Lindsay Graham today (via Crooks and Liars) –
It would be stupid in an economy this weak to raise tax rates on a million small businesses at a time they can't hire people now."
Which is the boilerplate Republican rationalization for extending the Bush tax cuts to everyone, including the very wealthy, (even though the very wealthy do not tend to spend the money saved from tax cuts, they hang on to it, hence no stimulus effect, but I digress . . )
Setting aside for a minute Republicans’ insane and/or completely dishonest notions of what constitutes a 'small business' how about trying to put to rest the 'taxing the job creators' fallacy as simply as possible (which also conveniently happens to be the only way I know how).
To the extent that a small business, or any business for that matter is a “job creator” it is not taxed at all.
Example:
Take 2 businesses, each of which let’s say is on its way to making a handsome profit of exactly one million dollars during its current fiscal year.
Business A decides to hang onto the entire million as it come in and do nothing with it – stick it in the bank and earn interest – not attempt to create a single job (maybe they’re trying to wait it out till after the next election to help cripple President Obama’s job numbers, or am I being too cynical?). They will be taxed at the appropriate rate on the entire million.
Business B on the other hand spends the entire one million employing new workers to expand their business. Now, how much will this outfit, the true job creator, be taxed? That’s right, zero. Every penny spent on creating jobs is a business expense to be subtracted from profit before taxes.
To the extent that businesses, small or large, really are “job creators”, they are not taxed a dime.
