GOP's Small Business Tax Talking Point

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Fairness & Accuracy In Reporting (FAIR)

GOP's Small Business Tax Talking Point

Of all the arguments Republicans offer to maintain Bush tax cuts for the wealthy, one stands out: The tax increase would be a blow to small business owners. This is misleading–but you can't count on media to get this right.

The CBS Evening News had a segment last night (11/29/12) taking a look at the issue. On its face, there's not much support for the Republican position:  About 2.5 percent of small business owners–a somewhat loosely defined group–would see a tax hike on income above $250,000  (Tax Policy Center, 8/5/10).  This is straightforward; so how do you make it less so? CBS did it by leading off with a business owner who claims he's about to get socked. Wyatt Andrews reported:

Kevin Green owns two flower and gift shops in Alexandria, Virginia. He said raising taxes on the wealthy won't just hurt him–it will hurt his workers and the economy….  Small business owners typically report business income on their personal taxes. In a good year, Green's income will exceed $250,000, making him one of those taxpayers the president says should pay more–in his case, an estimated $8,000 more.

Remember, if this is all true, that means Green is in the tiny minority of business owners affected by the potential tax increase. Remember, these tax increases would apply to only the income above that $250,000 threshold. Green's claim of an $8,000 increase means that he likely makes substantially more than $250,000. (According to this chart, he would seem to be in the above $500,000 income range.)

So how do you make 2.5 percent sound like a lot? You ditch that number in favor of a total number of affected business (precisely what ABC's Jonathan Karl did back in 2010). So viewers saw this:

Andrews notes that the White House argues that this "small business" category includes people like hedge fund owners–a far cry from the mom-and-pop shopkeeper that Republicans like to talk about. But then he pivots to the Republican counter-argument:

But when Republicans argue higher taxes mean slow down growth, they are thinking about businesses like Kevin Green's.

Well, of course they are. Or at least they say that they are. But journalism should scrutinize these arguments, rather than just repeating them.

This is another attempt to muddy the water in a debate that should be fairly straightforward. This kind of story is a chance for media to do some factchecking. Or, alternatively, to help Republicans flesh out their talking points.

Peter Hart

Peter Hart is the activism director at FAIR (Fairness & Accuracy In Reporting). He writes for FAIR's magazine Extra, and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly" (Seven Stories Press, 2003).

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