Small business owners were left scratching their heads after President Obama’s boasts about cutting their taxes 18 times during the debate. How did they miss out on this windfall? When did these wonderful tax cuts happen?
Fox Business got in touch with the Obama campaign and procured a list of the 18 tax cuts. It turns out that a lot of them were temporary affairs, such as increasing the maximum amount small businesses could claim as expenses, allowing larger deductions for property purchased during 2009, and allowing 100 percent expensing of certain assets in 2011.
Six of these “tax cuts” were part of Obama’s stimulus package, which notably failed to stimulate much in the way of economic growth. One “tax cut” was a credit that covers 35 percent of small business health insurance costs… as part of ObamaCare, the largest tax increase to hit the middle class in ages, and a bill that has already caused the cost of health insurance to skyrocket so much that employers are dropping it left and right. That’s like boasting of the comfy memory-foam padding Obama wrapped around the club he used to beat small businessmen into the ground.
William McBride, chief economist for the nonpartisan Tax Foundation, told Fox Business that these little credits and expenditures do more to complicate the tax code than relieve the burden on small businesses. The cost of complying with these mutations to the tax code eats up a lot of the benefits. “They are small, special interest things that aren’t broadly applicable,” he judged. “This is not the right way to incentivize investment. Many of them are mainly arcane as well.”
The only really valuable tax break he found in the set was the provision for accelerating the depreciation of business expenses, which he applauded as “a big deal” that is “worth the effort, and directly leads to immediate investment.”
And of course, the tax bomb Obama and the Democrats are about to drop on everyone in America, the January 1st arrival of Taxmageddon, will dwarf all of these little targeted credits. Fear of these tax increases is already doing more to suppress job creation than any of Obama’s efforts at stimulating it.
Building a maze of special rebates and credits is not the same thing as tax reduction. Tax reduction brings freedom and flexibility. It reduces the burden of compliance, and contracts the sphere of government power. The goal of tax reduction should be getting the government off our backs, not filing down the points on its spurs a little.