Geithner says GOP wrong, ending tax cuts for wealthy won't hurt small business
Thursday, August 5, 2010
Senate Republicans held a news conference Wednesday afternoon with a trio of small-business owners to blast the Obama administration's plan to allow Bush-era tax cuts for the wealthiest 2 percent of Americans to expire at the end of the year, while extending only those that apply to middle-class families. They argued that more than half of all small-business income would be hit by the increase, potentially imperiling businesses that employ as many as 30 million workers.
"The impact of all this taxation, regulation and, yes, litigation as well, has a deterrent effect on what we all would like to do, and that is to create jobs," said Senate Minority Leader Mitch McConnell (R-Ky.).
Hours later, in a speech at the Center for American Progress, Geithner called the GOP effort "a political argument masquerading as substance." He said letting the top-level tax cuts expire would affect fewer than 3 percent of small businesses, leaving the vast majority untouched. He also suggested that Republicans are using a misleading definition of "small business." According to the GOP's definition, Geithner said, a small business could include partners in a major law firm and directors of a large financial company.
"If you actually want to help small businesses get needed tax relief as opposed to using them as a cover for supporting tax cuts for the most well-off," he said, "those people should be supporting Senate passage of the Small Business Jobs Act this week." The bill is stalled, and aides said it may not pass until after the August break.
Geithner reiterated the administration's case for extending tax cuts for families making less than $250,000 a year while allowing the upper-class cuts to expire. "There is no credible argument to be made that the purpose of government is to borrow from future generations of Americans to finance an extension of tax cuts for the top 2 percent," Geithner said., saying such a move would amount to "a $700 billion fiscal mistake."
"It's not the prescription the economy needs right now, and the country can't afford it," he said.