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  • Millionaire Tax Would Punish the Biggest Job Creators

    Senate Majority leader Harry Reid (D–NV) drifted off to fairy-tale world this week and dreamed up some statistics as he did. On the floor of the Senate, Reid said the following:

    Many of our job creators are like unicorns—they’re impossible to find and don’t exist. That’s because only a tiny fraction of people making more than a million dollars, probably less than one percent, are actually small business owners and only a tiny fraction of that tiny fraction is a traditional job creator.

    This claim is wildly off base.

    Senator Reid’s statistical confusion on small businesses and job creation could be understandable. The statistics were once notoriously difficult to find, because there was no objective definition of small business. But the Treasury Department rectified this with a recent study. It contains firm data that refute Reid’s unsubstantiated and implausible claim.

    According to the new Treasury report, 50 percent of the income earned by businesses that pay their taxes through the individual income tax code and employ workers would be subject to the millionaire tax that Senator Reid demands to “pay for” an extension of the payroll tax holiday (see table 15 of the report).

    Some “unicorn.” Half of all small-business income is a lot higher than 1 percent, Senator!

    The new data make clear that Reid’s millionaire tax is a direct blow to the pass-through businesses that employ the most workers. The tax would deprive these important job creators of resources they could use to add new workers or pay their current workers higher wages. And it would reduce their incentive for taking on new risk and expanding their businesses in the future. This would further reduce the number of new workers they could have hired.

    The unemployment rate is still at unacceptable levels, and there appears little hope of it falling to more acceptable levels anytime soon. The last thing those searching for work can afford is an unnecessary tax hike, driven by a divisive desire to instigate class warfare, which would punish the businesses they need to put them back to work. It is time to get the facts straight and stop this unhealthy obsession with raising taxes.

     

    Posted in Economics [slideshow_deploy]

    6 Responses to Millionaire Tax Would Punish the Biggest Job Creators

    1. John says:

      But your claim is not clear: The same table shows that firms with 1M+ could be 50% of total AGI (your claim) or 19% of total AGI (if a small business) or 5% (of total returns) or 3% (of total small business returns). No report that I know addresses the causal question of the effect of a tax increase on hiring.

    2. bdlars says:

      Actually it might be best to describe the job creators as a "vulnerable species" and as by definition are "likely to become Endangered unless the circumstances threatening its survival and reproduction improve."

      STOP POACHING THE JOB CREATORS!

    3. Bobbie says:

      It''s a democratic ploy. Once they open this can of worms, the arm of government grows longer and stronger. American socialism is what it becomes… The ignorant rich (hollywood) and those directly behind this hostile ignorance, michael moore, george soros etc. that are on the side of government tells me they have no sincerity in their desire to help through charitable contributions of their own which would benefit any cause far more then government allocating money wherever they want, shows the rich and famous working with the American government to change this country from freedom (how the rich came to be,) to anything or everything but. The rich need to be taxed through mandate by government in order to help? People should be inspired by the rich, not government! We're AMERICANS!

    4. antisophist says:

      Your analysis is terribly flawed and/or misleading.

      First, Sen Reid's claim was regarding the number of small business tax filers who would be affected by a millionaire tax. You rejected his claim using a statistic for total income. This is a classic apple and orange argument.

      Second, looking at that same table you reference, the number of small business filers with an adjusted gross income above $1 million is, indeed 1%.

      Third, going to the crux of the argument, i.e. that increasing tax rates on the rich by 3% will cause a large effect on their business decision-making, does not pass the straight face test.

      As an independent, I wonder whether this is just sloppy analysis, or purposeful propoganda

    5. Chani says:

      The reality is that consumers are the job creators, not those who don't pay fairer taxes. As we are seeing with fewer consumers there are fewer jobs.

    6. Mattm says:

      antisophist,
      I don't know if your right about the analysis, but is it moral or is it simply right for Mr Reid to suggest that someone deserves having their own money taken away to give it to someone else. Is that Mr Reid's idea of charity? Seems to me we are electing senators and congress folk to tell us how they will spend our money. That can't be their purpose for Pete's sake, it should be to get government out of the way. The problem with people who think the government can fix all our problems is that "it" never has solved a problem. It has covered them up and hidden under a blanket of a necessary "safety net" theory.

      All we have done is paid people to be poor and make a bunch of other people feel better about it. Now we can't talk about it because it is unkind. Truth is when you remove unfairness and struggle from peoples lives, you disable them.

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