There is a new meme surfacing with the "only 3% of small businesses"

who will be affected by removing tax breaks for those making $250,000 or more.

"Those 3% are exactly the ones who are creating the most jobs."

I never heard that one before but it has now been floated. It was not backed up with any kind of proof, just thrown out there, on MSNBC. I only heard it once, but I thought at the time it's gotta be the new rebuttal by the pukes against letting the tax cuts on the rich expire...

Has anyone come across this argument?

Teabagger argument fail.

We have NO unemployment because of those tax breaks.

There's another lie they can float.

It is so patently clear that what they are saying just flies in the face of reality. That's why I don't get that 3% argument.

But the RWingers just nodded their heads "That's right!" when I heard it said (I think it was that idiot Maria Bartiroma...why do they keep having her on MSNBC shows?).

:think:

and the wealthy can CHOOSE whether or not to invest their untaxed profits into more jobs OR they can send it to off-shore accounts, invest in businesses that lay off workers, or buy products that have little impact on our economy like a bigger pre-owned mansion, an Italian sports car, etc.

If we capture some of that income through taxes, we at least know a portion of it will go to rebuilding our economy.

I read that here from the NY Times or WSJ. It seems fairly plausible since the richest 3% of small businesses would be fairly large, especially compared to other small businesses like my own that only employed one - myself.

But considering that is only 27% of the 20% or so of people who work for small businesses. The rest of us work for big businesses or government.

That 20% number is a guess. I looked it up once for an LTTE, but don't have the real stats handy, but this business of "all the jobs come from small businesses" is a load of crap.

of jobs.
Here is a link to my numbers <http://www.sba.gov/advo/stats/sbfaq.pdf>

Fewer than 500 employees
•
• •
• •
•
Represent 99.7 percent of all employer firms.
Employ just over half of all private sector employees.
Pay 44 percent of total U.S. private payroll.
generated 64 percent of net new jobs over the past 15 years

figure debunked in reply #13 below is correct. Mitch McConnell tied the two figures together in the quote below.

Since the '50 percent' is far off the mark, so is your '27 percent'.

From http://today.msnbc.msn.com/id/38593250/ns/msnbc_tv-the_ed_show/

"Thursday, August 5th - msnbc tv - The Ed Show

SCHULTZ:Here is Republican Leader in the Senate Mitch McConnell, his comment on these tax cuts.

(BEGIN VIDEO CLIP) SEN. MITCH MCCONNELL, MINORITY LEADER: They propose to raise taxes on the top two brackets, and we'll probably have that debate in September, which would capture 50 percent of small business income and up to 25 percent of the workforce.

It will have a devastating impact by raising taxes in the middle of a recession The impact of all of this taxation regulation and yes, increased litigation as well, has a deterrent effect on what we would all like to do, which is to create more jobs. (END VIDEO CLIP)"

First, I do not consider a company with 497 employees to be particularly 'small.' Sure, they are not ginormous like wal-mart, but they also are not really 'mom and pop' and are not small in the sense that my one person store was small.

Second, you may note how they divide the statistics "just over half of all private sector employees". Private sector. Thus, excluding the millions of teachers, cops, garbagemen, postal workers, soldiers, dog catchers, snow plow drivers and street repair, etc., etc. who work for local, city, county, state and federal government - 16% of the labor force. Or more if DOD is included.

Third, I would wager that there are some small businesses getting a fair amount of their revenue from government. For example, the city hall and county courthouse are cleaned by a janitorial service company. Do those people really work for a small business, or do they work for the government? Except the government job has been privatized in order to save money by creating a lower wage, worse benefits job.

Fourth, "net" new jobs over the last 15 years. Well, there haven't been any created between 2000 at 131,765,000 and 2009 at 130,920,000. So, let me look at 1992 to 2007. ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb1.txt
1992 - 108,726,000 (20,307.000 government)
2007 - 137,598,000 (22,218,000 government)

28,872,000 new jobs
compared to 108,726,000 old jobs. (almost 4 times as many)

I would claim that the old jobs are more important than the new jobs. Many people, when they get a job, they get one of the old jobs. Old jobs can open up because people quit, or move, or die, or get fired, or get promoted, or retire. Attrition in one of the old jobs is just as inmportant to a job seeker as a new job is.

Mainly though, I would dispute a definition that calls a company with over 100 employees as "small".

Millionaires and billionaires included. The number of small businesses making that kind of money would be very small and it is debatable whether or they are "small businesses". But certainly not the entire 3% are small business owners.

I think I get what you are getting at, but in my thinking it has to be on an income scale, not a scale of how many people are employed. Am I wrong here?

I misinterpreted. This is 3% of the small business owners - not 3% of those making more than $250K?

$250k per year, then only 3% is affected by the reinstatement. That's the formulation...as you put it, it works out to be about the same, but that's the way it is presented...in terms of the small business owner...I know, I know, what's the definition of "small business owner", right?

I think I get what you are getting at, but in my thinking it has to be on an income scale, not a scale of how many people are employed. Am I wrong here?

They had that tax break for years and we were hemorrhaging jobs during that period. They didn't use it for the purpose of creating jobs in the US, so they should lose it.

How can their statement be taken seriously?

There was NO back up info on it given...no little factoids to back up their claim, it just was out there, PLOP...

than the one being put out by the White House with 97% and 3%, etc. People want matters simplified for them. Why did these taxcuts not create jobs for George W Bush? Why did he lose 700,000 jobs in his last month in office with those taxcuts in place?

If they didn't work before, why should we think they would work now? Insanity is doing the same thing over and over and expecting different results. Therefore, the Republican Party is insane.

A very small number of people make more than $250,000 per year. Many of these persons also have "small businesses" that generate a portion of their income, but the two are typically not directly related.

For example:

A surgeon who is employed by a private practice group who makes six (or seven) figures per year. That same surgeon also works on the side making appearances at medical conferences, presenting on behalf of one or more pharmaceutical companies about the wonders of their latest drug. Many white collar professionals do consulting work on the side in their area of expertise. Full Disclosure: I am one of them.

All of these persons (should) report this income on Schedule C of their federal income tax return and so they are technically small business owners. But I don't have any employees and have no intention (or means) to hire somebody, and that's the case with the overwhelming majority of these businesses.

They're businesses on paper only, but they don't have any employees and are really effected by changes in the tax laws.

of all small business INCOME." What IMO they want voters to HEAR is that Obama is raising taxes on 50 percent of small businesses. But even what they actually say is a lie, of course.

First, Obama is not raising taxes: Republicans raised taxes in advance years ago. Second, as Goolsbee pointed out today on TV, much of the "small business income" involved is not really "small business income." Rather, it is PROFESSIONAL earnings for a person with NO employees, reported through tax loopholes by sole proprietors--doctors, lawyers, consultants--particularly on Schedule C.

Third, the maximum the percentage of true small businesses that make more than $250,000 in personal income could be is something less than two percent.

That is mainly because business income reported as personal earnings from partnerships and S corporations mostly accrues to millionaires, not what the average person would regard as small business owners. See https://www.truthout.org/mcconnell-repeats-debunked-lies-to-promote-more-tax-cuts-for-multi-millionaires62606 and click through to some of the excellent links provided there, particularly http://taxvox.taxpolicycenter.org/blog/_archives/2010/8/13/4603774.html

some of my conservative colleagues...but I know it will be a tough sell for my accountant. He has a secretary and a part time junior level accountant (full time during tax season) and he would argue with me...I'll just bet he'll say something like "I can't provide health care or higher wages for these employees if I am taxed more..." What do I say to him?