Peter Morici Repeats Lie that Repealing Bush Tax Cuts Raises Taxes on Half of Small Business Income

[Amerigo Vespucci]

September 11, 2010 08:30 PM
Peter Morici Repeats Lie that Repealing Bush Tax Cuts Raises Taxes on Half of Small Business Income
By Heather

http://videocafe.crooksandliars.com/heather/peter-morici-repeats-lie-repealing-bush-ta

On CNN's Your Money, Maryland Business School Professor Peter Morici does the Republicans a favor and repeats their latest favorite talking point for them, that repealing the Bush tax cuts is going to raise taxes on half of small business income. I noticed this change in their rhetoric a while back after they were repeatedly called out for lying and saying that the repealing the tax cuts would affect half of all small businesses. Once enough charts started showing up proving that nonsense to be wrong, they've all shifted their talking points to this.

Think Progress' Wonk Room explained why Morici's talking points are bunk as well.

Kyl first offered two data points (unsourced, of course) to illustrate how crucial small businesses are to the economy. That’s fine, but it’s also entirely beside the point. Kyl offers no evidence that any of the businesses he referenced would be affected by the expiration of the Bush tax cuts at all, and chances are extremely high that they would not, as fewer than 2 percent of small businesses owners file in the top two income tax brackets.

Kyl then tries again by referencing this JCT report, which states that “half of all income reported by individuals in the top two brackets is business income.” But did you notice anything at all odd about that sentence? Did you notice that the word “business” is not preceded by the word “small?” Maybe it’s because the very next sentence from the very same JCT report that Kyl relies on says:

These figures for net positive business income do not imply that all of the income is from entities that might be considered ’small.’ For example, in 2005, 12,862 S corporations and 6,658 partnerships had receipts of more than $50 million.

So, what we are really talking about here is extremely wealthy people who claim millions and millions of dollars in income as “business income” and have no relationship at all to actual small businesses. In fact, that very same JCT report states that only 3 percent of taxpayers with any net positive business income at all will be affected by the expiration of the Bush tax cuts for the wealthy. The Post rightly dismissed Kyl’s argument as “tired” and “unsubstantiated,” because, as his reliance on cherry-picked data makes clear, that’s exactly what it is.

Look for more of this since I've seen so many of them repeat this nonsense over the last month or so it's ridiculous. I don't care what network or what show, if they're talking about repealing the tax cuts, some Republican hack is repeating this talking point without being challenged.

[Cirque du So-What]

1. Look around on DU

and you'll find that same lie repeated quite often. I've seen it here today, matter of fact. It was couched in terms of 'I don't know if it's a fact, but I've heard...blah, blah, hurt small business, blah...'

[Inuca]

2. Boehner may have "clarified" the issue

this morning on Face the Nation. He made the same claim, to which he was asked to explain why, if this is indeed the case, a major non-partisan tax-related organization (forgot which one) claims that it will only affect roughly 3% of small businesses. He answered that it may be only 3% of businesses, but it is 50% of revenue. In other words, assuming that what he said is correct, it means that these businesses are not that small after all, at least in term of their revenue, so they can very well afford to pay more. Bohener's most endearing quality is that he is not that smart.

By the way, to anyone else watching this, is it just me, or was he significantly less orange than usual?

Incidentaly, Golsbee also commented on this this morning, his point was that many of these so called small businesses that would be affected are lobbyists, lawyer firms, and the like, small companies in terms of number of employees but that rake in the big bucks.