“Would raising taxes on the wealthiest Americans have a chilling effect on hiring in this country?” When asked this question by Today’s Matt Lauer, Warren Buffett confidently answered, “No.” How could this be, when the tax hikes desired by President Obama would fall directly on some of America’s most successful job creators?
As Kris Roglieri wrote in The Washington Post:
What policymakers fail to realize is that most small business owners, who also employ most of the country’s workforce, declare their business profits on the owner’s personal income tax return and are taxed at the personal income tax rate. Given that the net income number for many will be over $250,000, the proposed tax hikes could have a dramatic effect on small businesses and the growth and hiring decisions they will make. Another point policymakers overlook is that business owners will ultimately pass this cost on to the middle class by raising prices on goods and services, possibly triggering layoffs and stalling hiring.
Professor George Haynes of Montana State University analyzed small business employment based on the Federal Reserve Survey of Consumer Finances and found that those small businesses run by families earning more than $250,000 per year employ 93 percent of the people working in small businesses. Raising these businesses’ taxes means that they have fewer resources available to invest and create jobs.
Read More at heritage.org . By Romina Boccia.
Photo Credit: Geoff Livingston (Creative Commons)