Small Businesses

To hear Republicans talk, increasing the tax on the top two marginal tax rates will kill small businesses.  However, consider the fact that very few small businesses generate an income that would allow the owners to feel any increase in tax rates on income over $250,000. Small business owners with less than one year of experience in running an organization earn an annual salary ranging from $34,392 to $75,076. Those with more than 10 years experience, on the other hand, earn upwards of $105,757 per year.  Men who own small businesses earn a salary that ranges from $42,575 to $96,111. Women, on the other hand, only earn $31,380 to $71,140 every year. Special skills can affect an entrepreneur’s average income. Those with accounting skills, for instance, earn an average annual salary ranging from $38,884 to $81,313, while individuals with sales management experience earning income ranging from $45,000 to $104,762. Finally, entrepreneurs employed on the coasts earn more than their counterparts in the South and Midwest. Entrepreneurs in New York, for example, earned a median yearly salary upwards of $125,185, while those in Georgia top out at $75,500. Now keep in mind that everyone, regardless of the level of AGI (adjustable gross income) will receive the reduced tax rates for AGI under $250,000.  An increase in tax rates ONLY affects income that is over the AGI of $250,000. For some strange reasons, Republicans are not telling you this important fact.  In fact, it is ignorance of this fact that have resulted in so many people who will never see an AGI anywhere near $250,000 voting against anyone who says they would vote for increasing the top two tax rates.  Speaking of ignorance, it is also interesting that the top ten states with the most educated citizens voted for Obama while the bottom ten states with the least educated citizens all voted for Romney.  Ever since the “Reagan Revolution”, Republicans have used citizens ignorance of the tax system to promote their low tax mantra which has resulted in the demise of the middle class while the top 1% of income earners have enjoyed spectacular growth.  The only job killers Americans need to worry about are the CEOs who are lining their pockets with massive increases in income while they outsource jobs and layoff employees.  While the cliché is you are never hired by a poor person, the corollary is true that you also will never be fired by a poor person.  The reality is more people are hired by far more small business owners who will never see their personal AGI over $250,000 than buy the small business owner enjoying taxable incomes in the millions of dollars.