I run a packing and shipping business in Baton Rouge. So when elected officials talk about helping small businesses, I’m all ears. Unfortunately, their claims about helping us often have too much packaging and not enough substance.
That’s the case in the debate about the Bush tax cuts. One of the staples in this debate is a claim about “protecting small business” being made by defenders of extra tax cuts at the top. Let’s unpack that claim.
The fact is that 97 percent of small businesses won’t be affected by ending the Bush tax cuts for income above $250,000 a year. For us, this isn’t an issue.
An average packing and shipping store grosses $300,000 to $500,000 a year. Hearing that, you’d think that business would be affected by ending the Bush tax cuts — but it won’t. That’s because small business owners don’t pay personal income taxes on our gross receipts; we pay taxes on net profits. Even with a nice profit margin, say 10 percent, that owner might take home $50,000 — far from the $250,000 threshold.
But the myth persists, and for two reasons: First, it’s politically convenient. Politicians would rather claim they’re protecting small businesses than admit they’re protecting millionaires. And second, some big business interests are perfectly happy to muddy the waters and disguise themselves as small businesses.
Political sound bites aside, here’s my vision for real help for small businesses: End the Bush tax cuts for the richest 2 percent and reinvest the $1 trillion in savings in our communities and local economies.
Here in Baton Rouge, we could use our share to renovate broken-down schools and restore lost funding for programs that educate our youth for the 21st century work force. We could rebuild crumbling roads and bridges. We could strengthen Medicare so people don’t have to spend their last dime on health care.
That last point is near and dear to me. My husband and I have Medicare, thank goodness. My husband has compromised lungs, and when he got pneumonia, followed by a blood clot and staph infection last year, he spent three weeks in the hospital. I understood for the first time how people can go bankrupt with medical bills. If Medicare hadn’t been there, we’d be broke.
Medicare is important to a whole lot of small business owners in the baby boomer generation. It’s important to our customers and local economies, too. Medicare and other programs like Medicaid and Social Security support jobs and keep money in seniors’ pockets, money they spend in local businesses.
So, enough cardboard claims and bubble-wrapped promises. If you’re serious about helping small businesses, protect Medicare, Medicaid and Social Security — not more tax cuts for the rich.