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Posted: 8:35 a.m. Friday, Sept. 23, 2011

Raising taxes on the rich affects jobs creation 

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Top Individual Income Tax Rates
Top Individual Income Tax Rates

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By Neal Boortz

Yes, I do have the figures to prove it.  The grand argument that libs and progs use to defend their tax hikes for the evil rich is that it would only affect a small portion of small business job creators in this country.  It is true that income tax increases would affect a relatively small number of job creators, but they fail to mention that these are the same people responsible for much of the job creation in the first place.  If Obama and the Democrats get their way, their taxes will be going up.  But here’s how that will affect job creation, according to 2010 Congressional testimony by Chris Edwards, Director of Tax Policy Studies at the Cato Institute.

A Joint Committee on Taxation analysis looked at the share of business income on individual returns that is in the top two tax rate brackets. The JCT found that about 25 million individual tax returns will report about $1 trillion of net positive business income in 2011. Of that total, $437 billion, or 44 percent, will be taxed in the top two income tax brackets and thus will face the proposed tax increase.

Finally, a microsimulation analysis by analysts at the Tax Foundation looked at the share of the proposed tax increase that would fall on business income versus other sorts of income. They found that the tax rate increase would raise about $90 billion in 2011, measured on a static basis. Of that total, about $36 billion, or 40 percent, would be from tax increases on business income.

In sum, various estimates show that while only a small share of tax returns will be hit by raising the top income tax rates, those that will be hit represent a large share of all business income on individual returns. Further, business income represents a large share of all the income that will be hit by the proposed tax rate increases…..

Once a small business is up and running, empirical tax research by economists Robert Carroll, Douglas Holtz-Eakin, Mark Rider, and Harvey Rosen found that higher individual income tax rates negatively affect hiring, investment, and expansion. One of their studies found that changing the "tax price" (one minus the marginal tax rate) faced by small businesses by 10 percent changed the likelihood of hiring workers by about 12 percent. Thus, raising the top income tax rate from 35 to 39.6 percent would reduce the likelihood of hiring by affected businesses by more than 8 percent.

Now let’s take a look at the investors who help get these small business folks, these entrepreneurs on their feet.  After all, for years start-ups have been responsible for most new net jobs in the United States.  And those start-ups would not have gotten off the ground without … 

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Neal Boortz chronicles his 42 years of talk radio in his book "Maybe I Should Just Shut Up and Go Away" Available on line and printed from Barnes and Noble and Amazon.

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