PolitiFact.com put together an informative list of largest misconceptions of the Bush tax cuts, which are due to expire in just over a month. I have included a section of their article below, but you can find the full list of falsehoods here. There’s so many misstated facts and overblown declarations about the cuts, it’s amazing all of Washington isn’t walking around with their pants on fire.
"Should Democrats get their way, every income tax bracket will increase on Jan. 1, 2011. Every single one."
We've noticed that those who favor extending all the tax cuts will sometimes say that their opponents want to see all the tax cuts expire. But this is not the case. It's not President Barack Obama's position, nor of the Democratic leadership in Congress. And some Democrats think it might be a good idea to extend the Bush tax cuts for everyone, at least until the economy has recovered. Rep. Mike Pence, R-Ind., said this one, and we rated his statement False.
"Ninety-four percent of small businesses will face higher taxes under the Democrats' plan."
Republicans often say they're opposed to the tax increases because they will hit small businesses, but the numbers don't really support that. Under the Democratic plan, a small business owner would have to report profits of more than $250,000 before the tax increases kicked in. (Rates would rise for the top two brackets, from 33 percent to 36 percent and from 35 percent to 39.6 percent.) But most small businesses aren't nearly that profitable. In fact, Internal Revenue Service data shows that of all taxpayers who declare business income, only 2 to 3 percent declare that much. We rated this Pants on Fire when Rep. Randy Neugebauer, R-Texas, said this back in August.
Small businesses that have "$250,000 in gross sales for the business ... They're the ones that are looking at massive tax increases."
This is another variation on the claim that tax increases will hit small business. This statement is wrong because gross sales are all the money a business takes in. Under longstanding IRS rules, businesses get to deduct most expenses before reporting their final taxable income. That includes things like employees' pay, supplies, a car or truck, fuel costs, advertising, and more. Rep. Michele Bachmann said this on Nov. 16, and we rated it Pants on Fire.