Last night on the national news of one of the Big Three (CBS, NBC, ABC) I watched a reporter contextualize for viewers the conflict over allowing 2000-era federal tax cuts to sunset (expire) for those earning over $250,000 a year. The over-$250,000 group is said to represent about 2 percent of American taxpayers. For the rest of us, the holiday would continue.
In order to be “fair and balanced” (I suppose), the perhaps-three-minute report focused on the negative impact on “small business,” and employment, if the 2 percent over $250,000 small businesses would lose their tax break in 2011. Two business owners were interviewed, and of course, said that they’d have to cut some jobs if they had to pay more taxes.
At the end of the segment, the reporter took pen to white board, and gave his interpretation of reality: as I recall the numbers, he said that 2 1/2% of small businesses are in the $250,000+ category. BUT this represents almost 900,000 small businesses.
Segment over, back to the news…Those poor business owners.
One might feel sympathy for these entrepreneur small business owners, and especially for the employees they say they’ll have to let go, but there is a “wait a minute” aspect to this – an aspect not touched (intentionally, I believe) by the news program.
What was not stated was that for 97 1/2 percent of American small businesses, apparently nearly 24,000,000 businesses, the overwhelming vast majority, would not, under the president’s plan, be faced with the possibility of going back to 2000-era tax rates. Only the 2 or so percent who are the wealthiest among us would have to wear the hair shirt of the additional tax, which means only going back to the rates prevailing at the time of the ill-advised tax cuts were made.
We should feel sorry for those over $250,000 folks for having to help the lessers among us recover from near catastrophe?
(I don’t think the break point of $250,000 is nearly low enough. But that’s for another conversation.)
I think back to my own work experience. I worked an entire career, and within my constellation of relatives and friends, I would probably be considered to have made a really good living.
In my working years, it would take several YEARS of earnings to equal $250,000. I never got close to reaching a six-figure annual income. Nonetheless, I lived well (by my standards).
The “tax holiday” between 2001 and the present was good for me. I have all my old tax records so can retrace all of those steps, and do an essentially “apples to apples” comparison. Federal tax went down; state tax stayed pretty constant; property tax went up, but not by a lot.
I had “more jingle in my pocket” those tax-holiday years, but I can’t really say that it did me any good at all. And when I compare it against the catastrophe it spawned in huge federal debt to pay for a war; and all of the credit card debt we all incurred living outside our means, it certainly wasn’t worth it.
I’m within the 98 percent of Americans who will indirectly benefit if the tax holiday is lifted for the top 2 percent.
Why, then, can the top 2 percent high-income folks count on the rest of us fighting their anti-tax battle for them, which is exactly what they are counting on?
Tables-turned, they’ve generally never been in the corner of the least among us.
It’s very simple: we have been taught to fight amongst ourselves, and to want what is unhealthy. To be rich is a positive value…
Have we learned anything? I’ll see how election day 2010 plays out.
If we choose to go back to the days of the 2000s that almost killed us, it’s our fault…and it will be our problem.