chanel
Silver Member
Senate Democrats and the White House are seeking a one-year freeze in the interest rate. The $6 billion cost would be offset by limiting a tax provision that allows some owners of so-called S-corporations to avoid paying Medicare payroll taxes on their earnings, Senator Tom Harkin, an Iowa Democrat, told reporters yesterday.
Harkin said the legislation would require the Medicare payroll tax on income of more than $250,000 a year earned at S-corporations with fewer than three shareholders.
Millions of small, family owned businesses around the country are classified as S-corporations, and would be caught up in this tax net for no reason other than that they are small, and successful. And keep in mind that the profits which are credited to shareholders of S-corporations often remain in the business, funding the salaries of new employees and other investments.
The worst of it is that this a new, permanent tax on small businesses $9 billion over 10 years according to the CBO - to fund the cost of just one year of the interest rate freeze ($6 billion). If this is the right cause then the cause isnt long-term financial relief for college students, its the re-election prospects of Democrats in November.
Terrific: Senate Dems offset cost of student loan bill with higher taxes on small business « Hot Air