More dishonesty

Again, we have Republicans spreading the lie that to go back to Clinton’s income tax rates would adversely affect small businesses. Business income and personal income are accounted for in different ways and we should not consider business income as being the same as personal income. In the piece I’ve linked to, they explain “pass-through” companies, where yes, business profits are treated as personal income, but not the business income that goes back into the company.

If a pass-through business sells $1 million worth of goods and needs to then turn around and spend $950,000 in order to re-stock, pay employees and pay for things like heat/air conditioning, lights, water, etc., then only $50,000 counts as the owners’ personal income. So yes, a dry-cleaning business or a hardware store might make more than $250,000 in a year, but only their profits get taxed and the first $250,000 of profits get taxed at one rate whereas everything over that gets taxed at another. The rest is considered a business expense.

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