The Tax Con Continues

President Obama’s budget chief, Peter Orszag is one of several Administration officials cruising the media to hype ObamaCare.  He appeared on Fox News Sunday where interviewer Chris Wallace asked about the Democrats’ proposed five percent surtax on incomes above $1 Million.

WALLACE: Let’s talk about taxes. The House would…help pay for its health care program by imposing a surtax on top earners. As a result, combined with other Obama tax policy and local taxes, 39 of the 50 states would have tax rates over 50 percent…

ORSZAG: Well, first, look. You were — you were adding in state and local taxes in those calculations.

WALLACE: Well, that’s what people are going to have to pay.

ORSZAG: Secondly, that affects a very small percentage of the population, 1 or 2 percent. But let’s talk about the bill itself…

WALLACE: All right. You say it would only hit a small number of people. In fact, according to studies, two-thirds of small business profits would be hit by those taxes…Mr. Orszag, wouldn’t raising taxes that much on small business profits be a job killer?

ORSZAG: No, and I — I don’t know where you got your two-thirds number from. The vast majority of small businesses would not be… affected.

Here, Orszag was trying to get away with the same deception the Administration and the Democrats have been chanting for a week, that a tax on small business profits doesn’t matter because “the vast majority” would not be affected.  Wallace brought him back to reality:

WALLACE: It’s not two-thirds of businesses. It’s two-thirds of profits.

ORSZAG: I understand. And again, what we are trying to do here is a fiscally responsible health reform. I’ve actually run a small business. I’d be happy to — to speak to folks about this. The most important thing…

WALLACE: Would you be happy to pay 57 percent?

ORSZAG: No, look. The most important thing for small businesses is getting the economy back on its feet. That — the key driver of small business activity is demand for their product, and that is what we are trying to do, getting the economy back on its feet. That’s far more important than other factors.

Orsazag was forced to dance away from the question because Wallace wouldn’t let him toss out deceptive statistics, unchallenged.

As we reported last week it’s true that only one or two percent of taxpayers with small business income rise to the Million dollar bracket.  That’s because the taxpayer category “small business” includes tens millions of people involved in one person and part time business activities.  But also true is:

• 74% of all taxpayers reporting over $1 million in income were small business owners.

• There were 264,000 small businesses in this income bracket. (2006 – latest figures available from IRS)

• These are the small businesses that have always provided most of the new jobs in America.

This year, employers have shed 3.4 million jobs.  What if instead of expanding government and constantly threatening small business employers with tax increases, Obama had granted those employers tax relief to enable them to hire more people?   If each of the Million dollar small businesses had hired just two people per month there would have been no job losses this year.