By Jessica Chau
In today’s news highlights, we hear from a small business owner who supports ending the Bush tax cuts for the richest 2%, we feature a new study that concludes that tax cuts do not stimulate economic growth, and a piece about the reality of passing tax reform.
The Stillwater [Minn.] Gazette, Lynn Schurman, 9/12/2012
I’m a real small business owner. And let me be clear: I fully support ending the extra Bush tax cuts for the richest 2 percent. What about the politicians who say they’re defending small business job creators by voting against ending these extra breaks? They don’t speak for me. They’re just using small business as a pawn to protect special tax cuts for the wealthiest Americans.
The fact is, only about 1 out of 40 actual small business owners will see any change in their taxes if special cuts for annual income over $250,000 end on schedule at the close of this year. That’s because only 2.5 percent of small business owners take home more than a quarter million dollars a year, according to the U.S. Treasury Department.
When lobbyists and politicians claim a higher percentage, you should know that the definition of “small business” they like to use counts hedge fund managers, corporate lawyers and real estate partnerships. It counts celebrities and authors, including President Obama (for his book royalties) and Mitt Romney (for his speaking fees). And it counts at least six of the top 10 lobbying firms in the country. Like I said, half-baked.
Think Progress, Travis Waldron, 9/12/2012
Congressional Republicans and their party’s presidential nominee have both pushed plans to cut taxes on the wealthiest Americans in hopes that such a move would stimulate the economy and aid the recovery from the Great Recession. A new study, however, indicates that tax cuts for the wealthiest earners fail to generate economic growth at the same pace as tax cuts aimed at low- and middle-income earners.
The study, conducted by Owen M. Zidar, a former staff economist on President Obama’s Council of Economic Advisers and a graduate student at California-Berkeley, examined economic growth in the states with the most high-income earners. Zidar reasoned that “states with a large share of high income taxpayers should grow faster following a tax cut for high income earners” if the tax cuts had the economic effect conservatives claim.
Forbes, Alex Brill, 9/12/2012
Whether Governor Romney has the opportunity to pursue tax reform as president or President Obama is given another chance, either will confront powerful interests intent on protecting their tax preferences as well as the difficult task of determining which preferences should remain and which should be curtailed or repealed.