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In a blog post on this site yesterday, we noted that if Congressman Boehner really wants to end the stimulus, then he really wants thousands of Ohioans to lose their jobs.
In response, the Congressman was quoted as saying that our administration owed his constituents “…an explanation of how raising taxes on small businesses will do anything but further hinder job creation in Ohio and across the country.”
Again, Congressman Boehner is confused. So we thought we’d take him up on the invitation to explain to the people of Ohio who has been fighting for small businesses here in Washington and who’s been obstructing that fight.
President Obama has consistently worked with anyone who would join him to help small businesses lead this economy back to health. But in virtually every case, House Republicans led by Rep. Boehner have opposed our attempts, while Republican Leaders in the Senate have used procedural gimmicks to keep them from even coming up for a vote.
Most recently, and most egregiously, House Republicans voted against the Small Business Jobs and Credit Act of 2010 (the Democratic majority passed the bill, only to have the vote blocked by Senate Republicans). This bipartisan bill would have reduced taxes on small business by zeroing out capital gains taxes on their investments, “bonus” depreciation, and immediate expensing of equipment purchases (all three of these significantly lower their investment costs). The bill would also create a fund for small, community banks to lend to small businesses.
So here’s a bill that helps small businesses and small banks, strongly supported by the White House (and, for that matter, small business advocacy groups like the Chamber and NFIB), yet Rep. Boehner’s team opposed it.
Unfortunately, that’s not a new position for them. They tried to block the HIRE Act (a tax cut for businesses that hire the long-term unemployed), Recovery Act loan guarantees and fee forgiveness supporting around $30 billion of small business lending, and let’s not forget their opposition to a $40 billion tax credit for small businesses that provide health care to their workers.
What, then, was Rep. Boehner talking about in that quote? He and his team want to extend the Bush tax cuts for the wealthiest households, and they’re trying to do so under the guise of helping small business.
Again, the facts of the case point exactly the other way. Virtually every small business would benefit from President Obama’s plan to preserve the tax cuts for families with incomes below $250,000. Only three percent of filers report small business income above that level, and they’re mostly high-end professionals like someone with a small legal practice—perfectly worthy business folks, of course, but not the small entrepreneurs we’re trying to reach with the plans the Republicans continue to block.
Check out this graphic to see for yourself who benefits from the tax cut Rep. Boehner is advocating. Compared to what the President wants to do, it delivers less to the middle class, and, at the expense of adding billions to the deficit, massively delivers to millionaires.
So, collecting his positions over the past couple of days, Rep. Boehner wants to: a) end the Recovery Act that has put more than 100,000 Ohioans to work, b) add $37 billion to the deficit by cutting taxes of the wealthiest households, and c) block tax cuts and new lines of credit to middle-class, small businesses.
It all sounds kind of familiar, doesn’t it? That’s because it’s precisely the policy prescription that got us into this mess. And it’s the last place we want to go back to.
Jared Bernstein is Chief Economic Advisor to the Vice President