In a role reversal, some Republicans are advocating for what amounts to a tax increase and some Democrats are pushing for a tax cut.
At issue is the extension of a payroll tax cut Congress passed last year. It’s due to expire in December.
During a press conference on Aug. 26, state Democratic-Farmer-Labor party chairman Ken Martin asked the state’s GOP delegation to make clear where they stand on the issue. He also highlighted President Obama’s tax record.
“President Obama has cut taxes for 95 percent of working families and has cut taxes for small businesses 17 times,” he said.
Martin’s statement is true.
The stimulus bill included a handful of tax cuts that affected roughly 96 percent of the population, according to the Tax Policy Center, a tax think-tank in Washington, D.C.
According to the same group, nearly all workers are benefiting from last year’s agreement to lower workers’ Social Security payroll contributions from 6.2 percent to 4.2 percent of their wages.
Since Obama took office, taxes have been cut for small businesses – and larger companies, too – 17 times. The perks are buried in different bills, and include a tax credit for hiring people who have been out of work for at least two months, a new deduction for health care expenses for the self-employed, and eliminating the capital gains tax on some small business investments.
The White House touts those 17 cuts on its website, and the president’s critics don’t dispute the figure. They do, however, point out that taxes have also increased for some of these same businesses; a penalty on employers with more than 50 workers that do not offer health insurance is a frequently cited example. The fine goes into effect in 2014.
Others, argue that because the cuts are targeted, they’re more like loopholes or tax expenditures. Will McBride, an economist at the conservative Tax Foundation, said such cuts only serve to make the tax code more complex.
“It doesn’t sound like good tax policy,” he said.
Martin’s statement is correct. Between the stimulus bill and the payroll tax cut, taxes have been cut for about 95 percent of taxpayers. And since Obama’s been in office, small businesses have benefited from 17 tax cuts.
DFL press conference, Aug. 26, 2011
PolitiFact.com, Tax cut for 95 percent? The stimulus made it so, by Angie Drobnic Holan, January 28, 2010
The White House Blog, Seventeen Small Business Tax Cuts and Counting, Feb. 25, 2011
The New York Times, For Some in G.O.P., a Tax Cut Not Worth Embracing, by Jennifer Steinhauer, Aug. 25, 2011
The Kaiser Family Foundation, Summary of the new health reform law, accessed Sept. 1, 2011
PolitiFact, The Obama administration has cut taxes on small businesses 17 times, by Robert Farley, June 12, 2011
The Internal Revenue Service, The Making Work Pay Credit, accessed Sept. 1, 2011
Email exchange, Kristin Sosanie, spokeswoman, Minnesota DFL, Sept. 1, 2011
Interview, Roberton Williams, the Tax Policy Center, Sept. 1, 2011
Interview, Will McBride, the Tax Foundation, Sept. 2, 2011