A couple of weeks ago, we explored the question of whether Obama’s proposed tax increase on high wage earners would affect small businesses. We gave one Pinocchio to Rep. Dave Camp (R-Mich.), the chairman of the Ways & Means Committee, for claiming the tax hike would hit half of all “small business income.”
The column prompted a lot of debate, with a number of small business owners writing that we were too easy on Camp. They said higher taxes never made much of a difference in whether to hire new employees.
The argument is that wages come before taxes, and in fact hiring a new employee would be tax-deductible. As one writer wrote: “I invested more in my business, especially as tax day drew near, because the alternative was giving a big slice of the money to Uncle Sam.”
Now Lori Williams, a data analyst at Seattle-based Tableau Software, on her own crunched some of the data we used and put it in a nifty chart. It gives a vivid picture of how a relatively small percentage of small businesses would be affected by higher tax rates. It’s a pretty impressive visualization and we wanted to share it with our readers. (Figures for the companies are expressed in thousands, so 540K means 540,000.)
We will be expanding this column in the near future to include more opportunities for reader contributions. We thank Ms. Williams and Tableau Software for sharing their expertise.