So there was I, driving the kid to her little school this morning, listening to Steve Inskeep trying to squeeze some logic out of Saxby Chambliss. They got to the topic of tax rates. As you know, getting the media, especially prominent types like Inskeep, to understand and speak accurately about marginal tax rates is one of my crusades.
My heart soared like an eagle when I heard Inskeep press Chambliss on marginality and how an increase of 3.6 percent only on taxable dollars earned above $250,000 would affect the GOP's beloved small businessman:
Inskeep: If somebody is making 300, 400 thousand a year in a small business, and the marginal tax rate, the taxes on the upper part of their income, goes up a point or two points or three points, they're paying more in taxes but not a lot more…
[There's no transcript yet, and I noted verbatim only Inskeep's remarks, but Chambliss tried to argue that this small increase might make the difference between this business owner hiring one person or two people.]
Inskeep: ..Somebody’s making 300 or 400 thousand a year, and taxes are raised by a couple of percentage points on the upper part of his income--not his entire income, but the upper part of his income--and he’s paying an extra couple thousand bucks, that’s gonna stop him from hiring someone?
To this, Chambliss had no real answer, falling back on the talking points about taxes and growth. Because there is no answer. Let's just quickly do the math. If this businessman has a taxable income of $350,000, he's going to pay under Obama's plan an extra 3.6 percent on his last $100,000 dollars earned (the dollars above $250,000), or $3,600. He's not paying his employees much if that's gonna make the difference between him hiring one or two people.
Anyway, well done Inskeep. He didn't quite use my preferred formulation that journalists speak of proposed increases on "dollars earned" rather than on people or households, but he got the point across. Would that everyone follow his example. (Although, good sir, if you're reading this, you slightly mispronounced my name on the air a few weeks ago. Tomasky rhymes with pass key. Or Victor Navasky. It's not To-mahs-sky, which strikes me as sort of Russified. But no big deal and thanks for the mention.)
