarm sole proprietorships. Do the math, and you get a little over 94 percent.
But that's just about the only part of the statement that's accurate.
It is true that if Congress takes no action, taxes will go up for every single tax bracket starting Jan. 1, 2011. If we assume that reporting income from an S corporation, a partnership, or a sole proprietorship means that one is a small business owner (more on that later), then 94 percent of "small businesses" will face tax increases. But there are multiple problems with such an assessment.
First, Neugebauer's statement makes it seem as though the "Democratic plan" is to let all of the tax cuts expire. That is not the case. As we previously pointed out, Democratic officials have consistently said that they intend to let only the tax cuts for the wealthiest individuals lapse. The cutoff they usually suggest is $200,000 for individuals and $250,000 for married couples filing jointly. President Barack Obama's 2011 budget proposal sets the cutoff at $195,550 for individuals and $237,300 for married couples. In case you're wondering about the discrepancy, the $200,000/$250,000 figures reflect income in 2009 dollars (i.e. not adjusted for inflation in 2011) before deductions and personal exemptions.
What impact would raising taxes on the top two income brackets have on small businesses? According to the Joint Committee on Taxation, the same source that Neugebauer cited in his blog post, "In 2011 just under 750,000 taxpayers with net positive business income...will have marginal rates of 36 or 39.6 percent under the president's proposal." That translates into only 3 percent of all taxpayers with positive business income. Yes, you read that right. Only 3 percent of all taxpayers who reported having positive business income will see their taxes go up under the proposed Democratic initiative.
We also consulted experts at the Tax Policy Center, a joint project from the liberal-to-centrist-leaning Brookings Institute and the liberal Urban Institute. James Nunns, a researcher at the Urban Institute, directed us to the center's July 2010 analysis of the distribution of business income by statutory marginal rate for the year 2011. The report assumes that Congress goes through with its plan to only increase taxes on individuals making over $200,000 and couples with over $250,000 in income. It turns out, 774,000 tax filers in the top two brackets --the only ones that will see a tax increase -- will have positive business income. Divide that by the roughly 36 million tax filers who report business income (positive or negative), and you get 2.1 percent. In other words, still assuming that having any amount of income from a small business means that you are actually a business owner (big assumption), only about 2.1 percent of businesses will face the prospect of higher taxes based on the Democratic proposal.
Finally, as we suggested earlier, reporting income from an S-corporation or a partnership does not necessarily confer the title of small business owner. Anyone who earns money from a source other than a regular job -- for instance consulting or public speaking -- may report it as income from an S-corporation. So too might those who make most of their income from partnerships, such as law firms and medical practices. And it could include investors who have little involvement in the day-to-day operations of a company.
Consider that, in the highest income tax bracket, the average income of filers who report having some income from business is $718,827. In fact, the TPC analysis shows that in the second-highest tax bracket, only 26.2 percent of the tax filers reported that at least 50 percent of their income actually came from the business. In the highest bracket, the percentage is 32.5.
Neugebauer said that "94 percent of small businesses will face higher taxes under the Democrats plan." The statement is problematic in several ways. First, it implicitly assumes that the Democratic plan is to let all of the tax cuts lapse, when, in fact, Democratic officials have consistently said that they intend to raise taxes only for the wealthiest individuals. Second, two independent studies that looked at the impact of the Democratic proposal on small businesses found that only between 2 to 3 percent of tax filers who report having what can be thought of as small business income will be affected. One of those studies came from the very source that Neugebauer incorrectly cited. Finally, reporting business income doesn't equal owning a small business, and data from the Tax Policy Center confirm that in the top tax bracket, only about a third of the tax filers report having at least 50 percent of their income from a business. We looked and looked for a shred of truth and couldn't find one, so we rate this Pants on Fire.
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bobwg
Expert Expediter
You know when most people have money problems and can not raise income they ususally cut down on spending but when it comes to Democrats they always say raise taxes never cut spending they wont even cut wasteful spending the only time they want to cut spending is to gut the military but then they take the money cut from the military and spend it some where else
witness23
Veteran Expediter
First off, it is not "I" that claim anything. Look, either one or two things will happen with the Bush Tax Cuts when they are set to expire at the end of the year 1) They will let them expire and they will go back to pre-2001 tax brackets or 2) They will extend the Bush Tax Cuts except for those making over $200,000 and $250,000 those would go back to pre-2001 levels.
I totally agree with you, spending needs to be halted but we also have to bring down the deficit, this is but one way of many they can do to start that process. Everyones tax brackets will stay the same except for a small 2-3% of total taxpayers will be effected. If you have sources saying otherwise I would love to compare them.
I am not at all familiar on what kind of money "family" farms bring in, if you have some sources I would be interested in seeing how many "family" farms would fall into this conversation.
dieseldiva
Veteran Expediter
Getting to the 250K mark might not be as difficult as most people would think. For certain, we have white glove people that do that and then what about fleet owners....are these people "rich"??
In a former life, I co-owned a very small gas station/carryout and it wasn't unusual to go over the 250K mark...and that was in the early 80's.
bobwg
Expert Expediter
Sounds like OVM is cheating on his taxes legally LOL WE should go to a flat tax say 15% on all income over $50,000 adjusted for inflation each year with no deductions get the accountants and lawyers out of this or better yet go to a national sales tax as long as all income related taxes are repealed
witness23
Veteran Expediter
Exactly.
Sounds as if you probably get a refund at the end of the year OVM, am I right? If so you are one of those lazy bums who do not pay taxes!!!
Dakota
Veteran Expediter
We just need to get rid of The IRS(BTW it spells Theirs)
and just have a sales tax, if you buy something you pay a tax if you don't then you don't pay a tax
Funny how this would work, the rich would end up paying more in taxes because they spend more. It's so simple even a cave man could do it
and just have a sales tax, if you buy something you pay a tax if you don't then you don't pay a tax
Funny how this would work, the rich would end up paying more in taxes because they spend more. It's so simple even a cave man could do it