Sen. Obama says the average small business makes less than $250,000 per year. How could that be? That just doesn't sound right.

I have 2 relatives that run construction businesses up in the Poconos. Neither of them earn 250K.

Maybe they're the exception?

Do you think the dry cleaner you go to clears more than $250K a year? Or the coffee shop? Most small businesses aren't car dealerships and tech firms.

I agree. I don't know either. It just seems low when you consider doctors, dentitsts, bodegas, liquor stores, small law firms, lumber yards, and a lot of other mom and pop operations that just seem to be doing pretty well. I guess this is one for the fact checkers.

There is a difference between gross income and net income. A lumber yard may bill millions a year, but the owner may clear $100K of that for himself. Same would hold true for liquor stores and restaurants. As for doctors, they simply don't make the kind of money they used to because of managed care and Medicare.

Yep. Could be that the bottom line is less than $250K especially for younger businesses. Accounting practices probably help here also when it comes to gross vs net. At the end of the year the owner's salary is going to come out of the bottom line too. Businesses are going to have more a lot more latitude here than salaried professionals. I imagine there are accountants here on FU and they would know better than I. It just struck me odd.

I don't even get why this matters. Republicans like to bring up this "small business" thing so that they create the image of small mom and pop businesses being hurt by tax increases. The fact is, if you are making 250k--and we're talking profit here--you are doing pretty well whether you are a small business owner or a salaried employee. The notion that someone making a healthy profit will start laying people off if they have to pay a little more in taxes is just silly. You lay people off when you *aren't* making a profit.

Personally, I'd like taxes to be as low as possible but I don't support doing that until you've gotten the government back on a path of fiscal responsibility. Cut spending first, then lower taxes once you've gotten the budget back to balance.

Speaking of taxes, the release of the Palin's tax returns should put a few other typical Republican canards to rest too. We hear again and again that capital gains taxes and taxes on dividends are so harmful to average tax payers. The Palin's are hardly average--they make substantially more than most taxpayers and have much higher than average net worth. Take a look at what they pay in taxes on capital gains and dividends. As I recall, they had a capital gain of a couple of thousand dollars and taxable dividends of about $250. Almost nothing. And look at what they're effective tax rate turned out to be--somewhere around 15%. Hardly the punitive levels that right wing alarmists are always screaming about.

My coffee hasnt kicked in yet - but my calculations - the numbers are about 2% of the households have an income of more than $250,000 and the average of that groups income is well over the $250,000 threshhold.

Flame away.

http://pubdb3.census.gov/macro/032008/hhinc/new06_000.htm

Look at it this way. Say you are making $250K a year. Say your annual tax payment is $87,500. Your taxes get raised a couple of percentage points to $92,500. You mean to tell me you are going to start laying off people over $5K?

It all depends on what you are talking about. I have a small business, with 7 employees, that makes a gross income above $700000. My overhead alone is above $250000. My salary after expenses/overhead is less than $250,000. If Obama is talking about small business income he will tax my company but not my personal income. By taxing my company I will have to decrease spending and probably let one of my employees go.

See, this is exactly the type of confusion Republicans are trying to plant in people's minds. He ISN'T talking about taxing small businesses--he is talking about taxing *individuals* who make more than 250k. What your business grosses is irrelevant. If your business grosses 700k and your profit is less than 250k your taxes won't increase.


SmallBusinessOwner Wrote:
-------------------------------------------------------
> It all depends on what you are talking about. I
> have a small business, with 7 employees, that
> makes a gross income above $700000. My overhead
> alone is above $250000. My salary after
> expenses/overhead is less than $250,000. If Obama
> is talking about small business income he will tax
> my company but not my personal income. By taxing
> my company I will have to decrease spending and
> probably let one of my employees go.

SmallBusinessOwner Wrote:
>> If Obama is talking about small business income


FYI, that isn't what Obama is talking about.

Voter Wrote:
-------------------------------------------------------
> See, this is exactly the type of confusion
> Republicans are trying to plant in people's minds.
> He ISN'T talking about taxing small
> businesses--he is talking about taxing
> *individuals* who make more than 250k. What your
> business grosses is irrelevant. If your business
> grosses 700k and your profit is less than 250k
> your taxes won't increase.


Many small businesses file taxes as individuals so that they do not have to pay taxes twice. For tax purposes, the small business is treated as an *individual*

SmallBusinessOwner Wrote:
-------------------------------------------------------
> It all depends on what you are talking about. I
> have a small business, with 7 employees, that
> makes a gross income above $700000. My overhead
> alone is above $250000. My salary after
> expenses/overhead is less than $250,000. If Obama
> is talking about small business income he will tax
> my company but not my personal income. By taxing
> my company I will have to decrease spending and
> probably let one of my employees go.


Who does your taxes? Your small business should be a pass-through entity (you would file a K-1). The only thing you should be paying Federal taxes on are your income and the income of your employees. You may pay local taxes on your gross receipts, but that has nothing to do with what Obama is proposing at the Federal level.

Thanks for trying to clarrify that for me. I am actually an indipendent. This morning I was trying to research what the Obama plan actually means for my small business and came upon your forum. On yesterdays debate the distinction between the small business owner's income and the company's gross income was not made. Thanks again.

According to a 2006 survey done by salary.com the natioanl average income for small business owners is $258,400.

http://www.salary.com/aboutus/layoutscripts/abtl_default.asp?tab=abt&cat=cat012&ser=ser041∂=Par545

That doesn't change my point. Whether we are talking about a business filing as an individual or an actual individual, Obama's plan excludes anyone making less than 250k. The 250k refers to taxable income, not gross profit.


Individual Wrote:
>
> Many small businesses file taxes as individuals so
> that they do not have to pay taxes twice. For tax
> purposes, the small business is treated as an
> *individual*

First of all the majority of small businesses fail or lose money so that annual number maybe skewed.

The small business owners I know make between $50,000 and $200,000. Now their companies may gross $700,000-$5 million, but after paying expenses, interest, health care, benefits, taxes and salaries not much is left over.

Taxes is what really kills the profit and they work with accountants to try and get all the advantages they can, such as a business lunch paid for, travel expenses paid because they combine a vacation with a business trip etc. So they do get some added perks along with having flexible hours. In general the ones that make the big money work 14 hour days and are always on the phone doing business.

The smart business owners try to save as much as possible any place they can so they can have reserves for bad years. The problem is that so many Walmart type businesses can easily get capital and wipe them out.

I know one owner who was making good money until an interestion was changed, with in two weeks his business dropped 65% and stayed that way.

Voter wrote

Quote

Obama's plan excludes anyone making less than 250k. The 250k refers to taxable income, not gross profit.

Which would actually make it worse. If he just taxed you on profit (the 250K threshold) it would be easier to understand. All businesses will report gross and net income, after taking deductions for business expenses and other allowable expenses, you end up reporting Net, and then Profit. So by your own statement then they would be MORE eligible to be taxed. Net income <> profit.

As an individual acting as a business (many contractors in the DC area do this), the majority will not make $250K easily. But as any kind of small business or franchise owner, the business will make $250K easily. Then you are taxed on salaries for your employees as well as your own. So pretty much any business with more than 2 or 3 employees would fall into this bracket.



Edited 2 time(s). Last edit at 10/08/2008 11:45AM by Registered Voter.

Foolishness. Obama wants to tax THE BUSINESS ITSELF not the owners. That will destroy the economy. Check out this Gov SBA website which indicates how important small businesses are--and, I might add, the less than 2 thirds last more than 7 years. Taxing them will be an economic disaster. We are not talking about business owners--but businesses themselves.

WashingToneLocian Wrote:
-------------------------------------------------------
> There is a difference between gross income and net
> income. A lumber yard may bill millions a year,
> but the owner may clear $100K of that for himself.
> Same would hold true for liquor stores and
> restaurants. As for doctors, they simply don't
> make the kind of money they used to because of
> managed care and Medicare.

http://www.sba.gov/advo/stats/sbfaq.pdf

Obama's plan is still far better than McCain's and Bush.

MisterGopher Wrote:
-------------------------------------------------------
> According to a 2006 survey done by salary.com the
> natioanl average income for small business owners
> is $258,400.
>
> http://www.salary.com/aboutus/layoutscripts/abtl_d
> efault.asp?tab=abt&cat=cat012&ser=ser041∂=Par5
> 45

"Average" isn't "most." Median income would be more indicative.

Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/12/AR2008081202849.html?nav=rss_opinion/columns

Quote

According to the latest Internal Revenue Service data, $706 billion of pass-through business income was reported in 2006. Of this, two-thirds was earned in households making more than $250,000 -- households on which Obama has said he will raise taxes.

If raising the tax rate on two-thirds of small-business income isn't a tax hike on small business, what is?

The tax rate on two-thirds of small-business income would skyrocket under the Obama plan. The current tax rate on this income is 37.9 percent. The Obama plan, thanks to uncapping the Social Security tax base, would shoot this small-business rate all the way up to a Carter-level 54.9 percent.

Politico on Obama's Tax Plan:
http://www.politico.com/news/stories/0708/11670.html

Quote

...
Under Obama’s plan to let the scheduled 2011 tax rate hikes occur, and his plan to raise the self-employment tax on those making more than $250,000, the S corporation rate would rise from 35 percent to 39.6 percent. The sole proprietor and partner rate would rise from 37.9 percent all the way up to a staggering 50.3 percent. Many Democrats in Congress have proposed making all small businesses (including S corporations) pay this 50-plus percent rate. A small business tax rate that high would be the highest marginal rate faced by them in nearly a quarter-century.

...

What’s the alternative? One place to look is the optional alternate tax system originally proposed by Congressman Paul Ryan (R-Wis.) and now endorsed by McCain. It would give households (including those with small business income) a choice between the current tax code and one with a top rate of 25 percent on all income over $100,000. This would have the beneficial effect of lowering the tax rate on most small-business income by 10 percentage points. Small businesses haven’t faced a tax rate that low in quite some time and would be likely to respond with the creation of new businesses and more investment in existing businesses.

The McCain small business tax plan doesn’t end there. For those businesses that are organized as conventional corporations, the top tax rate would fall from 35 percent to 25 percent, the European average. For all businesses, technology and equipment — which now must be slowly “depreciated” over many years — would be immediately expensed in year one.

Stepping back, voters and policymakers should ask themselves whether they want two-thirds of small business income taxed at a 50 percent tax rate or if they want nearly all small-business income taxed at a 25 percent tax rate. They should ask themselves whether it’s healthier for small businesses to write off a computer over six calendar years or to simply write it off in year one. To America’s small business sector, the answer is obvious.

Registered Voter Wrote:
-------------------------------------------------------
> Voter wrote
>
> Obama's plan excludes anyone making less than
> 250k. The 250k refers to taxable income, not gross
> profit.
>
>
>
> Which would actually make it worse. If he just
> taxed you on profit (the 250K threshold) it would
> be easier to understand. All businesses will
> report gross and net income, after taking
> deductions for business expenses and other
> allowable expenses, you end up reporting Net, and
> then Profit. So by your own statement then they
> would be MORE eligible to be taxed. Net income <>
> profit.
>
> As an individual acting as a business (many
> contractors in the DC area do this), the majority
> will not make $250K easily. But as any kind of
> small business or franchise owner, the business
> will make $250K easily. Then you are taxed on
> salaries for your employees as well as your own.
> So pretty much any business with more than 2 or 3
> employees would fall into this bracket.

Employee withholding taxes count against the employee's income, not the business owner's.

I have a small business. I have employees. I pay taxes on what I make, not what my employees make.

You clearly don't understand how this works. You are NOT taxed on your employees salaries. Those are part of your operating expenses and deducted from gross profit.


Registered Voter Wrote:
> will make $250K easily. Then you are taxed on
> salaries for your employees as well as your own.
> So pretty much any business with more than 2 or 3
> employees would fall into this bracket.

You know, the whole argument about this in the short term in laughable. Lets all go back to Bill Clinton, who ran on the message of cutting taxes. Within 2 years he raised taxes on everyone.

George Bush Sr got in trouble with his "read my lips" statement, because the Democratically controlled Congress forced him to raise taxes within 2 years of his coming into office.

So all of this aside, McCain is the only one who really has a track record of fighting big ticket items in Congress. Not just earmarks, but stupid contracts and projects. I have yet to see Democrats ever cut a government program other than Defense spending. So, I think that should set the stage for what will happen under Obama.

And just getting us out of Iraq won't help, since we still have to send more troops to Afghanistan. So the $10B a month he likes to throw out about Iraq isn't going to end anytime soon since that money will be redirected. So I guess he is going to make cuts in a few other places to make that happen - and it will most likely all come out of defense spending since he seems to want to fund every other project on his agenda full speed ahead.

Voter Wrote:
-------------------------------------------------------
> You clearly don't understand how this works. You
> are NOT taxed on your employees salaries. Those
> are part of your operating expenses and deducted
> from gross profit.
>
>
> Registered Voter Wrote:
> > will make $250K easily. Then you are taxed on
> > salaries for your employees as well as your
> own.
> > So pretty much any business with more than 2 or
> 3
> > employees would fall into this bracket.

Essentially you are paying taxes on your employees salary when you pay them - they deal with part of the taxes later when they file personal income tax returns. So sure, your bottom line gets reduced, but you are contributing to Soc Sec and the rest for these folks. I understand it quite well thanks.

From your comment earlier:

Quote

I don't even get why this matters. Republicans like to bring up this "small business" thing so that they create the image of small mom and pop businesses being hurt by tax increases. The fact is, if you are making 250k--and we're talking profit here-

]

I am sure the people making the money as their salary (the owners) don't believe the $250K they are paying themselves is "profit" from their business. So not sure where you got that from.

It all depends on the type of business structure you have and it's too complicated to explain in detail here. As one simple example though, Sole Propietorships don't pay their owners salary. The business profit is the owner's salary. No profit, no salary. If the business sells 700k in product that's called gross sales, or revenue. If the business paid 400k for the cost of goods that is subtracted from the 700k and the 300k left over is called gross profit. Then you subtract out your operating costs such as rent, utilities, advertising, and employee (not your own) salaries. You are left with your net operating profit or loss. That is the amount you pay tax on. Corporations are different but the same principles apply.

BTW, how do you like that new program that McCain--that guy with the proven track record of fighting big ticket items--proposed last night? You know, the $300 billion dollar program that buys up everybody's bad mortgages? Ah, more big government Republicanism!


Registered Voter Wrote:
>
> I am sure the people making the money as their
> salary (the owners) don't believe the $250K they
> are paying themselves is "profit" from their
> business. So not sure where you got that from.

We're not talking about payroll taxes here--we're talking about income taxes. Your employees are paying their own income taxes--you don't pay that you merely withhold it from their checks and forward it to the government. You pay half of their SS and Medicare but that isn't changing unless your employee makes more than 250k a year.


Registered Voter Wrote:
> Essentially you are paying taxes on your employees
> salary when you pay them - they deal with part of
> the taxes later when they file personal income tax
> returns. So sure, your bottom line gets reduced,
> but you are contributing to Soc Sec and the rest
> for these folks. I understand it quite well
> thanks.

Regarding the $300B thing...

If the economy is going south, and it looks like housing prices are going to tank, this may be one way to stave off the mess, and help "the little guy" as opposed to Corporations that already profited off the mortgages in the first place. The bill they just passed has some provision for that in place already.

But I think you, and everyone else here understands that if the housing values totally tank in value that would pretty much blow up the entire economy. That would be the roll down to the "depression" that everyone fears. The Treasury needs to get out and buy up the "bad paper" quickly, so as to help start alleviating the asset/liability issue banks are seeing that is stopping them from lending. Maybe all this new off market lending and such will help also. It is really a catch 22 - the housing values are dropping due to over building and lack of demand combined, you have foreclosures adding to the inventory glut, and it just makes it that much harder to value what is out there now. Having the Treasury step in and take ownership of the properties is great, but still may not deal with the value problem. So by having them take ownership of a bad loan, and essentially wiping out part of the owner's principle is probably a better answer than just having the owner walk away which is happening in most of these cases right now. Certainly though it should only be extended to primary residences, and it should all be documented and reviewed to ensure no one abuses this. So sure, some homeowners with large mortgages may get a windfall, but that is probably better in the long run than having even more houses come on the market.

That proposal is probably one of the better ideas in this mess right now.



Edited 1 time(s). Last edit at 10/08/2008 01:48PM by Registered Voter.

RV-

Regarding the 2/3rds of business owners who receive $250K from their S-Corp pass-through, that still doesn't take into consideration their adjusted income. For instance, say they make $261K. They will still deduct for their mortgage interest, their kids, their part of their 401K contribution, etc, etc. Once you factor those things in, the taxable income could easily be well under $200K.

As for the payroll taxes, Voter explained it to you. I hope you get it now.

I got it before. Again, I get all the tax issues, I have been a contractor in this area for years and had to file as my own business during that time. Making a bigger issue out of my not stating the issue to your satisfaction doesn't mean I misunderstood it.

Adjusted income is all good and well - sure they will deduct as much a they can.

Quote

$706 billion of pass-through business income was reported in 2006. Of this, two-thirds was earned in households making more than $250,000

Nothing in this statement indicates before or after adjustments. This part of the Obama tax plan though"

Quote

Under Obama’s plan to let the scheduled 2011 tax rate hikes occur, and his plan to raise the self-employment tax on those making more than $250,000, the S corporation rate would rise from 35 percent to 39.6 percent. The sole proprietor and partner rate would rise from 37.9 percent all the way up to a staggering 50.3 percent. Many Democrats in Congress have proposed making all small businesses (including S corporations) pay this 50-plus percent rate. A small business tax rate that high would be the highest marginal rate faced by them in nearly a quarter-century

And also his point about "closing corporate loopholes" - sounds like many of the deductions these folks currently have will also go away.

You know, Obama won't write these tax laws, Nancy Pelosi and Harry Reid will. I am more inclined to believe that she will have a lot more influence on shaping the version of this that makes it to the final cut than Obama will.

In any case, unless he can somehow figure out how to CUT SPENDING, it isn't going to matter much. The entitlement programs alone are growing faster than he can ever hope to cut spending - even in defense alone. So at some point he will have to shit or get off the pot so to speak. My guess is you will start hearing tax hikes on all of us in short order if he is elected. Once he senses there is any sort of stability to the financial system it will become a high priority item.



Edited 1 time(s). Last edit at 10/08/2008 02:16PM by Registered Voter.

http://www.salary.com/aboutus/layoutscripts/abtl_default.asp?tab=abt&cat=cat012&ser=ser041∂=Par545

I think the salary.com article is pretty cut and dry. If those small business CEOs take a hit, that means their employees will be taking a hit as well. People don't run businesses for the fun of it. If there is less money for the owner, they will cut pay and fire people. It also looks as though certain cities/states will be worse off than others when the Obama tax plan takes effect. Good luck to everyone in those areas. Small businesses are more important than most people realize. Just because you aren't the owner paying the taxes doesn't mean you won't feel the impact.

RV-

Jesus. You are quoting Grover Norquist! Norquist is a die-hard Republican operative. Of course he is going to say that the Dems will put a 50% tax on small business owners. There is no way in Hell the Dems are going to do that! It would be political suicide.

As for the net income, the S-Corp pass-through is $250K. That's basically the gross amount that comes to the individual before he or she claims their individual deductions. The tax tables work on adjusted income, not on gross income! You don't "get it" like you claim.

Abbie Wrote:
-------------------------------------------------------
> I think the salary.com article is pretty cut and
> dry. If those small business CEOs take a hit, that
> means their employees will be taking a hit as
> well. People don't run businesses for the fun of
> it. If there is less money for the owner, they
> will cut pay and fire people. It also looks as
> though certain cities/states will be worse off
> than others when the Obama tax plan takes effect.
> Good luck to everyone in those areas. Small
> businesses are more important than most people
> realize. Just because you aren't the owner paying
> the taxes doesn't mean you won't feel the impact.


The median compensation is below $300K. MOST small business owners will not be impacted by the tax hike.

Abbie Wrote:
-------------------------------------------------------
> I think the salary.com article is pretty cut and
> dry.

I would trust the numbers from the census more. How many households did the salary.com survey? Census claims in excess of 116 million - give or take.

WashingToneLocian Wrote:
-------------------------------------------------------
> RV-
>
> Jesus. You are quoting Grover Norquist! Norquist
> is a die-hard Republican operative. Of course he
> is going to say that the Dems will put a 50% tax
> on small business owners. There is no way in Hell
> the Dems are going to do that! It would be
> political suicide.
>
> As for the net income, the S-Corp pass-through is
> $250K. That's basically the gross amount that
> comes to the individual before he or she claims
> their individual deductions. The tax tables work
> on adjusted income, not on gross income! You don't
> "get it" like you claim.


All he ever does is cut and paste republikan propaganda.

It looks like the Salary.com data came from self-selecting members of various associations. It isn't truly random. Think about it this way. If your business made no money, would you readily volunteer that? Nope. Not very scientific.

Vince(1) Wrote:
-------------------------------------------------------

>
>
> All he ever does is cut and paste republikan
> propaganda.


That's all they ever do.

WashingToneLocian Wrote:
-------------------------------------------------------
> RV-
>
> Jesus. You are quoting Grover Norquist! Norquist
> is a die-hard Republican operative. Of course he
> is going to say that the Dems will put a 50% tax
> on small business owners. There is no way in Hell
> the Dems are going to do that! It would be
> political suicide.
>

Right. And the Republicans weren't going to spend like drunken sailors when they managed to get control of Congress and the Whitehouse. Regarding the (non) tax increase you think is going to happen - in 2 years when they DO increase the taxes for everyone else - per their previously demonstrated history - are you going to be cheering then? Do you think Obama (if elected) would fight Nancy Pelosi on her version of a tax plan? If they aren't going to allow oil companies to drill anywhere that we actually have decent oil reserves, how is this tax on windfall profits supposed to work - especially with the decrease in oil prices due to the economic slump? I thought Obama had proposed a $1000 rebate, paid for by taxing the oil companies for the money to pay for it.

Vince.. you again? All you ever do is cry. Hey you missed a spot, the tin foil is slipping out from under your toupee.

What happened to the surplus the Democratics created before the Bush administration?

The one that was paid for by cutting defense spending you mean? The one that was already on the way out due to a recession starting before 9/11 (remember the original tax cut plans) and then after 9/11 a loss of millions of jobs and such?

Defense spending. That is it. This is obviously a good time to reduce defense spending - right?

RV (aka Recreational Vehicle) - All I ever hear out of your mouth is a noun, a verb and 9/11. Let's move on. It's not like we're at imminent risk of being invaded by a group or country of any significance. You must be waiting for the martains to attack. Please put down the Atari 2600 Space Invaders game and walk away.

That is because when Obama says 'earns or makes' what he means is revenue, not profit. Before any costs are deducted.

SmallBusinessOwner Wrote:
-------------------------------------------------------
> It all depends on what you are talking about. I
> have a small business, with 7 employees, that
> makes a gross income above $700000. My overhead
> alone is above $250000. My salary after
> expenses/overhead is less than $250,000. If Obama
> is talking about small business income he will tax
> my company but not my personal income. By taxing
> my company I will have to decrease spending and
> probably let one of my employees go.


You need a better accountant.

First of all, if you are paying yourself less than $250,000 and leaving actual profit in your company and not sheltering it in a way that you can use to grow your company, the government should take ALL of that money from you because you are wasting it. But seriously, if you've got $300,000 or so in profit that isn't considered your salary, then I'm sure you can still grow your business just as well paying 30% versus 25%

You have 7 employees, are you paying them less than $20,000 a year? Or did you forget to include payroll in your overhead? Social Security? all the etc etc expenses of employing people?

I know people in this area who have gross revenues over a million, but they have taxable incomes of less than $200,000. One owns several rental properties in DC, a private plane and a 911 Carrera S. I probably end up paying more in taxes as a salaried employee than these people pay for owning a business that offers them a plethora of tax breaks and write-offs.

Did you know you get an amazing write off for your business with an SUV (or any vehicle over a certain weight)?

All of your major expenses should be business expenses, that way you can whittle down your business's taxable income, as another example.

MidWest Wrote:
-------------------------------------------------------
> That is because when Obama says 'earns or makes'
> what he means is revenue, not profit. Before any
> costs are deducted.


Umm, no, he doesn't.

He's talking about a family business where they can take more than $250,000 for their personal use, or in other words, their income, not what the company takes in through sales before paying suppliers, employees, leases, advertising, etc.

To even believe that stuff proves ignorance of how your boss runs his plumbing company.

It's all about net income. There are plenty of ways for small business owners to get their net income down after business expenses. For instance, they can use a SEP IRA or Keogh 401K and knock down their taxable income by tens of thousands of dollars. Joe the Plumber needs to hire a CPA instead of bitching about socialism.

WashingToneLocian Wrote:
-------------------------------------------------------
> It's all about net income. There are plenty of
> ways for small business owners to get their net
> income down after business expenses. For instance,
> they can use a SEP IRA or Keogh 401K and knock
> down their taxable income by tens of thousands of
> dollars. Joe the Plumber needs to hire a CPA
> instead of bitching about socialism.


A small business can offer a defined benefit plan to their principals and emplyees for instance. It would have to pass the 401(A)(4) test to make sure the big guys are being "equitable" in regard to their employees.

For instance, a doctors office. The two doctors make $400,000 per year or more and the average salary of their staff is about $45,000. So you would do the out of control calculation and show that the benefit for the 30 year old office workers is the same over time as the two doctors.

So with "older" doctors and a younger staff, the docs can make a few thousand dollars contribution to their staffs retirement plan and then come close to maxing out the doctors defined benefit plan. The total tax defered contribution the docs could make to their own retirement account? The 2008 max tax defered contribution would be $185,000 each. Again, TAX DEFERED.

Yes, there are drawbacks, but not many.

Small businesses are often sole proprietor or S-Corp. The business income and the owner's income are one and the same and are not serperated for tax purposes.

Since that is the case, 0bama's plan will raise taxes on the individual who owns a small business.

Voter Wrote:
-------------------------------------------------------
> See, this is exactly the type of confusion
> Republicans are trying to plant in people's minds.
> He ISN'T talking about taxing small
> businesses--he is talking about taxing
> *individuals* who make more than 250k. What your
> business grosses is irrelevant. If your business
> grosses 700k and your profit is less than 250k
> your taxes won't increase.
>
>
> SmallBusinessOwner Wrote:
> --------------------------------------------------
> -----
> > It all depends on what you are talking about.
> I
> > have a small business, with 7 employees, that
> > makes a gross income above $700000. My
> overhead
> > alone is above $250000. My salary after
> > expenses/overhead is less than $250,000. If
> Obama
> > is talking about small business income he will
> tax
> > my company but not my personal income. By
> taxing
> > my company I will have to decrease spending and
> > probably let one of my employees go.

> > my company I will have to decrease spending and
> > probably let one of my employees go

How much does your employee make?

Lets say he/she makes minimum wage. $6.65 an hour and you DONT pay benefits.

Ok ... Min wage X 40 hours X 50 weeks (since you dont pay vacation) = $13,300 per year.

and let us say you come in at exactyly $250,000 per year. Then in order for you to be forced to lay off your minimum wage emplyee, you believe that Obama's tax increase would be an additional 5.3% of your TOTAL income above what you are paying now. 5.3% of your total income in addition to what you are paying now!

Yeah right! You are living in a fantasy world.

Radiophile Wrote:
-------------------------------------------------------
> How much does your employee make?
>
> Lets say he/she makes minimum wage. $6.65 an hour
> and you DONT pay benefits.
>
> Ok ... Min wage X 40 hours X 50 weeks (since you
> dont pay vacation) = $13,300 per year.
>
> and let us say you come in at exactyly $250,000
> per year. Then in order for you to be forced to
> lay off your minimum wage emplyee, you believe
> that Obama's tax increase would be an additional
> 5.3% of your TOTAL income above what you are
> paying now. 5.3% of your total income in addition
> to what you are paying now!
>
> Yeah right! You are living in a fantasy world.


He's not living in a fantasy world, he's living in the nightmare world of buying into the fearmongering of media like Fox News and Weekly Standard, et al.

The sad thing is that if he really does own his own business and isn't paying a good accountant or money manager to advise him, he deserves to lose money and buy into the fear that the "other" candidate is going to suddenly cause him to lose money.

There's a bunch of exceptional people in this area who have been working with small businesses and high net-worth families for several decades. David Kasir and Mike Kazimi come to mind. (not sure if I spelled either of their names right, but if you ask around, people know who they are.)

Obama's plan deals with the "gross" income of businesses...........I think its fair to say that the vast majority of small business match or exceed this guideline.

There is actually another problem with this scenario. Rational employers hire people because they make a contribution to the bottom line in one way or another. Unless you are employing people out of charity, laying them off will cause your company to be less profitable. In fact, the only rational reason for hiring a worker is that you believe their marginal product of labor will be higher than the cost of hiring them. That is, they will produce more than you pay them. The idea that companies will purposely become less profitable in order to avoid paying taxes makes no sense.


Radiophile Wrote:
-------------------------------------------------------
> > > my company I will have to decrease spending
> and
> > > probably let one of my employees go
>
> How much does your employee make?
>
> Lets say he/she makes minimum wage. $6.65 an hour
> and you DONT pay benefits.
>
> Ok ... Min wage X 40 hours X 50 weeks (since you
> dont pay vacation) = $13,300 per year.
>
> and let us say you come in at exactyly $250,000
> per year. Then in order for you to be forced to
> lay off your minimum wage emplyee, you believe
> that Obama's tax increase would be an additional
> 5.3% of your TOTAL income above what you are
> paying now. 5.3% of your total income in addition
> to what you are paying now!
>
> Yeah right! You are living in a fantasy world.

Obama's plan DOES NOT deal with "gross" income. Please get your facts straight.

Informed Wrote:
-------------------------------------------------------
> Obama's plan deals with the "gross" income of
> businesses...........I think its fair to say that
> the vast majority of small business match or
> exceed this guideline.

As a person who owns a business, I can tell you that you are taxed on your net income, not your gross income (at least at the Federal level). Most small business owners pay themselves with the profits. Considering that most businesses have profit margins that range from 2 to 15 percent, you would have to make a substantial amount of gross revenue to net $250K after all your deductions, etc. I don't believe the average dry cleaner, restaurant or plumber makes gross revenues in the area of several million dollars a year.

As Maria Cardona stated on Fox news it is 250k gross income not net

Check it out yourself http://www.youtube.com/watch?v=I13jDMAdxNo now that you have the facts "voter"

You can't be serious. First of all, I watched the video you linked to, and I don't see anything in there backing up an assertion that the Obama tax plan refers to gross not net income. Secondly, really, some opinion segment on Fox News? Fortunately, we don't have to rely on this kind of nonsense--it's all spelled out in really quite clear terms. Get educated.

buddy Wrote:
-------------------------------------------------------
> Check it out yourself
> http://www.youtube.com/watch?v=I13jDMAdxNo now
> that you have the facts "voter"

buddy Wrote:
-------------------------------------------------------
> As Maria Cardona stated on Fox news it is 250k
> gross income not net


Thank god a news channel talking head who gets her paycheck from the australian guy who owns london and new york tabloids said it. Now I can believe it!

I also read on one of Rupert's tabloid paper's websites that they found a world war two bomber on the moon, and that Brown is dating Berlusconi on the down-low, and that putin and sarkozy are pissed because they were promised by Tony Blair to be fixed up with Gordon Brown.

buddy Wrote:
-------------------------------------------------------
> As Maria Cardona stated on Fox news it is 250k
> gross income not net


It's adjusted gross income. Just like you pay on your personal income taxes. It is still the same thing as net income.

buddy Wrote:
-------------------------------------------------------
> Check it out yourself
> http://www.youtube.com/watch?v=I13jDMAdxNo now
> that you have the facts "voter"

The gal misspoke. I have looked at the plan and it reference "adjusted gross income." That is the net income you claim on your personal taxes. It is not gross revenues.

I had trouble watching the video the first time but when I saw the full video I also concluded that she had misspoke and probably meant to say "adjusted gross income" and not just "gross". The Obama plan has always referred to individuals but McCain has tried to muddy the waters by pointing out that lots of small business pay income tax as individuals and therefore Obama would be increasing taxes on small business. So people without a lot of understanding of how businesses are taxed have gotten pretty confused. Anybody that needs further convincing that the plan refers to AGI can read the answer in the Wall Street Journal, which should be a definitive enough source:

http://online.wsj.com/article/SB122134302504832663.html


Q: Two advisers to Sen. Obama recently wrote that the Obama tax plan "would not raise any taxes on couples making less than $250,000 a year, nor on any single person with income under $200,000 -- not income taxes, capital gains taxes, dividend or payroll taxes." What did they mean by "making"? Is "making" considered total income or AGI?

—R.C., Denver
A: Jason Furman, Sen. Obama's economic policy director, replies that "making" refers to adjusted gross income.

Adjusted gross income, or AGI, is what's left after taking your total income and then making various "adjustments," such as deductions for moving expenses, individual retirement accounts, student loan interest, self-employed health insurance payments and numerous other items.

However, adjusted gross income is before you claim either the standard deduction or itemized deductions.

If you filed Form 1040 last year, your total income appeared on line 22, and adjusted gross income appeared on line 37.

* * *

Joe the Plumber needs to hire a good attorney first because it appears he's been practicing plumbing without a license for years.

Once he gets done paying all the plumbing fines then he can start worrying about being rich and getting a loan for his plumbing business.

I also suggest he registers to vote.

We're talking about successful small businesses making over $200,000 right? *LOL* 1 out of 10 that make it?

It's a shame that McCain had to ruin "Joe the Plumbers" life. Next time McCain should check to see if "the plumber" has a plumbing license. Apparently Joe the plumber has been practicing plumbing for years with out a license.

It would also be nice if Joe the plumber registers to vote properly.

McCain campaign transition = Hockey Mom => Joe Six Pack => Joe the Plumber

Joe the Plumber's whole premise in confronting Obama is because he doesn't like how politicians aren't truthful. This coming from a guy who a) lied about buying a business, b) lied about the revenue of that business, c) lied about being "undecided" in who is going to vote for, d) lied about his income, e) evaded taxes, f) skipped out on a hospital bill, g) didn't pay traffic fines in Arizona (bench warrant?) h) is rumored to have hit his wife in front of his kid.

Yet, McCain and the Republicans want to claim Joe the Plumber represents America. I don't know about you, but I have never evaded taxes, skipped out on bills or tickets and I certainly never hit my wife. I have a feeling most Americans have never done those things either.

I think it's funny how we're less than 3 weeks from an important election, and the McCain campaign are busy defending some dipshit from Toledo.

I'm convinced the Republicans have collectively lost their minds. They still don't seem to understand exactly why it is that the country are so dissatified with them and can still manage to convince themselves that up is down and left is right. The right-wing spin on "Joe the Plumber" now is that he is being visciously attacked by the liberal media because he dared to ask a politician a question. Just like Palin was visciously attacked by the liberal media because they didn't like a pro-choice woman. The problem with this analysis is that it is simply wrong. "Joe the Plumber" has not been attacked, he has been exposed. Exposed as someone who wasn't who he said he was and so couldn't be the symbol the right wants him to be. In today's Washington Time's Michael Barone writes:

Mr. Wurzelbacher is the man who, in a moment caught on YouTube, confronts Barack Obama on his plan to raise taxes on people like him. Mr. Obama, sotto voce, replies that he wants to "spread the wealth around." In the third consecutive week in which the headlines of the financial crisis have prompted both candidates to denounce "Wall Street greed," the image of those whom Mr. Obama would tax higher was suddenly not an investment banker but a plumber.

Even today, people are still trying to make the case that Obama's plans hurt Joe, when in fact they help him. Up is down, right is left. Fortunately, the media are much more diversified than they were just four years ago and they can't get away with it the way they used to.

TheMeeper Wrote:
-------------------------------------------------------
> I think it's funny how we're less than 3 weeks
> from an important election, and the McCain
> campaign are busy defending some dipshit from
> Toledo.

I think it's even more funny that we are less than 3 weeks from an election and the Obama campaign and surrogates are trying to destroy some dipshit from Ohio because he asked a question they didn't like.

If the price of change is that you can't ask a question of a politician, regardless of your economic circumstance, or who you are in life, then there is obviously something wrong with the folks putting out this "change" message.

Obviously they felt the threat from the question was pretty serious if they were willing to go to such lengths to destroy this guy.

Amazing how you all choose to ignore the "big brother" aspect to this.

It's like talking to a wall...


Registered Voter Wrote:
>
> I think it's even more funny that we are less than
> 3 weeks from an election and the Obama campaign
> and surrogates are trying to destroy some dipshit
> from Ohio because he asked a question they didn't
> like.
>
> If the price of change is that you can't ask a
> question of a politician, regardless of your
> economic circumstance, or who you are in life,
> then there is obviously something wrong with the
> folks putting out this "change" message.
>
> Obviously they felt the threat from the question
> was pretty serious if they were willing to go to
> such lengths to destroy this guy.
>
> Amazing how you all choose to ignore the "big
> brother" aspect to this.

Yes it is. You want to ignore the patently obvious, while I just choose to ignore the issues that no one actually seems to have a good handle on.

You also choose to ignore the guaranteed tax increase in 2 years or less if Obama is elected. Good luck with that. All this BS about taxes right now is just that - BS that in 2 years will be meaningless.

You also should ask yourself this question.

Why is it that France, Canada and other countries have moved to more Conservative governments in recent years? Look into Canada in particular - the country everyone wants to hold up as a liberal/socialist bastion that is a shining example to the down trodden masses of the US.

Registered Voter Wrote:
>> trying to destroy some dipshit from Ohio


Yeah, it's really so Orwellian to debunk this jerkoff's disengenuous attempt to mislead the general public. He's a fraud and is getting exactly what he deserves.

I hope this destroys his entire plumbing career!! You'll never plunge a toilet in this town ever again, buster!

How did he mislead the public again? He asked a question, and Obama opened his mouth and answered him.

Obama made the "spreading the wealth" statement, and now he and his crew are working overtime to make the story about the plumber and his personal problems. You guys are sitting here laughing it up, and the sad part is you don't even realize how many people are paying attention to the fact that this guy is being destroyed for asking a question. They overplayed this when Palin was selected, and have since pulled back, now they are doing it to this guy in Ohio - only this time they are doing it to someone a lot of people look at as a "normal" person. So what, the guy has personal problems - I am sure all of us that post here do also.

So the lesson we take from this is never question a politician or your personal life will be spread all over the world because people can't stand it when you make their candidate look bad? Great message.

I've got no problem discussing whether his actual proposals make sense or not, or discussing European models, or whatever else. What I am objecting to, is holding this guy up as an example of someone who would be harmed by Obama's tax plan when that's just not the case. Why do you believe it's wrong to point that out?



Registered Voter Wrote:
-------------------------------------------------------
> You also should ask yourself this question.
>
> Why is it that France, Canada and other countries
> have moved to more Conservative governments in
> recent years? Look into Canada in particular - the
> country everyone wants to hold up as a
> liberal/socialist bastion that is a shining
> example to the down trodden masses of the US.

Registered Voter Wrote:
-------------------------------------------------------

> I think it's even more funny that we are less than
> 3 weeks from an election and the Obama campaign
> and surrogates are trying to destroy some dipshit
> from Ohio because he asked a question they didn't
> like.
>
>

I think it is funnier how McCain claims to be a defender of freedom while using his lawyers to suppress the votes of people who have lost their homes through foreclosure.

Yes, that has a lot to do with this issue doesn't it. Change the subject again.

"SPREAD THE WEALTH". Obama said it, now live with it.

When we can't question our politicians for legitimate reasons, we should all be afraid. That you all sit here and try to defend it is pretty funny.

Again, Obama is scared, and so it seems, are you all.

WashingToneLocian Wrote:
-------------------------------------------------------

> I think it is funnier how McCain claims to be a
> defender of freedom while using his lawyers to
> suppress the votes of people who have lost their
> homes through foreclosure.

Did you know that repeating lies don't make them anymore true? It is just one of those facts of life. You seem really desperate. Posting all day as if it might make a difference. If you feel so strongly, why not pen a letter to the editor of your local paper, get out and volunteer, phone bank from your home, etc. How many votes have you swayed here with your lies? Or, do you just come here to get that affirmation you need from your online friends?

Oh yeah, we're scared...

Registered Voter Wrote:
>
> Again, Obama is scared, and so it seems, are you
> all.

It sure seems that way. All of you keep posting here and stroking yourselves as if to ensure you are on the right side of this issue. There is the one thread you all have where all you do is post "honest" republican links. It is pretty funny.

But hey, keep up the good work. :)

SPREAD THE WEALTH! Yes, exactly!

Enough of crooked polictians giving OUR tax dollars to their filthy rich buddies.

I'd rather see my tax dollars go for programs to help people, not one person.

Right - this from the Obama side where he sits on a couple of different boards that gave millions of dollars to pet projects of his friends and contributors.

Same old BS in a different package. He will just help a different group of filthy rich people in the end. And also pay folks on the dole already to keep voting for democrats. Oh sorry, maybe you were talking about his rich friends that RAN Fannie Mae (not just lobbyists for them) who made between $20M and $90M running those entities into the ground. Right.

Please, you are just lashing out with more BS now. I still don't get why you are so afraid that you have to keep pushing these moronic responses. You have nothing better to point out that is factual other than the dirt on the life of some guy in Ohio?

Lol

LOL Wrote:
-------------------------------------------------------
> WashingToneLocian Wrote:
> --------------------------------------------------
> -----
>
> > I think it is funnier how McCain claims to be a
> > defender of freedom while using his lawyers to
> > suppress the votes of people who have lost
> their
> > homes through foreclosure.
>
> Did you know that repeating lies don't make them
> anymore true? It is just one of those facts of
> life. You seem really desperate. Posting all day
> as if it might make a difference. If you feel so
> strongly, why not pen a letter to the editor of
> your local paper, get out and volunteer, phone
> bank from your home, etc. How many votes have you
> swayed here with your lies? Or, do you just come
> here to get that affirmation you need from your
> online friends?

The lawsuit was filed Sept. 16 after The Michigan Messenger reported on its Web site that Macomb County Republican Party Chairman James Carabelli told one of its reporters that “we will have a list of foreclosed homes and will make sure people aren’t voting from those addresses.”

Registered Voter Wrote:
-------------------------------------------------------
> Right - this from the Obama side where he sits on
> a couple of different boards that gave millions of
> dollars to pet projects of his friends and
> contributors.
>
> Same old BS in a different package. He will just
> help a different group of filthy rich people in
> the end. And also pay folks on the dole already to
> keep voting for democrats. Oh sorry, maybe you
> were talking about his rich friends that RAN
> Fannie Mae (not just lobbyists for them) who made
> between $20M and $90M running those entities into
> the ground. Right.
>
> Please, you are just lashing out with more BS now.
> I still don't get why you are so afraid that you
> have to keep pushing these moronic responses. You
> have nothing better to point out that is factual
> other than the dirt on the life of some guy in
> Ohio?
>
> Lol


The guy making $90 million from Fannie Mae is Daniel Mudd, a Republican. Big-time donor to Bush and McCain. He is the one who in 2005 instituted a highly aggressive buying program for subprime mortgage securities that was questioned by internal management at Fannie Mae.

As if all forms of taxation aren't a form of "spreading the wealth." What a stupid talking point. It's the whole freakin' point of having taxes in the first place. Every president has used taxes to redistribute wealth. But I guess when you're Joe Sixpack, plain common sense takes a backseat to irrational fear.

TheMeeper Wrote:
-------------------------------------------------------
> As if all forms of taxation aren't a form of
> "spreading the wealth." What a stupid talking
> point. It's the whole freakin' point of having
> taxes in the first place. Every president has
> used taxes to redistribute wealth.

What a stupid, uninformed statement.

The Constitution did not authorize taxation as a form of wealth redistribution. Originally only the States could levy direct taxes, with the Federal government getting its income from tariffs and consumption type taxes. The 16th amendment allowed for more direct taxation by the federal government, but that was much later, and the tax rates were something like 1% to 7% on incomes over $1.5M (in the early 1900s). Later as we had various wars, the numbers started creeping up - but for the most part the money was used for direct costs of running the government and the military.

http://www.ustreas.gov/education/fact-sheets/taxes/ustax.shtml

Quote

Though social policies sometimes governed the course of tax policy even in the early days of the Republic, the nature of these policies did not extend either to the collection of taxes so as to equalize incomes and wealth, or for the purpose of redistributing income or wealth. As Thomas Jefferson once wrote regarding the "general Welfare" clause:

"To take from one, because it is thought his own industry and that of his father has acquired too much, in order to spare to others who (or whose fathers) have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, "to guarantee to everyone a free exercise of his industry and the fruits acquired by it."

So then when Reagan came in we had a significant overhaul of the taxes which certainly helped. Unfortunately Congress continued to increase spending...

Quote

...

The 1986 tax act also represented a temporary reversal in the evolution of the tax system. Though called an income tax, the Federal tax system had for many years actually been a hybrid income and consumption tax, with the balance shifting toward or away from a consumption tax with many of the major tax acts. The 1986 tax act shifted the balance once again toward the income tax. Of greatest importance in this regard was the return to references to economic depreciation in the formulation of the capital cost recovery system and the significant new restrictions on the use of Individual Retirement Accounts.

Between 1986 and 1990 the Federal tax burden rose as a share of GDP from 17.5 to 18 percent. Despite this increase in the overall tax burden, persistent budget deficits due to even higher levels of government spending created near constant pressure to increase taxes. Thus, in 1990 the Congress enacted a significant tax increase featuring an increase in the top tax rate to 31 percent. Shortly after his election, President Clinton insisted on and the Congress enacted a second major tax increase in 1993 in which the top tax rate was raised to 36 percent and a 10 percent surcharge was added, leaving the effective top tax rate at 39.6 percent. Clearly, the trend toward lower marginal tax rates had been reversed, but, as it turns out, only temporarily.

...

If the Feds continue to increase spending, it won't matter. Under Obama, that is all set to happen - as I have not heard a program he plans to cut yet other than Defense spending. And there is only so much of that he can cut and none of it right away. Since he has proposed dozens of new spending programs, how exactly do you think he will get all this money? Just by his current tax proposals? No way.

A pretty good argument can be made that the Republican agenda of tax cuts for the wealthy is also a form of income redistribution--from future generations. Since Ronald Reagan we have put nearly 10 trillion dollars on the national credit card to pay for our current consumption and are leaving that bill to be paid by our children, grandchildren, and their children. If Republicans are so against "income redistribution" and "welfare" they should insist that adjust spending and taxation levels to the point where all current obligations are paid off within 10 or 20 years. I won't hold my breath.


TheMeeper Wrote:
-------------------------------------------------------
> As if all forms of taxation aren't a form of
> "spreading the wealth." What a stupid talking
> point. It's the whole freakin' point of having
> taxes in the first place. Every president has
> used taxes to redistribute wealth. But I guess
> when you're Joe Sixpack, plain common sense takes
> a backseat to irrational fear.

Registered Voter Wrote:
-------------------------------------------------------
> TheMeeper Wrote:
> --------------------------------------------------
> -----
> > As if all forms of taxation aren't a form of
> > "spreading the wealth." What a stupid talking
> > point. It's the whole freakin' point of having
> > taxes in the first place. Every president has
> > used taxes to redistribute wealth.
>
> What a stupid, uninformed statement.
>
> The Constitution did not authorize taxation as a
> form of wealth redistribution. Originally only the
> States could levy direct taxes, with the Federal
> government getting its income from tariffs and
> consumption type taxes. The 16th amendment allowed
> for more direct taxation by the federal
> government, but that was much later, and the tax
> rates were something like 1% to 7% on incomes over
> $1.5M (in the early 1900s). Later as we had
> various wars, the numbers started creeping up -
> but for the most part the money was used for
> direct costs of running the government and the
> military.
>
> http://www.ustreas.gov/education/fact-sheets/taxes
> /ustax.shtml
>
>
> Though social policies sometimes governed the
> course of tax policy even in the early days of the
> Republic, the nature of these policies did not
> extend either to the collection of taxes so as to
> equalize incomes and wealth, or for the purpose of
> redistributing income or wealth. As Thomas
> Jefferson once wrote regarding the "general
> Welfare" clause:
>
> "To take from one, because it is thought his
> own industry and that of his father has acquired
> too much, in order to spare to others who (or
> whose fathers) have not exercised equal industry
> and skill, is to violate arbitrarily the first
> principle of association, "to guarantee to
> everyone a free exercise of his industry and the
> fruits acquired by it."
>
>
> So then when Reagan came in we had a significant
> overhaul of the taxes which certainly helped.
> Unfortunately Congress continued to increase
> spending...
>
>
> ...
>
> The 1986 tax act also represented a temporary
> reversal in the evolution of the tax system.
> Though called an income tax, the Federal tax
> system had for many years actually been a hybrid
> income and consumption tax, with the balance
> shifting toward or away from a consumption tax
> with many of the major tax acts. The 1986 tax act
> shifted the balance once again toward the income
> tax. Of greatest importance in this regard was the
> return to references to economic depreciation in
> the formulation of the capital cost recovery
> system and the significant new restrictions on the
> use of Individual Retirement Accounts.
>
> Between 1986 and 1990 the Federal tax burden rose
> as a share of GDP from 17.5 to 18 percent. Despite
> this increase in the overall tax burden,
> persistent budget deficits due to even higher
> levels of government spending created near
> constant pressure to increase taxes. Thus, in 1990
> the Congress enacted a significant tax increase
> featuring an increase in the top tax rate to 31
> percent. Shortly after his election, President
> Clinton insisted on and the Congress enacted a
> second major tax increase in 1993 in which the top
> tax rate was raised to 36 percent and a 10 percent
> surcharge was added, leaving the effective top tax
> rate at 39.6 percent. Clearly, the trend toward
> lower marginal tax rates had been reversed, but,
> as it turns out, only temporarily.
>
> ...
>
>
> If the Feds continue to increase spending, it
> won't matter. Under Obama, that is all set to
> happen - as I have not heard a program he plans to
> cut yet other than Defense spending. And there is
> only so much of that he can cut and none of it
> right away. Since he has proposed dozens of new
> spending programs, how exactly do you think he
> will get all this money? Just by his current tax
> proposals? No way.


Thomas Jefferson also believed in the Separation of Church and State.

Voter Wrote:
-------------------------------------------------------
> A pretty good argument can be made that the
> Republican agenda of tax cuts for the wealthy is
> also a form of income redistribution--from future
> generations. Since Ronald Reagan we have put
> nearly 10 trillion dollars on the national credit
> card to pay for our current consumption and are
> leaving that bill to be paid by our children,
> grandchildren, and their children. If Republicans
> are so against "income redistribution" and
> "welfare" they should insist that adjust spending
> and taxation levels to the point where all current
> obligations are paid off within 10 or 20 years. I
> won't hold my breath.
>
>


You should read "Running on Empty" by Peter G. Peterson. http://books.google.com/books?id=8S2MHQAACAAJ&dq=Running+on+empty

By 2040, by the most optimistic estmitate (the CBO, GAO and OMB have slightly different projections, the most optimistic predicts 2040) Entitlements will equal 100% of Government revenues.

This is not a "republican" or "democrat" blame game. Both parties ignore this issue and help to continue it and make it worse. Bush added onto it, as much as the republican party is against entitlements, with the medicare prescription drug program.

That's why the subtitle of the book by the former secretary of commerce under Nixon is "How the Democratic and Republican Parties are Bankrupting Our Future and what Americans Can Do about it"

This is an excerpt from an illuminating article on Salon.com by a writer claiming (tongue in cheek) to be "Joe the Plumber"'s brother "Bob the Banker". I have a number of high-income friends who never pass up an opportunity to tell me "how they are going to get slaughtered" if Obama gets elected. I suspect most of them make more than 280k but this is a good example of how somebody in that range would fare. You can find the full article at:

http://www.salon.com/opinion/kamiya/2008/10/21/taxes/


Anyway, let's get back to my story. I'm a typical middle-class American. I run a small family bank in Ohio. I'm no Master of the Universe, no hedge-fund manipulator. I have a couple of dozen employees. I work hard. I obey the laws. I have a family. But if Barack Trotsky Obama wins, I can kiss it all goodbye. I've done well for myself, but $280,000 a year doesn't go as far as it used to, even here in Akron.

The numbers don't lie. So here they are.*

So, as I said, I make $280,000 annually after business expenses. I'm married and filing jointly. Under Obama, my itemized deductions would actually increase slightly — I'd get $49,420 in itemized deductions, while under McCain I'd get $48,975. But my personal exemptions would increase slightly under McCain — he'd give me $6,911, whereas I'd only get $6,132 from Obama.

That leaves my taxable income at $213, 766 under Obama, $213,433 under McCain. Now we have to factor in the bracket cutoff, which for 2009 is $208,850. Anything below that figure for married couples filing jointly is taxed at the fourth tier, 28 percent. Any income above it, until you get up to near $400,000, is taxed at the fifth tier. And this is where the raving income-redistribution scheme of Barack Robespierre Obama kicks in.

As you can see, my taxable income is about $5,000 higher than the cutoff. McCain is going to tax that $5,000 at the current rate, which is 33 percent. But Obama's crazed plan calls for raising that rate to — get ready for it — 35 percent.

And here's what this means. Under McCain, my total tax bill would be $48,254. Under Obama, it would be $48,511.

That's a difference of $257. I'll say it again: Two hundred and fifty-seven dollars.

That's not two hundred and fifty-seven dollars I, or America, can afford.

Again - I don't have to repeat myself, I will let Barney Frank say it for me. This is what you are going to get in a couple of years.

And let me qualify (in response to Bob), just in case people didn't understand me. I want them to CUT SPENDING. With the tax revenues we get now (which were at record highs as of last year I believe), we should be able to run the government without massive overspending. The problem is both sides of the aisle seem to believe that we can just spend money on everything. They refuse to cut spending, and even with Obama, the only place you are going to see cuts is in Defense (which happens to employ a large group of people in the DC area), and he has outlined dozens of new ways to spend even more money. Honestly I don't get it. But as I said, Barney Frank says it just so folks aren't missing this:

````````````````
http://www.youtube.com/watch?v=u1Mazjm_A5k

Yet another speech from the defeatist Republicans. Yawn.

Yep, Barney Frank says it all, doesn't he?

Bob Wrote:
-------------------------------------------------------

>
> By 2040, by the most optimistic estmitate (the
> CBO, GAO and OMB have slightly different
> projections, the most optimistic predicts 2040)
> Entitlements will equal 100% of Government
> revenues.
>

Actually, debt managment will hit 100% long before entitlements do.

Registered Voter Wrote:
-------------------------------------------------------
> Yep, Barney Frank says it all, doesn't he?


Actually John Maynard Keynes says it all.

Yes, during the Great Depression when unemployment was up above 30%, he advocated that the government spend money to stimulate economic growth. The thing is, unemployment right now is not much more than it was during the best of Clinton's time in office (touted by MSM as wonderful levels of unemployment).

http://www.chuckbraman.com/Writing/WritingFilesPhilosophy/keynes.htm

Quote

...
Keynes new theory, on the other hand, conveyed a politically much more palatable solution to unemployment: according to Keynes, the solution to unemployment was a growth in government spending. The particular form of government spending advocated by Keynes was for the government to purposely adopt a policy of budget deficits; this he called "fiscal policy."

To arrive at this seemingly simple conclusion, however, Keynes developed a highly complex argumentation brimming with new economic terms and concepts of his own devising, such as multipliers, consumption and saving functions, the marginal efficiency of capital, liquidity preference, I-S curve, and many others.

The essence of Keynes' theory, however, involves a shift from classical economics' concern with the production of wealth to a concern with the consumption of wealth. According to Keynes, Say's Law is not true; that is, supply does not create its own demand. Rather, according to Keynes, supply is capable of outstripping demand, with the result that goods remain unsold, and production and employment are correspondingly cut back. As a result, the solution to unemployment, according to Keynes, is not to reduce wages and prices, as the Classicals advocated, but to increase consumption through the spending of money by the government.
...

Thus, Keynes believed, in order to "get the economy moving again," the government must itself begin spending money, since the general population is unable to do so sufficiently. How, and where the government spends its money, and whether such spending fulfills any desirable public or private purpose beyond its economic function, Keynes held, is irrelevant. For the sole purpose of such spending is to buy goods that would otherwise remain unsold, so that the sellers of those goods can in turn "buy," i.e., employ, currently unemployed workers. Government spending, for Keynes, fills the gap that necessarily must exist in a free economy between savings and investment, a gap which, if not filled by the government's spending, would be filled with unemployed people and unsold goods.
...

Of course, back when he made these observations, the idea of "spending" he conceived was magnitudes less than what would be needed today assuming this would even help in our current circumstance. Assuming that the debt payments will soon outstrip any other form of government payments soon - how do you propose to get those items into balance when the new policy is again based on spending well beyond our means? Based on all of these presumptions, and that the government doesn't reduce spending, it is pretty obvious they will be raising taxes on folks in much larger amounts than what they are promising now to get elected.

Let's compare what Barney Frank said to what millions of Americans heard what John McSimilar say:

"I voted for George Bush 90% of the time" and "The fundamentals of our economy are strong".

Barney Frank is not running for President, ergo you fail.

Barney Frank represents the current majority in Congress that would be shaping and passing laws in the future.

What McCain said doesn't even bear a remote resemblance to what Barney Frank has stated.

You are the weakest link.