T
he most easily proven fact herein is the Reid is not as good a liar as the "Great Bunghole".
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Sen. Harry Reid's Unicorns: Fact Checking A Whopper
http://www.forbes.com/sites/paulroderick... [1]
Paul Roderick Gregory, Contributor
12/25/2011 @ 10:15 PM
Tax policy should be serious business carried out by serious politicians
using real facts and figures. This is why we have the Library of Congress and
the Congressional Budget Office, among other expert institutions.
How can we take Congress seriously when the Senate Majority Leader, Harry
Reid, makes patently inaccurate, outrageous and bizarre claims on an
important tax-policy issue without any heads being turned? I guess this is
what we have come to expect of Congress. No wonder citizens with favorable
opinions of Congress are as rare as unicorns, to borrow a phrase.
Harry Reid's statement on December 6 on his proposed 1.9 percent surtax on
million-dollar incomes has kicked up some dust. Here is his statement:
"Millionaire job creators are like unicorns. They're impossible to find,
and they don't exist… Only a tiny fraction of people making more than a
million dollars, probably less than 1 percent, are small business owners. And
only a tiny fraction of that tiny fraction are traditional job
creators…Most of these businesses are hedge fund managers or wealthy
lawyers. They don't do much hiring and they don't need tax breaks."
Taking their cue, National Public Radio launched a search for one millionaire
job creator. They triumphantly announced:
"NPR requested help from numerous Republican congressional offices,
including House and Senate leadership. They were unable to produce a single
millionaire job creator for us to interview."
Were it not for Google, I would have accepted Harry Reid's unicorn story
and NPR's confirmation. Unlike Harry Reid's office, I went to the IRS's
Table 1.4 "Sources of income, adjustments, and tax size of adjusted gross
income, 2009" to check things out. (I summarize my sources in a separate
blog posting). Here is what I found:
There are 236,883 tax filers with incomes of a million dollars or more. By
Harry Reid's count, only one percent, or 2,361 of them, are business
owners, and a tiny fraction of them create jobs. I do not know what Harry
means when he says "a tiny fraction of a tiny fraction." If we let 5
percent represent Harry's "tiny fraction," we are left with 118
businesses owners who earn a million or more and create jobs. Yes, they are
only slightly less rare than unicorns, if Harry is to be believed.
This leaves 236,765 million-dollar-plus tax payers, most of whom are "hedge
fund managers and wealthy lawyers" who "don't create jobs and don't
need tax breaks."
My Google search for Harry Reid's quarter million hedge fund managers and
wealthy lawyers came up empty handed. I could identify at most sixteen
thousand "wealthy lawyers and hedge fund managers," not Harry Reid's
quarter million.
Well, Harry Reid's numbers leave much to be desired, but maybe he is right
that millionaire business owners do not create jobs.
What does the IRS have to say about this? Millionaire tax filers earn a total
taxable income of $623 billion, on which they pay the highest average rate
(30 percent) of any tax bracket. (Either Warren Buffet's secretary has an
incompetent tax accountant or Buffet has some pretty juicy tax breaks. I
think the latter is more likely). A 1.9 percent tax surcharge on
million-dollar-earners would yield $11 billion, assuming those shifty
millionaires take no evasive action to avoid the tax.
Millionaire tax filers earn $221 billion – almost a quarter of a trillion
— from business and professions, partnerships, and S-corporations. This is
puzzling: If Harry Reid's figure is correct (2,361 millionaire businesses),
then the average millionaire-owned business earns almost a hundred million
dollars, and all, except 118 of them, do this without hiring anyone. These
super heroes do their own typing, selling, drafting. public relations,
building, and manufacturing. They do not need employees. Remarkable!
To summarize:
Millionaire tax filers earn almost a quarter trillion dollars from their
businesses. They must hire hundreds of thousands of employees to do so.
There are a trivial number of millionaire hedge-fund managers and wealthy
lawyers (who, according to Harry, do not hire anyone and don't need tax
breaks). The millionaire tax surcharge is not aimed at them, but at the tens
of thousands of millionaire business owners.
A 1.9 percent surcharge on millionaires would raise at most eleven billion
dollars. By today's standards, this is chump change, within the federal
budget's rounding error.
The millionaire's tax is not about balancing the budget. It is about
gaining political advantage through the use of envy and greed (two of the
seven deadly sins).
Why would Harry Reid tell such whoppers, which are so easily disproved?
Ryan Streeter has hit the nail on the head. He writes that even bearded
Occupy Wall Street misfits understand the difference between "earned" and
"unearned" success. Those who earn success by creating value honestly are
the true heroes in our economy. They should be lauded rather than targeted.
Bill Gates and Steve Jobs are heroes. Bernie Madoff and, now it seems, John
Corzine are not, and everyone, irrespective of their political leanings,
understands this.
Reid, in his clumsy way, is trying to portray Republicans as the party of
dishonest millionaires, who have not earned their wealth, have not created
jobs, detract rather than create value, and refuse to pay their fair share.
Such class warfare will be the anchor of the Democrat election playbook.
[1]
http://www.forbes.com/sites/paulroderickgregory/2011/12/25/sen-harry-reids-unicorns-fact-checking-a-whopper/
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