The Obama Tax Hike and Lessons from 1937
Guinevere Nell /
Raising taxes on successful businesses is one thing we cannot afford to do. Large, successful businesses that create jobs would be hit the hardest, but small businesses would also be hurt by such a tax increase. Although economists disagree on many aspects of economic growth and recession, there is near-unanimity on at least one issue: raising taxes during a recession is a bad idea. It seems clear then, that a jobs-killing tax increase, such as the one planned by President Obama, is a bad idea.
Of course, Obama has argued that repealing the Bush tax cuts would not cause job loss. Because small business owners often earn a portion of their income from other sources, some commentators have argued that they are not real businesses and therefore a tax increase would not cause job losses. This is simply not true: many of these businesses have employees. The businesses most likely to have employees are the most successful ones, and therefore would face very large tax increases; but a significant portion of small businesses at every income level report having paid employees. (more…)