The Corner

Know Thy Constituents, Mr. Leader

House Republicans rightfully have emphasized the job-destroying effects of the surtax proposed to finance the House Democratic plan to nationalize our health-care system. The surtax begins at $280,000 of adjusted gross income for individuals and escalates to an unfathomable 5.7% on incomes above $800,000 for individuals and $1 million for joint filers. It would apply to all forms of income, including the income reported by small-business owners on their individual returns. Hence, the Republican protests that this is really a massive tax on small business.

House Majority Leader Steny Hoyer (D., Md.) scoffs at the notion that new tax will even affect small businesses. Yesterday’s edition of the Hill quotes him as saying:  

 I don’t know any small businessmen or women making $280,000, so I don’t think it will hit very many small businessmen or women.

Really? The distinguished majority leader needs to get out more. In 2006, the latest year for which IRS data is available, 1,892 of his constituents reported both wage and salary income in excess of $200,000 and income from a business. Their business income totaled $108.7 million, an average of $57,452. Given that these entrepreneurs also reported considerable income from dividends, interest, and capital gains realizations, surely there is someone in Maryland’s 5th congressional district whose total income exceeds $280,000 and might therefore be on the receiving end of this proposed surtax.

Were he to venture beyond his own constituency, Hoyer could choose from among the 1 million businessmen and women who satisfy these criteria (i.e., more than $200,000 in wage and salary income and some business income). Since their business income totaled $79.7 billion, an average of $77,297, there undoubtedly would be a few more who would feel the wrath of this surtax and be willing to discuss it with him.

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