We need a term for the practice of using small business as cover to justify a policy that mainly benefits something else. Maybe call it “small biz-washing.” Small businesses, beloved by politicians left and right, are routinely described as some critical piece of the economy’s anatomy, usually “lifeblood” or “backbone.” In an election year, especially with the weak economy center stage, expect to find them frequently showing up in talking points to justify all sorts of policies that are, in fact, about something other than small business.
The latest example: another claim that letting the Bush tax cuts for the wealthiest filers expire will “hurt small-business job creators in particular.” The justification for this is a new report (PDF) from Ernst & Young, commissioned by a handful of business groups that include the National Federation of Independent Business and the U.S. Chamber of Commerce. E&Y’s economic model says that higher income taxes on households making more than $250,000 a year would, in the “long-run,” shave 1.3 percent off gross domestic product and mean 700,000 fewer jobs. By when? The report, somewhat cryptically, says that “two-third to three-quarters of the long-run effect is reached within a decade.”