Obama’s Tax Hike on Job Creators
By Amy Payne @ The Heritage Foundation (July 10, 2012)
As Heritage’s Curtis Dubay explains in new research, the President’s tax increase would fall heavily on important job-creating businesses that pay their taxes through the individual income tax, known as flow-through businesses.
There has been considerable debate about whether flow-through businesses that pay the higher rates are job creators. A report from Obama’s own Treasury Department, however, provides data that settle the point conclusively. For the first time, this report breaks out the number of flow-through businesses that have employees.
According to the Treasury study, 4.3 million of these small businesses employed workers in 2007 (the most recent year for which data are available). The Treasury report shows that 1.2 million, or 28 percent, of them earned more than $200,000—the income threshold over which President Obama’s tax increase would apply. More importantly for job creation, those 28 percent of businesses earned almost all—91 percent—of the income earned by flow-through employer-businesses.