Speaking on the Subject of Healthcare Reform, Congressman Boehner interrupted a reporter's question to give an example of how the Obama plan to raise taxes on the wealthiest 3% might effect others. In the example, Rep. Boehner posited a hypothetical Subchapter-S corporation with income of $500,000.
In a Subchapter-S Corporation, all income passes through to the taxpayer, In Rep. Boehner's example, the taxpayer's income is only $150,000. But according to Rep. Boehner's implication, this hypothetical $150,000 taxpayer would pay increased taxes—on the total $500K,000 of the pass-through income.
This Is Not the Case. This is not the way the tax code works at all.
In Such a Situation, the Exact Opposite Is the Case: the taxpayer might earn $500,000 in his Subchapter-S corporation, but after deductions and exemptions, and credits, if his income came out on the 1040 tax form as $150K, he would not be affected by the Obama proposals. In fact, this taxpayer would pay less tax under the Obama healthcare plan.
As Promised During the Presidential Campaign.
Maybe Rep. Boehner Doesn't Know How the Tax Code Works. Or did he perhaps misspeak? Or did he intend to deceive or to scare us? Or is some other reasonable and logical explanation missed?
It Would Be Good to Know the Answer, and I trust the media in Ohio to investigate. What is the story in this seemingly odd hypothetical situation, that may fly under the radar of most Americans' understanding of the tax code.
This Situation Makes a Perfect Opportunity for media to demonstrate its value, by chasing down the answers. As I write, it is more than twenty-four hours since the incident. occurred. Are the newspapers and TV stations and bloggers of Ohio not paying attention?
Which Ohio Paper or Radio Station will be first to call Rep. Boehner to account?