Stupid is as Stupid Does

In an attempt to make Michelle Backmann look smart, Representative Marsha Blackburn was on morning television touting the Republican Small Business tax legislation coming up for a vote in the House of Representatives. Here is what the NY Times had to say about that legislation: “Congressional Republicans are anxious to enact a new tax cut for small businesses, as well. The Small Business Tax Cut Act, which was reported out by the House Ways and Means Committee on April 10, would give a one-year, 20 percent tax cut to every business with 500 or fewer employees. The Joint Committee on Taxation estimates that it will reduce federal revenues by $46 billion. The committee report offered virtually no rationale for the legislation other than that small businesses are good and deserve a tax cut, period. The linkage between a small business’s tax burden and job creation, however, is tenuous at best. This stands to reason, since business start-ups, the prime engines of small-business job creation, seldom have any profits to tax; most start-ups lose money for the first several years. And since labor costs are already deductible as a normal business expense, there is no reason to think that lowering a business’s overall tax burden, especially if it is just for one year, will have any effect whatsoever on the number of workers it employs. Moreover, the proposed small-business tax cut would skew its benefits overwhelming toward highly profitable businesses that just happen to have a small number of employees. As Steven T. Dennis noted in Roll Call, Oprah Winfrey, a billionaire, would get a big tax cut, because her production company employs about 400 people, and so would the New York Giants, which has about 210 employees and made $1.3 billion last year.” Over 49% of these proposed tax cuts would actually go to businesses with profits in excess of $1,000,000. This would be as effective as the “Bush tax cuts” have been when it comes to creating jobs. Rather than a focus on the “war on women” there needs to be increased focus on “war on stupid women in Congress”.