Demagogue

Yesterday morning, President Bush traveled to the Virginia suburbs and talked about the way his tax cuts have helped small businesses:

"... the tax relief helped small businesses a lot. And since small businesses create two-thirds of the new jobs of America, it is no wonder that our job base is expanding. When you help the small business owner with tax relief, you're helping to create employment. And that's what we're seeing across the country."

That's wishful thinking. In this 2004 analysis, the Center on Budget and Policy Priorities dismantled Bush's claims:

... the President has repeatedly invoked the benefits his tax cuts, and especially his proposal to reduce the top income tax rate, provide to small businesses. Yet, according to Treasury Department data, the top rate reduction benefits only two percent of small business owners. In other words, 98 percent of small business owners are not in the top tax bracket.

In fact, many more [small business owners] receive the Earned Income Tax Credit for lower-income working families than are in the top bracket.

Furthermore, the Administration’s definition of “small business owner” includes anyone who earns even one dollar of income that is classified as business income under the tax code. Under this definition, one need not actually run or own a major share of a business to be classified a business owner.

This definition includes wealthy individuals whose primary income does not come from small business ownership or operation but who do some consulting or invest in real estate on the side.