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cadenas -> RE: GOP Uses Creative Stats To Push Bush Tax Cuts (VIDEO) (8/6/2010 9:51:29 AM)
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quote:
ORIGINAL: willbeurdaddy
Actually the problem is in the thinkprogress analysis, and they are the ones using misleading statistics. Here are the main two claims in the article:
"Less than two percent of the small businesses in the country make enough money to file in either of the top two tax brackets McConnell mentions. But that hasn't stopped House Minority Leader John Boehner (R-OH) from piling on."
This is true, but meaningless. "Small businesses" includes 10s of thousands of people who make part time income from things like Amway, Ebay and other spending money sources. and file Schedule C so they can write off expenses. So the percentage of Schedule C filers in the top two brackets is small. The real issue is how much INCOME is being drained from the private economy, and that is exactly what McConnell was talking about and the study shows....50% of small business income is in the top two tax brackets, as they tacitly agree in their next sentence, but then throw in more bs.
First of all, politicians seem to usually define "small business" as businesses up to 500 (!) employees, and that is probably the case here, too. The Congressional Committee report linked in that article seems to define "small business" as "a business making less than $50 million".
Secondly, the 50% number really is misleading. The report actually gives additional information:
The top two tax brackets are about 750,000 taxpapers, or 3%. Total business income is $1 trillion.
That means:
- 24.25 million are in the lower tax brackets.
- The high earners make an average of $667k
- Those in the regular tax brackets make an average of $20k. That's a far cry from the Amway spending money.
quote:
ORIGINAL: willbeurdaddy
Who are these small businesses that are in the top two rates? Primarily doctors, lawyers and consulting specialists in various fields. The group that probably re-invests the largest percentage of their net income back into the economy. Plus they employ large numbers of support staff, on average 2-3 employees or outside vendors per individual.
Professionals (such as doctors, lawyers, consultants) generally don't need a large support staff (with the exception of doctors, who need a huge support staff to deal with the health insurance industry bureaucracy).
Also, high-income earners generally spend LESS of their incomes. The key to reviving the economy is to get money into the hands of those people who will actually spend it.
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