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Howard Gleckman’s August 4 TaxVox post on tax increases and small business reminds me of the debate over the
Hilzenrath went on to cite then Senate Minority leader Robert Dole (R-Kan), who claimed that “half the tax increase because of the rate increases is going to be paid by small business and they’re not rich.” And, added, Senator Conrad Burns (R-Mont), “the bill takes away any incentive that small businesses have to create their jobs or even give an excuse to expand.”
In a similar vein, David Wessel and Jeanne Saddler reported in the July 20, 1993 Wall Street Journal that “a Washington group headed by James Miller, President Reagan’s former budget director … is running ads … that label the tax bill a ‘job tax” that ‘crushes small business’.”
If the charges by opponents of the tax increase sound familiar, so do the Clinton Administration’s then responses. Hilzenrath reported Assistant Treasury Secretary for Tax Policy Leslie Samuels (who supplied me with the articles I cite) as responding "What the Republicans are saying is what they've always said: Don't tax wealthy people."
Wessel and Saddler noted that “the Treasury doesn’t dispute the fact that well-off small-business owners will pay higher income taxes, just as will well-off bankers, orthodontists, and Exxon Corp executives.” But “only 4 percent of those taxpayers who report some business income on their tax returns – and that includes partners in law firms and investment banks as well as owners of small manufacturing companies – make sufficient money to be hit by the higher tax rates.” (The current figure that Howard cites from TPC data is 2.5 percent.)
What followed is well known to everyone. Congress narrowly enacted the
We can debate endlessly whether the
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