Last evening, Senate Republicans led the charge to defeat a Democratic scheme to raise taxes on small business job creators. But that isn’t stopping the Democrats who run the Senate from continuing to push for permanently higher taxes on job creators.
To the surprise of no one, today’s New York Times reports that Democrats are putting politics before governing:
“After struggling all year for an economic message that resonates broadly with Americans in hard times, President Obama and Congressional Democrats have settled on one they believe can carry through next year’s election as they use a fight over payroll taxes to portray Republicans as defenders of the wealthy at the expense of the middle class....
“But politically, Democrats believe that they have already won this latest skirmish in the message wars....So they have reprised an old message — that Democrats fight for the middle class, Republicans for the rich — and are likely to sound it through 2012, in hopes of blunting the headwinds they face as unemployment remains high.”
Of course, Democrats won’t let facts stand in the way of their partisan ploy. Today’s Wall Street Journal editorial unmasks the real victims of the Democrats’ tax hike scheme – small business job creators:
“Mr. Reid's surcharge—which would hit incomes of $1 million and above—would slam small business job creators. Congress's Joint Committee on Taxation estimates that taxpayers will declare about $1.2 trillion of business income in 2013….Joint Tax finds that 34% of that $1.2 trillion is on tax returns with ‘modified AGI [adjusted gross income] in excess of $1 million.’ This means about $400 billion of business income would be subject to Mr. Reid's profits surtax.
“Mr. Obama's own Treasury Department examined 2007 IRS data and found 392,000 returns with incomes above $1 million. Some 311,00, or more than three out of four, were classified by Treasury as ‘business owners.’ Perhaps Democrats can explain how taking money from employers is going to lead them to hire more workers.
“By the way, Mr. Reid's surcharge comes on top of the tax increase that will hit when the Bush tax rates expire at the end of 2012. So if Mr. Reid has his way, the top income tax rate will climb to 44.5% in 2013. And because dividend income will again be taxed as ordinary income starting in 2013, the dividend tax goes to 44.5% from 15% today. And don't forget that the ObamaCare investment income tax surcharge of 3.8% also begins in 2013, so stock owners are going to be happy to hear that the new dividend tax rate could be 48% in the name of tax fairness. This will only deter business investment, which is critical to job creation and higher wages.”
Speaker Boehner has said that House Republicans are willing to work with the President and Washington Democrats to pass an extension of the payroll tax cut in a fiscally responsible way. Washington Democrats should abandon their demand to impose a job-crushing tax hike on small businesses and work with Republicans to extend the payroll tax cut and unemployment insurance temporarily.
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