Allison Kilkenny: Unreported

DeMint: The Richest 0.7 Percent of the Population is “Lots of People”

Posted in class divide, Economy, politics, wealth divide by allisonkilkenny on February 25, 2009

Matthew Yglesias

The right-wing is flinging smokescreen rhetoric about income taxes and small businesses so quickly that it’s difficult to keep track of what they’re saying. But the important things to recall are that very few people find themselves in the top two tax brackets, and that though some of these people are small businessmen they’re paying taxes on net income. These are brackets for a small number of unusually prosperous people. For example, here’s Jim Demint:

It looks like he’s gonna try to get a lot of that revenue from raising payroll taxes on upper income and that sounds good but basically that affects small businesses and their ability to hire people. So I just think it shows a lack of understanding of the private sector. A lot of people make — who are reporting a quarter million dollars — you know, I’ve done that before in my small business, and I was actually taking home like 50 or 40.

In fact, about 0.7 percent of households file in the top two brackets: 

taxes.png 

Meanwhile, I don’t know why DeMint thinks people who are only taking home $40k or $50k would be filing as people who earn $250,000. I think he wants people to think that the government is taxing gross business receipts, so that if I spend $230,000 on my business to earn $300,000 in revenue, that I’m taxed on all $300,000. But that’s not how it works at all. You deduct business expenses and pay taxes on your net income. Any small businessman who’s earning a middle class income isn’t paying in the top two brackets, just as any salaried employee who’s earning a middle class income isn’t paying in the top two brackets.

Watch the Demint video here.

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