As I've been noting (and noting), Republicans say that not continuing the Bush tax cut on the upper brackets would affect "half of all small-business income" rather than the more straightforward half of all small businesses.
Now I notice this Washington Post article from a few days ago that I'd missed that really explains what kind of chicanery is going on here. Reporter Lori Montgomery:
Among the firms Republicans want to protect from new taxes, according to research by House Democrats: The management team at Wall Street buyout firm Kohlberg, Kravis and Roberts (KKR), which recently reported more than $54 billion in assets managed by 14 offices around the world. Auditing firm PricewaterhouseCoopers, a household name with operations in more than 150 countries. And the Tribune Corp., which owns the Chicago Tribune, the Los Angeles Times and the Baltimore Sun.
KKR, PricewaterhouseCoopers and the Tribune, it turns out, are organized as "pass-through" entities - companies that typically avoid corporate taxes by reporting profits on the individual tax returns of their owners, managers or shareholders.
The vast majority of "pass-through" entities are, in fact, small businesses, often with one or two employees and very small profits. Next year, the nonpartisan Joint Committee on Taxation predicts that taxpayers will report about $1 trillion in income from pass-through entities. Only about 3 percent of them - about 750,000 taxpayers - will earn more than $250,000, the threshold at which Obama would raise tax rates. Those returns will account for about half of all pass-through business income, the JCT reported, meaning the tax hikes would strike a large segment of such activity.
But not "all of the income is from entities that might be considered 'small,' " the JCT said in a report issued in July. "For example, in 2005, 12,862 S corporations and 6,658 partnerships had receipts of more than $50 million."
Also a pass-through corporation: the Bechtel Corp., the worldwide construction and contracting giant and the US's fifth-largest business, with 44,000 employees across the globe and revenues of more than $30 billion.
So this is what we're talking about. Now, you can of course take the position that raising the top marginal rate on Bechtel's earnings by 4.6%, up to a level they used to pay anyway a decade ago and still far far far less than they paid 30 years ago, is counterproductive. That would be a position I'd disagree with, but at least it's respectable and intellectually honest. So if Mitch McConnell, Eric Cantor et alia were out there saying "Bechtel is the kind of company that made America great and we must keep their taxes low," that would be one thing.
But this is not what they say, because they know that they can't win any debates stating their actual concern, which is large pass-through corporations that donate to their campaign committees. So they use a shady phrase like "half of all small-business income" that is quite obviously intended to make the listener think that any successful small business is going to get hammered by a massive tax increase.
Think about that strategy meeting, where someone said, "I know! Let's say 'half of all small-business income.'" Think about the mental process involved in coming up with that lie. And then think about how you'd feel about yourself going out there and saying it day after day.
As a rule, the Republicans do this kind of thing very frequently for the simple reason that their real concerns are rich people and large corporations but they always have to make it sound like their concerns are regular people. Hence, small businesses now, and "the family farm" when the debate was over the estate tax. And they know very well that news reports that correct them will take days or weeks to manufacture, will be buried in the back pages and will attract the attention only of cranks like me.
