Maybe We Should Go Over the Cliff

The writers of this article make a pretty good case for going ahead and diving off the so called "fiscal cliff".  In my opinion, allowing tax rates to be raised on the "rich" without any spending cuts will not help the economy.   One often ignored point that is that many of the "rich" (those making over $250,000 per year) are small business owners.  They own proprietorships,  limited liability companies or Subchapter S corporations, all of which are pass through entities.  That means that the income of the business shows up on the tax return of the owner(s). 

Most business owners I know use about 40% of the profits they make to pay income taxes and plow the rest back into the business.  If tax rates go up on these businesses, that will result in less cash to be invested in growing the business (and more to the government).  In this very fragile economy, that doesn't seem like a good plan for turning things around.