Wow, Geithner is spinning hard. 3% of businesses. Most businesses are on paper or are 1-2 man operations. Small businesses used to do almost 80% of the hiring in this country, now it is only 64%. The tax he wants will affect most businesses who actually hire. That is the point he is so desperate to avoid. Congressman Ellmers almost put him away and the following two questions in red text would be the key followups that would have finished him, “Mr. Geithner, how much of that 3% of small businesses you want to tax actually employ five or more people?”
At the same time the Obama Administration is fine with his friends at Google paying 2.4% on $3.1 billion in profits. General Electric, which was ran by Obama’s friend GE CEO Jeffery Immelt who just took a job at the White House, paid no tax on $14.2 billion in income and actually got government subsidies. GE also owned MSNBC until just recently, but I am sure that is just another one of those funny coincidences.
Geithner talks about the top 2%, but what he didn’t tell you is that the way the tax code works that top 2% excludes much of the very wealthy [see this link for details why]; who such a tax smacks are the genuine wealth creators , upper middle class risk takers and small businesses. A husband and wife with two kids may own and operate three local pizza shops and on paper that small business will bring in $250,000 a year in income (notice I did not say profits, I said income), but most of that money will go to paying employees, buying the pizza delivery man’s gasoline, food, energy for the ovens and freezers, boxes, cleaning supplies, wages, other taxes etc. Everyone must get paid before the owners do and they will be lucky to scrape $50K for themselves, which in turn they will be paying more taxes on.
Then comes the right hook, “Mr. Geithner, how can one be against small businesses that actually hire (pause for effect) and for jobs at the same time?”
I just talked to Addison Scott, who is on Congressman Ellmers’ staff, and I passed those two questions on to them. I can’t wait to see her lay these two questions on Geithner and watch him squirm.
Geithner’s explanation of the administration’s small-business tax plan came in an exchange with first-term Rep. Renee Ellmers (R.-N.C.). Ellmers, a nurse, decided to run for the U.S. House of Representatives in 2010 after she became active in the grass-roots opposition to President Barack Obama’s proposed health-care reform plan in 2009.
“Overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring,” Ellmers told Geithner. “They just simply cannot.”
She then challenged Geithner on the administration’s tax plan.
“Looking into the future, you are supporting the idea of taxation, increasing taxes on those who make $250,000 or more. Those are our business owners,” said Ellmers.
Geithner initially responded by saying that the administration’s planned tax increase would hit “three percent of your small businesses.”
Ellmers then said: “Sixty-four percent of jobs that are created in this country are for small business.”
Geithner conceded the point, but then suggested the administration’s planned tax increase on small businesses would be “good for growth.”
Good for the growth of government perhaps, not the economy.