Former Labor Secretary Reich: Bush-Era Tax Cuts Hurt Quite a Lot

ROBERT REICH:

Well, let me emphasize, number one, small business leaders were not hurt during the Clinton years, where the Clinton marginal tax rate on the top earners was 39 percent.

Secondly, only 3 percent of small business owners have incomes over $250,000 and would be affected, in any event. Thirdly, we're only talking about the marginal income tax — that is, only their incomes over $250,000 would be affected. Anything under $250,000 would actually be subjected to a lower tax rate than they had before.

The other thing to note, Jeff, is that, when Republicans and others who don't want to go back to the Clinton tax rates talk about small businesses, they fail to acknowledge that most of the really very wealthy small businesses, the ones that are earning a lot of money, those are really individuals.

They are investment bankers, or they are doctors or lawyers who have registered themselves and they talk about themselves and they also file income taxes as if they're businesses. And that's good for them in terms of their tax rate, but they don't generate a lot of jobs.

These are not mom-and-pop stores or mom-and-pop factories. These are very high-paid professionals. So, there's no reason that they should be subjected to another year — or no reason that they should get another year of the Bush tax cut that was really designed and everybody expected it would be only 10 years.

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