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GOP Myth on Tax Cuts and Small Businesses

This morning, House Republican Leader John Boehner appeared on ABC’s “Good Morning America,” peddling a discredited Republican talking point about the impact of extending the Bush tax cuts for the wealthy on America’s small businesses.

The facts are clear:

At least 97 percent of small businesses would not pay a penny more due to letting these upper-income tax rates expire for the wealthiest 2 percent of Americans.

In early August, the nonpartisan Pulitzer Prize-winning PolitiFact evaluated the accuracy of the Republican claim that allowing tax cuts for the wealthiest Americans to expire would hurt the majority of America’s small businesses.  PolitiFact labeled this GOP claim a “pants on fire” falsehood.  As PolitiFact concluded:

Two independent studies that looked at the impact of the Democratic proposal on small businesses found that only between 2 to 3 percent of tax filers who report having what can be thought of as small business income will be affected.

And even these analyses overstate the impact on small businesses.  Included in that small percentage of “small businesses” affected (2-3 percent) is anyone who receives any type of partnership or business income – and many of them are not what you would consider “small business owners.”  They include hedge fund managers, private equity fund managers, owners of privately held multinational companies, lobbyists, and partners in major law firms.

As President Obama said in a speech this afternoon in Ohio:

…[Republicans] should not hold middle class tax cuts hostage any longer…And for those who claim that this is bad for growth and bad for small businesses, let me remind you that with those tax rates in place, this country created 22 million jobs, raised incomes, and had the largest surplus in history… In fact, if the Republican leadership in Congress really wants to help small businesses, they’ll stop using legislative maneuvers to block an up-or-down vote on a small business jobs bill that’s before the Senate right now…

Instead of working to help American small businesses, Republicans have voted against:

Small business lending to leverage $300 billion in private bank loans for small businesses so they can grow and hire

Seven out of the eight small businesses tax cuts that have been enacted into law – including doubling write-offs for investment in new equipment, a payroll tax holiday for hiring workers, and tax credits to help them offer health care coverage

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