Small Businesses Face Big Tax Hike
Tax relief will quietly expire and pick pockets without a fight
In the second presidential debate, President Obama reiterated his claim that his tax policy would only raise taxes on 3 percent of small business owners, commenting that "97 percent of small businesses … will not see a tax increase." While the claim sounds great, it's not true. The president is ignoring his own plan to return the payroll tax to 2010 levels.
I'm referring here to the president's overall tax policy, not just his plans for the Bush tax cuts. That overall policy includes what he plans to do to recent cuts to payroll taxes. The 2010 Tax Relief Act (PDF) lowered the employee's share of Social Security taxes from 6.2 percent to 4.2 percent of wages, up to the maximum subject to Social Security taxes ($110,100 in 2012). That tax cut was later extended, first for January and February of 2012, and then for the remainder of this calendar year.