In the recently convened “lame-duck” session of Congress, senators and representatives will take on a number of issues that could have major consequences for working families and retirees. Congress is considering benefit cuts for Social Security, Medicaid and Medicare and members are looking at cutting taxes for the wealthy even further. Any deal that Congress makes, though, should be based on facts and not the myths that have sprung up around taxes, the deficit and the earned benefit programs. Here are a few of the key myths and the truth behind them.
Myth: Extending the Bush tax cuts for the wealthiest two percent is important because the economy is weak.
Economists agree that cutting taxes on the wealthy is one of the least effective ways to stimulate the economy. A much better use of the $1 trillion cost of those tax cuts would be to invest in infrastructure or extend unemployment benefits.
The Center on Budget and Policy Priorities (CBPP) released a report that shows only 2.5 percent of small business owners would be affected by allowing the Bush tax cuts to expire on the wealthiest taxpayers (top two marginal tax rates).
“The claims that allowing the Bush tax cuts for high-income people to expire would seriously harm small businesses rest on an exceedingly broad, and misleading, definition of ‘small business.’ The definition is so broad, in fact, that under it, both President Obama and Governor Romney would count as small business owners—as would 237 of the nation’s 400 wealthiest people.”
Did you catch that? The definition is so broad 237 of the nation’s 400 wealthiest people are considered small business owners.