On "Morning Joe" yesterday, Joe Scarborough took a stand against President Obama's plan to raise taxes on income above $250,000, saying that if you're a small business owner making $265,000, raising taxes during these difficult economic times will burden you so much and make you so much less likely to hire more workers. (Sorry, I can't be bothered to find you the quotes showing exactly what he said.)
I guess he used $265,000 because that's only, what, five times the median household income in this country, and any number beyond that would seem to validate the point that these people who might pay higher taxes on their income above $250,000 next year are rich enough that they can afford it.
As I listened to Joe pity those poor small business owners struggling to get by with only a quarter million dollars a year, I did some basic math:
Of the $265,000, it's only $15,000 that's going to be affected by the rates reverting to pre-2001 levels. And the tax rate for that amount will rise from 35 percent to 39.6 percent. So that's a 4.6 percentage point increase.One percent of $15,000 is $150. Multiply that by 4.6 and you get $690.
So basically the struggling business owner making more than 98 percent of the country will have to forgo updating his iPad next year to be left with the same amount of money as this year.