- The Washington Times - Thursday, May 10, 2001

One of the most important parts of President Bushs tax-cut plan is the reduction in the top rate. Thats because the top rate affects mostly small businesses, which create 75 percent of all the new jobs in this country.
The top marginal income-tax rate, which Ronald Reagan cut to 28 percent in the 1980s, was raised to 33 percent by Mr. Bushs father (an action he later said was a mistake). Then Bill Clinton came along. With the support of virtually every Democrat in Congress, he jacked the top rate up to nearly 40 percent (39.6 percent). He characterized it as a tax increase on rich people "who do not pay their fair share" when, in fact, the people in the top two tax brackets pay most of the federal income taxes.
Mr. Bush wants to cut this top tax rate and the 36 percent rate down to 33 percent. But House and Senate liberal Democrats are fighting to keep the top rate as high as they can, even though it largely hurts small businesses that are trying to expand, invest and hire more workers. Women-owned businesses, a major force in the economys growth, will be especially hurt if the Democrats get their way.
Democratic leaders keep repeating their poisonous mantra that the Bush tax cuts will benefit only the wealthy at the expense of lower-income and middle-class workers. But a U.S. Treasury Department study showed on Monday that 77 percent of the tax relief from lowering the top rates will benefit small-business owners, entrepreneurs, and families that own small farms.
Though it is not widely known, most of these business people pay taxes through the personal income tax, not the corporate tax, which gives bigger businesses a number of tax breaks and loopholes to reduce their tax liabilities.
These small businesses and entrepreneurs account for 63 percent of the 1.3 million taxpayers who would be helped by Mr. Bushs lower 33 percent top rate.
In many cases, these small enterprises are run by husband-and-wife teams, women starting new careers, ambitious immigrants, people who began at the bottom and are working hard to achieve the American dream. Often, they are plowing their profits back into the business to expand production, hire more workers, and raise salaries and other benefits.
This isnt a tax cut for corporate, fat-cat multimillionaires, as the liberals want us to believe.
This is a tax cut aimed at the people on Main Street the merchants, shopkeepers, farmers, and thousands of entrepreneurs who are running relatively small businesses. These are people who dream of building a company that will be the McDonalds, Wal-Mart, Microsoft or Dominos of the future. They contribute a great deal to our dynamic, highly productive new economy.
Over the last two decades, women-owned businesses have become the fastest-growing part of the small-business sector. They now employ more Americans than all of the Fortune 500 companies combined.
These are the people the Democratic Party seems to have forgotten, the self-employed people who have borne the brunt of the Democrats polarizing, class-warfare politics. The kind of people Al Gore, Dick Gephardt and Tom Daschle think should have 40 percent of their income skimmed right off the top by Uncle Sam.
There are 25.5 million small-business owners in our country. They and the people they employ make up more than half of the private work force in America, and are responsible for more than half of the countrys economic growth. These are the risk-takers, investors and innovators who challenge the status quo in order to create new products, services and markets. They have emblazoned their names across the road signs of America, and have made this country a land of opportunity.
These are the inspiring American heroes of our day who, sadly, will not get their faces on the cover of Time and are never profiled on the nightly news shows. But they are getting up each morning, putting in 14-hour days, and making America work.
These are the people who are at the heart of the presidents pro-growth tax-cut policy, which aims to shake the U.S. economy out of its lethargy and infuse its small-business, entrepreneurial core with new energy and optimism about the future.
This is why the governments new data showing that 77 percent of the tax relief will go to small-business people is so important to the debate on future tax rates.
You are going to hear a lot of divisive, left-wing demagoguery about "tax cuts for the wealthy" in the coming Senate battle over Mr. Bushs plan. But when you hear the liberals make that charge, think of all those small Main Street businesses that are being punished by the top rate. Thats whom they are really attacking. And, indirectly, they are attacking the people who are working for them.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide