Colin Powell endorses Obama

[ç i p h é r]

"I'm about to buy a business" (lie)
"Which turns over more than 250k" (lie)
"and will be affected by your tax plans" (lie - unless it NETs more than 250k a year, which it didn't remotely come close to.
"Therefore you plan is bad for small businesses" (lie)

Whatever you want to make of the man who asked the question, that's a pretty solid assessment of how many small business owners feel. Their business is a labor of love, so they naturally feel rather strongly about the implications of such a tax plan. The increase in taxes will have a negative impact on their cash flow at a time when their revenues are already shrinking, and it will exacerbate any liquidity issues that they may be facing as a result of a tightening credit market. If the increased tax burden cannot be absorbed through budget cuts or other cost savings, job cuts will follow.

It's impossible to predict what WILL actually happen but suffice it to say, something will have to give.

[Mayhem]

"I'm about to buy a business" (lie)
"Which turns over more than 250k" (lie)
"and will be affected by your tax plans" (lie - unless it NETs more than 250k a year, which it didn't remotely come close to.
"Therefore you plan is bad for small businesses" (lie)

Whatever you want to make of the man who asked the question, that's a pretty solid assessment of how many small business owners feel. Their business is a labor of love, so they naturally feel rather strongly about the implications of such a tax plan. The increase in taxes will have a negative impact on their cash flow at a time when their revenues are already shrinking.

Anyone whose business will be affected by Obama's tax raise is, by definition, not a small business.

If I was earning a NET of 250,001 USD annually, just enough to get affected by the tax, I would have zero to complain about.

In short, Joe used (and was subsequently used) a lie to try to scare people with a totally non-existant boogeyman, one that Obama slaughtered rather amusingly when McCain brought up his good friend Joe in the debate.

"Zero!"

[Mulu]

The increase in taxes will have a negative impact on their cash flow at a time when their revenues are already shrinking, and it will exacerbate any liquidity issues that they may be facing as a result of a tightening credit market. If the increased tax burden cannot be absorbed through budget cuts or other cost savings, job cuts will follow.

Well, you are assuming it's a tax on gross. It's not. It's a 3% increase, from 36% to 39% last I checked, what they were paying before the Bush tax cut, on profits. It's not the end of the world. It's also easily avoidable by preventing increased profits through expenses, like doing maintenance that has been put off or investing in capital equipment if you are close to the margin, as again it's a tax on net, not gross.

Most small businesses fall under the margin anyway best I can tell. You try searching for the numbers now and it's just a hairball of misinformation, with the variable being how you define "small business." Due to prior tax breaks to "small businesses" we now have large car dealerships and major agri-businesses with multi-millions in receipts claiming to be "small." There's also the "employee" definition issue, since many businesses use independent contractors, like the aforementioned car dealerships and agri-businesses, which is how they satisfy the definition of having only a few employees despite being very large operations. Anyway, here's a decent analysis assuming a 7% hike.

all business expenses are still above-the-line deductible, so that all you are taxed on is the profit. The profit is what you were going to take out of the company anyway. Let me say that again: the profit is the only part you are taxed on, and that is coming out of the company anyway.

It is a huge stretch to say that increasing personal income taxes deprives the corporation of cash. It only deprives the business owner of a (small) part of what is effectively a year-end bonus.

In addition, this proposed increase, though it is about seven percent, is an increase to the top marginal tax rates, which means that the increase is only going to apply to the amount that your annual compensation (salary plus profit left at the end of the year) exceeds $250K. Which means if you clear $260K at the end of the year, the tax increase only applies to the $10K, the amount by which you exceeded the threshhold (7% of 10K is only an additional $700).

This "bad for business" argument drives me up the wall. Nobody is going to let someone go just because the tax on the compensation that they take out of the company goes up a few percent. The people who buy into and repeat this argument have never been in business for themselves.

[Veilan]

What can you expect, most people don't even grasp % properly.

[MorbidKate]

Whats funny is shes a canadian leftist. their worse than the idiots we have here in the US.

Lulz Dan. In actuality I'm a Liberal in Canada and not a supporter of the NDP which is our left leaning party. Here our politics are much different where each party borrows at least some elements of each other’s platform so there is a lot of grey area where a voter could support another party depending on the issue. It's more a matter of degree.

Under Harper the Conservatives have morphed into a right-wing thinking bunch just like the Bush Republicans have (and it cost them in our election) so I guess you could say I'm more in the middle in terms of Canadian politics these days. Glad to see you know me so well

Needless to say our politics are very different here than it is across the border where you’re either Left or Right, Red or Blue, Right or Wrong. And so-called "Independents" inherently lean one way or another. Someone could take a dump on a slice of bread, call it "Republican" and you'd gobble it up no questions just because it contained lettuce and tomato, the fundamentals you require of any decent sandwich

Might I suggest a glass of water to wash down your McCain on white? That comes with dark crust trimmed, naturally.

Kate

[ç i p h é r]

all business expenses are still above-the-line deductible, so that all you are taxed on is the profit. The profit is what you were going to take out of the company anyway. Let me say that again: the profit is the only part you are taxed on, and that is coming out of the company anyway.

Income taxes cannot be written off as expense, and the profits are what's actually income to many small business owners. It depends on how they file and how the company is organized of course, but this is why it's a particular concern for small businesses and not for large corporations. Sole proprietorships are very common in the small business world as are S corporations.

It is a huge stretch to say that increasing personal income taxes deprives the corporation of cash. It only deprives the business owner of a (small) part of what is effectively a year-end bonus.

Not for small businesses, it isn't, particularly when credit markets are tightening and other sources of cash are drying up.

In addition, this proposed increase, though it is about seven percent, is an increase to the top marginal tax rates, which means that the increase is only going to apply to the amount that your annual compensation (salary plus profit left at the end of the year) exceeds $250K. Which means if you clear $260K at the end of the year, the tax increase only applies to the $10K, the amount by which you exceeded the threshhold (7% of 10K is only an additional $700).

Fair point, but this analysis ignores the aggregate effect of these incremental taxes, notably on businesses that rely on other businesses for their income. You get 10 customers cutting back $700, that's a $7,000 drop in income. 100 customers = $70,000. 1,000 customers = $700,000. And so on. That money gets channeled up to the government's tax coffers instead.

It's not the end of the world, but it's a bad idea. It's going to squeeze small business owners (and many middle class Americans too) at a time when the financial markets (and economy in general) are already squeezing them. If BO is going to propose any tax increases, I don't understand why he doesn't put the burden on the lavishly wealthy, which really is where a lot of wealth exists to "spread around", if that's what you're after. It's not the guy making $250k with a business to run, mortgages to pay off, and family to care for that has money burning a hole in his pocket, but rather the guy making $10s of millions in bonus compensation year after year.

[Mulu]

People making 10's of millions typically only pay around 5% tax, if any. They can afford really good tax attorneys and offshore shelters.

Though again your analysis doesn't mesh. If you are personally earning in excess of $250k in take home profits as a small business owner, how does an incremental increase in taxes on your take home profits affect your business? I can see how it might affect your lifestyle and personal consumerism, but it shouldn't have any impact on your business at all. Any money you spend on your business reduces your income, and isn't subject to taxation.

I'm a small business owner. I run a solo law practice. Any money I take out of that practice for personal income is going to be taxed as personal income. If I take out $250k, I get taxed at around 36%. Under Obama's plan, anything I take out over that would get taxed at a higher rate that has yet to actually be set, but it's still money in my pocket. If I couldn't afford to take that money out of my business, then I wouldn't take it out to begin with. I'd leave it in and use it to pay for expenses. Taxes are irrelevant in that decision.

There is no rational relationship between my business expenses and my personal income tax, since I only get taxed on the money I take out of my business after I've already paid its expenses. Raising my taxes would have zero impact on my business, other than perhaps a desire to earn more money to compensate for the increased tax so I could maintain my lifestyle.

All this nonsense about liquidity and credit is a straw man, designed by the right wing to confuse voters who don't understand basic tax and business issues. Obviously it's working, though it's a shame people are fooled so easily by such blatant misinformation. Apparently all you have to do to confuse the unsophisticated is throw in a few words they don't understand like liquidity.

And let's face it, if you can bring home $250k per year, you should be able to manage that income to live a good lifestyle and take care of your family. As long as you don't go crazy and buy a mansion you can't afford or waste your money frivolously, you really should be doing a lot better than say 95% of the population in this country.

This actually comes back to an old issue I raised a few years back about how poor white Republicans all think they are going to be rich someday, so they like policies that favor the rich. The reality is most will stay poor, or at best rise to middle class, and never benefit from those policies. How many US ALFAns do you think would actually be affected by an increase in tax on personal income over $250k? Like most online communities, ALFA is probably ahead of the curve on income. Still, I suspect *none* of the ranting right wingers would, or ever will. Do you honestly think Danubus is going to start bringing home $300k anytime soon? Heck, do you think Joe the Plumber will? Well, given his celebrity he may actually have a shot... but without that his odds of ever breaking out of his current income level given his age were pretty much nil.

Anyway, back on topic....

[ç i p h é r]

All this nonsense about liquidity and credit is a straw man, designed by the right wing to confuse voters who don't understand basic tax and business issues. Obviously it's working, though it's a shame people are fooled so easily by such blatant misinformation. Apparently all you have to do to confuse the unsophisticated is throw in a few words they don't understand like liquidity.

No offense, but you're clearly not a very good businessman if you don't understand the consequences to your business of having less money in your pocket at a time when other sources of investment (banks and investment firms/groups) are shrinking. In fact, your lack of comprehension in this regard coupled with the amount of time you spend on these boards engaged in quote wars makes me question whether you are a business owner at all.

Also, have you forgotten about the housing bubble and the home price appreciation that came with it? People have paid a lot but have not gotten a lot in exchange. And with the depreciation of home prices going on now, it's impossible to simply "trade down" to get out of bad financial situations. There are people at those margins who're stretched financially too. Like I said before, BO should go after the lavish wealth if he's going to go after any wealth at all.

But whatever. It's not like any of this matters one iota. You will still be a Democrat tomorrow, whether I chime in with a few opinions or not. I've said my part on these boards.

[Mulu]

Cipher, anyone who is "stretched" is likely not bringing in $250k a year in profits in the first place, and if they are then they have mismanaged their funds. I thought you were all about personal responsibility?

Realize the tax increase is nothing more than rolling back the prior tax cut. It's not that much money, certainly not enough to dramatically impact a business since it's only profits that are being taxed. If you need a loan to fund your business, how much money in profits are you really going to take out? Even if you have good reasons to borrow rather than invest, it's still your choice as to how much you take out, and if you can afford to take it out in the first place you can afford to pay a few more percent tax on it.

And as I said before, lavish wealth is very hard to target. They have the resources to hide their wealth. Besides rolling back the tax cut will hit lavish wealth somewhat, as would a capital gains tax.

CSM actually did a decent piece on the economic plans presented.

McCain's proposals reflect the traditional Republican emphasis on cutting taxes for businesses and wealthy people in hopes of stimulating investment – "trickle down" economics, as it came to be called during Ronald Reagan's administration. But will proposals of this sort really "stop and reverse the rise of unemployment" and "create millions of new jobs" as McCain has claimed? The historical record suggests not.

President Bush's multitrillion-dollar tax cuts, which were strongly tilted toward the rich, could not prevent (and may even have contributed to) significant job losses. On the other hand, when Bill Clinton raised taxes on affluent people to balance the federal budget (while significantly expanding the Earned Income Tax Credit for working poor people), unemployment declined substantially. Under Clinton's watch, 22 million jobs were created.

Prefer a broader historical comparison? In the past three decades, since the Organization of the Petroleum Exporting Countries oil price shocks of the mid-1970s and the Republican turn toward "supply side" economics, the average unemployment rate under Republican presidents has been 6.7 percent – substantially higher than the 5.5 percent average under Democratic presidents. (The official unemployment rate takes no account of people who have given up looking for work or taken substantial pay cuts to stay in the labor force.) Over an even broader time period, since the late 1940s, unemployment has averaged 4.8 percent under Democratic presidents but 6.3 percent – almost one-third higher – under Republican presidents.

Lower unemployment under Democratic presidents has contributed substantially to the real incomes of middle-class and working poor families. Job losses hurt everyone – not just those without work. In fact, every percentage point of unemployment has the effect of reducing middle-class income growth by about $300 per family per year. And the effects are long term, unlike the temporary boost in income from a stimulus check. Compounded over an eight-year period, a persistent one-point difference in unemployment is worth about $10,000 to a middle-class family. The dollar values are smaller for working poor families, but in relative terms their incomes are even more sensitive to unemployment. In contrast, income growth for affluent people is much more sensitive to inflation, which has been a perennial target of Republican economic policies.

Although McCain portrays Senator Obama as a "job killing" tax-and-spend liberal, the new $60 billion plan Obama unveiled last week also has a tax break as its centerpiece – a tax break specifically tailored to create jobs by offering employers a $3,000 tax credit for each new hire over the next two years. Obama's proposal would also extend unemployment benefits by 13 weeks for those who remain jobless, as well as match McCain's in suspending taxes on unemployment benefits.

Obama's new proposal complements $115 billion in economic stimulus measures he had already announced, including $65 billion in direct rebates to taxpayers and $50 billion to help states jump-start spending on infrastructure projects. All of this is squarely in the tradition of Democratic presidents since John F. Kennedy, who have relied on public spending and tax breaks for working people to stimulate consumption and employment during economic downturns.

These and other policies have produced not only lower unemployment under Democratic presidents but also more economic output and income growth. In fact, over the past 60 years, the real incomes of middle-income families have grown about twice as fast under Democratic presidents as they have under Republican presidents. The partisan difference is even greater for working poor families, whose real incomes have grown six times as fast under Democratic presidents as they have under Republican presidents.

Nuff said.

[Kest]

But whatever. It's not like any of this matters one iota. You will still be a Democrat tomorrow, whether I chime in with a few opinions or not. I've said my part on these boards.

That's why these threads are completely worthless as anything other than a source of humor - everyone is so very opinionated that there is rarely a chance for compromise. They only serve to piss people off.

Threads on politics or religion are almost universally flamebait.

[Kest]

lol

[Burt]

Nader.

[davidcurtisjr]

Jobs!!! 750,000 jobs lost this year. Stick that in your pipe and smoke it.
Now... Who here wants to return to a Grapes of Wrath idealistic lifestyle so representative of the 30's. The only difference being that there are a 100,000,000 more people in the U.S. and percentage wise that's a lot more people out of work, starving, dying of disease and just plain pissed off. If the rich can't see to fixing the mess their greed engendered, they will never escape the consequences. There's an old saying which pretty much sum's it up...
Never sh*t where you eat. The banks and corporations have been feeding off thier employees, investors and customers for some time now. And they just took a huge dump on our tax base. Net effect is there's good news. There's going to be plenty to eat too bad it all tastes like sh*t.

[Mulu]

The proper term is "trickle down economics."

In the last eight years, we the little people have been forced to provide more and more of the taxes fueling America’s redistribution machine. As the Congressional Budget Office reports, the $715 billion in tax breaks that President Bush gave to those making more than $342,000 a year began dramatically shifting the overall tax burden from the rich onto the rest of us. Meanwhile, because of lobbyist-crafted loopholes, most corporations pay zero federal income taxes, according to the Government Accountability Office. The result is what Warren Buffett admits: When counting all taxes (income, payroll, property, etc.), billionaires and Big Business often pay lower effective tax rates than their employees.

The output of the redistribution machine is becoming just as regressive. In the age of Halliburton fraud and ExxonMobil subsidies, our government spends $93 billion a year on corporate welfare. (For comparison, that’s roughly three times what it spends on a traditional welfare program like food stamps.) That doesn’t include the recent bailout giving $700 billion to the same banks currently doling out $70 billion in executive pay and bonuses — a scheme the Financial Times says “amounts to a large transfer of resources from lower to higher income earners.”

Thanks to these redistributive policies — policies McCain championed in Congress — the richest 1 percent today owns a larger share of America’s wealth than at any time since before the Great Depression.

The Republican standard-bearer likely knows all this, but his fetish is fact-free fairy tales — the kind presenting seven houses, a beer-industry fortune and lockstep conservatism as mavericky Joe-the-Plumber populism. When it comes to economics, McCain is banking on Americans believing similarly inane myths — specifically, those portraying obscene affluence as the commonplace achievement under royalist rule.

During the indigence and socioeconomic immobility of the 19th century’s Gilded Age, this meme flourished through Horatio Alger stories. Today, one in five American children live in poverty, and authorities from The Economist magazine to The Wall Street Journal note that our country exhibits the least amount of upward economic mobility in the industrialized world — less than even Europe’s supposedly sclerotic socialisms.

[ç i p h é r]

So address the fraud and fix the loopholes.

My how things have changed in 40 years. Ask not what you can do for your country but what your country can do for you? JFK must be turning in his grave.