One of the worst distortions yet of the proposal to cancel the Bush tax cuts on families making $250,000 or more - from the Delaware senate debate last night.
Now we know the source of Christine O'Donnell's financial troubles. Unlike the typical struggling family, she lacks a basic understanding of accounting concepts such as 'gross and net'.
Here's a quote from last night's debate:
You have said that you will stop the tax cuts for the so- called rich. What you fail to realize is the so-called rich are the small business owner, the dry-cleaner down the street, the pizza shop owner who makes $300,000 before they pay their four employees, before they feed their own family..
No business is taxed on income before they pay their employees. The taxable income of a family pizza shop is gross revenues minus rent, utilities, supplies, taxes paid, maintenance, depreciation, transportation, and labor costs. Overall profit margins for restaurants are around 10% of sales, so to lose the Bush tax break, your little mom and pop pizza place would have to do $2.5 million in sales. And to think we would tax these businesses before they feed their families!