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  • Chart: How 5.4% Surtax Hits Small Business, State by State

    Rep. Charlie Rangel of New York and other House Democrats propose to pay for their $1.3 trillion bill to create government-run health care with a 5.4 percent surtax on 2.04 million high-income Americans — about half of them small business owners. Americans would face European-style taxes, paying top rates that – combined with local and state taxes – exceed those of economic competitors such as Germany and Japan. Taxpayers in Italy, Spain, and even France pay lower rates. And that’s not all: President Obama would have the power to increase the surtax.

    Go here for the chart with all 50 states.

    “The large tax increases proposed by House Ways and Means Chairman Charlie Rangel would harm over a million small businesses, making them less likely to expand and hire new workers,” Heritage senior policy analyst Rea S. Hederman Jr. writes. “Congress should not pass large tax increases on businesses that would hinder employment.”

    Hederman, who compiled the chart as assistant director of Heritage’s Center for Data Analysis, adds:

    The surtax, when combined with the expiration of President Bush’s tax cuts and various state and local taxes, lifts the marginal rates on small business to over 50 percent in most states. This is an increase of 10 percentage points in the marginal tax rate, and over a 28 percent increase in the top marginal tax rate. The top tax rate is higher than almost all other industrial nations.”

    Posted in Economics [slideshow_deploy]

    13 Responses to Chart: How 5.4% Surtax Hits Small Business, State by State

    1. April, Colorado says:

      Small businesses are already paying higher and higher insurance rates as the premiums rise each year. Something has to be done to lower the price of healthcare and bring down those ever increasing insurance premiums. My insurance premium went up yet again. I know that I pay for those who do not have insurance and end up in the emergency room. I would love to see a chart of how small businesses will be affected if nothing is done. Let's get as many people covered as possible. Let's get as many people paying in as possible. Let's not allow the big insurance corporations to hold Americans hostage to ever-increasing premiums.

      If you don't like the President's plan, then let's hear your plan. The status quo just isn't working. We have to come up with some kind of solution. Not taking any action is NOT a solution.

    2. J.C. Hughes, Texas says:

      Such insanity is counterproductive. Don't tell me the majority congressional Demagogues aren't socialists. They're the worst kind. They hide behind capitalist promoting sweet lies. And they'll continue as long as they have a supportive audience. Choosing their replacements is long overdue. Hurry up 2010!

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    4. mlgreen8753 says:

      I've been hearing a lot about this. Small businesses are just going to have to do what they always do…take the hit and find an intelligent way to adapt to these changes. Cut expenses in offline advertising and go online to sites like Adwido.

    5. www.SBABG.org, Arizo says:

      Hi April,

      I'm glad you asked. If you werelistening to the President, you'd think there weren't any other proposals. of course, you'd be listening to a lie, but he's good at that isn't he now.

      A better plan has been proposed called The Patient's Choice Act.



      Of course, the president likes to ignore it, as do his Big Government cronies in congress, they much prefer to spin their lie as they as the acting do-gooders and everyone else as lazy folks who sit around and do nothing.

      Write your rep and ask her or him to explain his/her stance on The Patient's Choice Act.


    6. www.SBABG.org, Arizo says:


      YOu could also check out another plan, the Health Care Freedom Plan proposed by Jim Demint. It's far better than the Obama Plan.


      Again, why haven't you heard about these?

      The Media? The President's lying about it? Failure to look into the issue?


    7. Daryl from Manheim, says:

      Curing what ails the health care system will never be accomplished by the government, nor will it be accomplished by insurance companies. Costs will continue to skyrocket no matter what either entity tries to accomplish. The only way to reign in health care cost is to ELIMINATE ALL THIRD PARTY PAYMENTS. Only when people have to foot the bill themselves will they get off their large calorie-induced lard asses and get back to exercising away MOST physical ailments. Dishwashers, remote controls, air-conditioning, home theaters, and all the other modern conveniences have turn this country into a weak, wimpy, crybaby nation that expects government to take care of all their frustrations of life. 95% of this countries citizens would rather be under socialist rule than physically fight for freedom and independence. I'm sorry Mr. Jefferson, we failed you and your American Revolutionists.

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    9. PhilMB from Broomall says:

      I agree with Daryl – nothing done to either the current system or through ObamaCare will resolve the problems. Things that would 'fix' most of the problems will never get passed: Tort Reform – where the "Officers of the Court" are penalized heavily for bogus suits they bring where it is cheaper to settle than litigate; Elimination of Health Maintenance coverage from what should be Catastrophic Health Insurance; and Recognition that not everyone reacts the same way to a medication or medical procedure – Medicine an art, not a cast-in-stone formula. ObamaCare is a jack-hammer to the foundation of our society, let's shut it down, permanently.

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    11. jeffrey wolk, moraga says:

      I am confused. Let us say that I have incorporated my business and I have $1,000,000 in sales, $600,000 in expenses which includes a salary to me of $200,000 and $400,000 in net income. How would my business be taxed? Would my business be taxed at the $1,000,000 level or the $400,000 level? or something else? Thanks

    12. William, Dallas says:


      Assuming this is a pass-through entity (S-corp or Partnership or LLC), the surtax would be on your taxable income, which would be $600,000 (400,000 profit from business and $200,000 in wages.) Of course, your taxable income would be after itemized deductions.

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