The Wealthy may in Fact Be the Small Business Owners

Taxes are the primarily the basic life-support of the government. Without the existence of taxes, the government will not be able to implement programs and projects as they need appropriate funding to so. Government programs such as healthcare, national defense, social security and infrastructure development all rely on taxes to get them going. It should be noted that the previous Bush administration has implemented tax cuts or tax discounts to various businesses.

Today, the Obama administration together with his Democrat supporters has proposed to remove these tax cuts in order to improve tax collection and help reduce the budget deficit. They instead wanted to grant tax cuts on individuals who are single and are earning $200,000 a year. They also included couples who are earning lesser than $250,000 a year. The idea is that people who earn less should only be the one to receive lower taxes as well.

On the other hand, the Republicans opposed their claim and want to maintain these tax cuts. They say that most wealthy people who enjoyed and benefited these tax cuts are in fact small businesses owners. These small business owners are the work-horse of the economy and are employing thousands of individuals. Stephen Hayes, a known conservative specialist, said that the Obama administration is trying to raise taxes on people who are going employ a lot of people and who are supposed to help fuel back the economy.

With two contrasting statements, we are left with the task of figuring out if these wealthy individuals are certainly small business owners. While it is quite impossible that all these taxpayers are small business owners, it is good to figure out just how much do they comprise of the entire taxpayer’s population. Hayes’s claim is based on the Internal Revenue Service data indicating that a lot of the wealthiest taxpayers are in fact declaring a non-wage income such as income from a sole proprietorship or from a partnership.

While it may be hard for us to determine if these high earners are really those we perceive as small business owners, the government should provide a more clear definition of this so called “small business owners”. The effect of the expiration of tax cuts is still uncertain up to now. The republicans gave a reasonable logic that tax cut expiration on small businesses would in fact damage further the economy through unemployment. Let us just hope that the government is aware of this and will come up with ways to salvage the economy and empower these small businesses to provide more jobs.