October 31, 2011 · 0 Comments
By Dean Baker:
Apparently they would be, if we listen to the people interviewed in an NYTpiece about the impact of a surtax on incomes above $1 million proposed by President Obama. The NYT interviewed people who own small businesses that occasionally have earnings that would put them over this $1 million cutoff.
It would have been helpful if the article had reminded readers that the tax is a marginal tax so that if a business owner crosses the $1 million threshold they would only pay the tax on the income above the threshold. For businesses that just slip into this category the additional tax burden would be trivial. It is implausible that it would have a noticeable effect on their business, even though business owners are not likely to be happy about paying the tax.