Geithner Says Taxes on Small Business Must Rise So Government Doesn’t Shrink; Mish's Five Point Alternative Proposal

Sometimes you see a headline so silly you have to wonder if it is really accurate. Please consider this headline of an exchange between first-term Rep. Renee Ellmers (R.-N.C.) and the Secretary of the Treasury: "Geithner: Taxes on Small Business Must Rise So Government Doesn’t Shrink"

Treasury Secretary Timothy Geithner told the House Small Business Committee on Wednesday that the Obama administration believes taxes on small business must increase so the administration does not have to “shrink the overall size of government programs.”

The administration’s plan to raise the tax rate on small businesses is part of its plan to raise taxes on all Americans who make more than $250,000 per year—including businesses that file taxes the same way individuals and families do.

Geithner’s explanation of the administration's small-business tax plan came in an exchange with first-term Rep. Renee Ellmers (R.-N.C.). Ellmers, a nurse, decided to run for the U.S. House of Representatives in 2010 after she became active in the grass-roots opposition to President Barack Obama’s proposed health-care reform plan in 2009.

When Ellmers finally told Geithner that “the point is we need jobs,” he responded that the administration felt it had “no alternative” but to raise taxes on small businesses because otherwise “you have to shrink the overall size of government programs”—including federal education spending.

Mr. Secretary, You are Wrong

Ellmers ended the exchange with this statement "Mr. Secretary I would just like to close by saying, On behalf of the business owners in North Carolina and across the country, you are wrong".



Geithner worries we may have to “shrink the overall size of government programs.”

Good grief. The first and foremost thing this country needs to do is dramatically shrink the overall size of government. The way to do that is easy:

1. Slash military spending by at least 33%
2. Cut wages and benefits of government employees
3. Reduce the number of government jobs
4. Get rid of needless programs including the department of energy, HUD, FHA, and the department of education
5. Scrap Davis-Bacon and all prevailing wage laws that drive up expenses for federal, state, and local governments
   

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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