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Old 12-08-2010, 08:16 AM   #41 (permalink)
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It's a shitty time to be doing business and small businesses are more susceptible than larger ones.
Correct. Which is why small-business people would very much like for Mr. Obama and his cohorts to stop using them as a cash-cow, punching bag, and class-warfare scapegoat.
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Old 12-08-2010, 08:29 AM   #42 (permalink)
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Originally Posted by Rekna View Post
It will be pretty hard to balance the budget without some major changes.
The changes required primarily involve stopping Congress from additional spending while we grow the economy.

Assuming taxes revenue is about 28% of GDP, for every trillion in GDP growth the government revenue increases by $280 billion. If the 2030 deficit is projected to be $1.3 trillion we would need about $4.8 trillion in GDP growth or 32% growth in 20 years from our current $14.8 trillion GDP.

The above is manageable and would allow room to pay down existing debt without too much pain. The key is to control spending while creating an environment for strong economic growth. People who are in a panic in my view either have a political agenda or they underestimate the fundamental strength of our economy and the impact of economic growth.
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Old 12-08-2010, 08:39 AM   #43 (permalink)
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Originally Posted by The_Dunedan View Post
Correct. Which is why small-business people would very much like for Mr. Obama and his cohorts to stop using them as a cash-cow, punching bag, and class-warfare scapegoat.
To be honest, I don't know the American small-business environment well enough to really gauge how things are unfolding of late.

What specific comments do you have about the small business bill?
What about the $30-billion fund for small-business loans?
And don't a vast majority of small businesses earn under $250,000/year gross?
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Old 12-08-2010, 10:42 AM   #44 (permalink)
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Originally Posted by Baraka_Guru View Post
To be honest, I don't know the American small-business environment well enough to really gauge how things are unfolding of late.

What specific comments do you have about the small business bill?
What about the $30-billion fund for small-business loans?
And don't a vast majority of small businesses earn under $250,000/year gross?
The quote below specifically references conditions in California but it is reflective across the country. Credit abruptly dried up in 2008/2009, it was virtually impossible to get new credit unless you were a perfect risk (basically you don't need the money), lines-of credit were frozen, and rates/fees went up drastically. Even after the bailouts, banks did not and are not lending. Conditions were created where banks had to "fix" their balance sheets often just based on the rhetoric and threats from Washington. On top of that banks could get "loans" from the Fed at virtually no cost and then buy treasuries at no risk...it was and still is craziness...we need focused leadership.

Quote:
If the big bank bailouts were supposed to trickle down to small businesses needing loans, it’s an arid landscape in California, according to a new report from the California Reinvestment Coalition.

“Despite a $700 billion bank bailout and strong reported bank profits, the increased levels of bank lending to small businesses promised by former Treasury Secretary Henry Paulson and others has not occurred,” the report says.

(Download a copy of the report by clicking on the link below.)

The report, written by Alan Fisher, a researcher with the San Francisco-based group, says that the state’s five major banks -- Bank of America, CitiBank, US Bank, Union Bank, and Wells Fargo -- have decreased their Small Business Administration lending. “Bank of America and Citi’s SBA lending have dropped the most among the major banks between 2007 and 2009 -- decreasing their lending by 97 percent and 99 percent, respectively,” the report says.

Mr. Fisher says that Bank of America provided 2,304 SBA loans in California in 2007, but only 74 in 2009 and Citi made 906 SBA loans in 2007 but only 10 in 2009.

“The impact on business districts is clear as businesses shutter and empty store fronts become more common in California and the nation,” the report says.

The report says the change is due to two developments: Banks tightened their small business underwriting in 2007 to limit access to a “tiny few” and have loosened them only slightly since; and, federal regulators and the U.S. Treasury have been “more concerned with propping up financial institutions and Wall Street than ensuring the economic vitality of American small business.”
http://www.centralvalleybusinesstime.../001/?ID=17038
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Old 12-08-2010, 10:49 AM   #45 (permalink)
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If small business are feeling too much of a squeeze to continue operating then we do have a problem that needs to be addressed weather we like it or not. Taxes are important and we all need to do our part but, assuming this is a major problem for small businesses, we need to be more pragmatic about the role they play in the tax structure and allow them to thrive and succeed as well.

I'd be pretty upset if I sunk my time, energy, life and money into a business only to watch it go under because the govt kept asking for more without thought or concern to my or my businesses financial well being.
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Old 12-08-2010, 11:11 AM   #46 (permalink)
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Originally Posted by Wes Mantooth View Post
...assuming this is a major problem for small businesses,...
For the past two years small business owners have been shouting and screaming that there is a major problem. Too bad we are not GM, AIG, Wall Street, or State and local governments - if the needs of small business had been addressed early on, there is no doubt unemployment would be much closer to normal levels and economic growth would be stronger.
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Old 12-08-2010, 11:25 AM   #47 (permalink)
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I'm not disagreeing I just honestly don't know how widespread it is. I do know a few people that run small business who are echoing the same thing but its hard to grasp if its just happening in a vacuum or perhaps just one piece of a much larger puzzle thats causing them to fail.

Anyway the more I hear about the more I'm starting to see that its become a major problem that needs to be addressed.
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Old 12-08-2010, 11:40 AM   #48 (permalink)
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Problems for Small Businesses:

1: Lack of credit. Banks and lending Corps. are sitting on their reserves in anticipation of a skullfucking.

2: Lack of Inventory: The ForEx situation keeps getting worse for the Dollar, making it harder and more expensive to import product from overseas. Since the US has essentially no manufacturing left, this means the prices for a -lot- of things are being fucked with.

3: Tax Increase: 35%. That's what they're looking at: losing 35% straight off the top -just- in Income Taxes. That's not counting all the other payments they already make (Social Security, State/local taxes, Medicare, Workman's Comp, etc), -or- Obamacare. So most small business-owners are figuring on losing a minimum of 50% of each day's take immediately. That's 50% gone before they've paid the electric bill, paid their employees, paid themselves, or paid the rent. That's gone before they can buy inventory or service their debts. And it's totally unsustainable. NO business smaller than the Pentagon can stay in open when 50% or more of their income is getting snatched before they've even paid the Goddamned light bill. Guess what: paying the Officers (CEO, CFO, President, etc) comes -last- in almost any small business. All that other stuff comes first. And if somebody spends a few months not drawing a paycheck because there's nothing left after taxes, bills, and payroll...guess what? Nobody's dumb enough to do that forever, and nobody can support it. That shop will close, and all those jobs will evaporate.

4: Regs and Bullshit: See the above anecdote in regards to drains. Now extrapolate that into every possible aspect of a business. Now imagine that the rules are constantly changing, and that every change requires modifications or alterations which cost money and time. Imagine trying to run a restaurant, bar, or club when every time some pencil-pushing Inspector with a chip on a shoulder shows up it ends up costing you time and money.
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Old 12-08-2010, 11:56 AM   #49 (permalink)
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A friend of mine runs a small gas station/convenience store nearby, its been there for about 20 odd years and always seems busy but he's saying roughly the same thing. I've never prodded him on specifics but he's more or less telling me that taxes/regs are making it so difficult to turn any kind of meaningful profit that he's starting to question weather its worth staying in business. Its just too much of a hassle for the small profit he's making, if he's now facing an additional 35% tax increase I can see him closing down for good and just washing his hands of it. I would probably do the same, its just not worth it.

We can't just keep ignoring these problems.
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Old 12-08-2010, 12:04 PM   #50 (permalink)
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To be clear: the tax increase will be -to- 35%, not -by- 35%. Allegedly this Devil's Deal from yesterday should stop the tax increase, but that's only if it's all approved and no other skullfucks come down the pipe.
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--Strange Famous, advocating the use of falsified charges in order to shut people up.
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Old 12-08-2010, 12:11 PM   #51 (permalink)
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Oh I see I thought that sounded wrong when I went back and read it, not that it really makes much of a difference when you're looking at your bottom line and your profit is getting smaller and smaller.
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Old 12-08-2010, 01:18 PM   #52 (permalink)
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I thought the Democrats tax plan was only to increase taxes on the amount of income above $250K and the taxes on the amount below $250K would stay reduced as is. If income taxes must be raised there must be some income number above which we are willing to tax.
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Old 12-08-2010, 01:35 PM   #53 (permalink)
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The problem is, as I said, that those raises (for $250,000+) affect a very large percentage of small businesses. It won't just increase the taxes paid by Bob G. Millionaire, it will increase those paid by Mom & Pop's Grocery and Joe's Plumbing besides. Almost any small business takes in more than $250,00/yr: most of it goes right back out the door again as inventory or payroll or taxes. However, just as you're taxed on your income (and the IRS cares not one whit how much of that income goes for rent/food/bills/etc), so are these companies.

IRS: "You made $300,000 last year, so you owe us $105,000.00 in Income Taxes. Pay up."

Business Owner: "We took in $300,000, but $200,000 of that went to inventory, payroll, benefits and infrastructure. The Corporation only got to keep $100,000."

IRS: "Like we said, you made $300,000.00 last year. What you spent it on doesn't matter. You owe us $105,000.00. Now pay up, or we're seizing your business, all your inventory and infrastructure, and your bank accounts. Then we're sending you to jail."

Business Owner: "But that's more money than we have left over after all those expenses! We'll be bankrupt, have to close down!"

IRS: "Do we look like we give a shit? Pay up or go to jail, your choice."
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--Strange Famous, advocating the use of falsified charges in order to shut people up.

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Old 12-08-2010, 01:54 PM   #54 (permalink)
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Originally Posted by The_Dunedan View Post
However, just as you're taxed on your income (and the IRS cares not one whit how much of that income goes for rent/food/bills/etc), so are these companies.
I only know a few small business owners and they only paid taxes on income after deductions and business expenses. One Contract Engineer I worked with would write off all living expense while he was away from home (rent, car, meals, etc..) and he was away from home most of the time. As I recall he had to jump through some hoops to maintain a home address for tax purposes such as voting record etc.. The bottom line is he was only liable for income after deductions.
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Old 12-08-2010, 02:11 PM   #55 (permalink)
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Originally Posted by Wes Mantooth View Post
I'm not disagreeing I just honestly don't know how widespread it is. I do know a few people that run small business who are echoing the same thing but its hard to grasp if its just happening in a vacuum or perhaps just one piece of a much larger puzzle thats causing them to fail.

Anyway the more I hear about the more I'm starting to see that its become a major problem that needs to be addressed.
I don't see your comments as a disagreement. The issue to me is that the folks in Washington should stop and think about the impact small business has on this country and stop with the attacks. Here is a link to the Census Bureau with some stats on small business.

Statistics about Business Size from the Census Bureau

For example in the category of business employing 1 to 99 people - there are about 4.8 million of these firms, employing about 58 million people. There are 3,534 businesses with 2,500 employees or more, they employ 42.8 million. Big business has big influence in Washington, people who run business with fewer than 100 employees get ignored and get the shaft.

Think about it this way, there are 4.8 million small businesses based on the above on the margin of hiring one additional employee, staying with what they have or laying off one employee. In November there were about 15 million considered unemployed. Unemployment could be cut by 1/3 overnight with policy that encouraged each business in this category alone to hire one person!

This is not complicated stuff and I don't have any special knowledge or insight - so what is the deal with the folks in Washington???? Sorry, I am just blowing off steam as I end another year in the hole - two years ago I employed 4 people, 6 including me and my wife, now it is just me and my wife.
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Old 12-08-2010, 02:23 PM   #56 (permalink)
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I only know a few small business owners and they only paid taxes on income after deductions and business expenses. One Contract Engineer I worked with would write off all living expense while he was away from home (rent, car, meals, etc..) and he was away from home most of the time. As I recall he had to jump through some hoops to maintain a home address for tax purposes such as voting record etc.. The bottom line is he was only liable for income after deductions.
What you can "expense," how much of it, and what it's deductible is worth, however, are questions the IRS decides based upon, among other things, what type of Corporation (or LLC, or Partnership, etc) a business is. The rules which apply to one business may not apply to an identical business up the road if the two are Incorporated (or otherwise organized) in different ways.

Additionally, even if you are correct across-the-board, and all expenses for payroll, inventory, etc can be deducted, there's still the double-whammy of Obamacare and the increased tax rate to deal with. All the deductions in the world won't help when Income remains the same, Payout remains the same (in terms of rent, payroll, inventory, etc), while the amount of taxes you -do- pay more than doubles as well as having new expenses added on top of it. It's simply unsustainable.

If a business makes $100,000.00 per year, and spends $50,000.00 of that on deductable expenses, it's taxed on $50,000.00. But if the tax -paid on- that $50,000.00 suddenly doubles while income remains $50,000.00 per year and expenses hold steady, you can see how this could get to be a problem. Now, throw in on top of that a very expensive, highly intrusive, time-consuming mandate like Obamacare, and you have a very serious problem. Literally every small business owner I know is worried sick about these laws, and for good reason.
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--Strange Famous, advocating the use of falsified charges in order to shut people up.
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Old 12-08-2010, 03:07 PM   #57 (permalink)
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Originally Posted by aceventura3 View Post
I don't see your comments as a disagreement. The issue to me is that the folks in Washington should stop and think about the impact small business has on this country and stop with the attacks. Here is a link to the Census Bureau with some stats on small business.

Statistics about Business Size from the Census Bureau

For example in the category of business employing 1 to 99 people - there are about 4.8 million of these firms, employing about 58 million people. There are 3,534 businesses with 2,500 employees or more, they employ 42.8 million. Big business has big influence in Washington, people who run business with fewer than 100 employees get ignored and get the shaft.

Think about it this way, there are 4.8 million small businesses based on the above on the margin of hiring one additional employee, staying with what they have or laying off one employee. In November there were about 15 million considered unemployed. Unemployment could be cut by 1/3 overnight with policy that encouraged each business in this category alone to hire one person!

This is not complicated stuff and I don't have any special knowledge or insight - so what is the deal with the folks in Washington???? Sorry, I am just blowing off steam as I end another year in the hole - two years ago I employed 4 people, 6 including me and my wife, now it is just me and my wife.
I've always wondered if part of the problem is the folks in Washington are simply out of touch. You can only garner so much information with just numbers and raw data, which I'm sure (along with pandering for votes) is what usually goes into making a tax policy. It can work to an extent but if you don't take into account the real people and issues behind those numbers then its never going to work properly.

Sorry to hear about your business, hopefully you and your wife are able to keep it afloat. I can certainly understand needing to blow off a little steam about it.
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Old 12-08-2010, 03:53 PM   #58 (permalink)
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Calling this a "tax increase" is playing a symantics game. The Bush tax cuts were temporary. Bush inherited a tax surplus and rather than paying down the debt came up with a temporary cut. The fact that it goes back in 2011 is a result of legislation that Bush signed and represents the end of "temporary".
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Old 12-08-2010, 04:16 PM   #59 (permalink)
 
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Originally Posted by The_Dunedan View Post
The problem is, as I said, that those raises (for $250,000+) affect a very large percentage of small businesses....
Not according to the Joint Committee on Taxation (and other sources).

Restoring the temporary tax cuts on those with income over $250,000 would impact about 3 percent of small businesses....or less than 1 million taxpayers who pay their business taxes at the individual level.

And there is no evidence anywhere that restoring that tax to the marginal rate of 39% from the current (and temporary) rate of 36% would impact their businesses.

But it would continue to drain significant revenue from the federal treasury....to the tune of nearly another $1 trillion over ten years.
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Old 12-08-2010, 05:27 PM   #60 (permalink)
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Calling this a "tax increase" is playing a symantics game.
Are taxes going up, or not?

Quote:
The Bush tax cuts were temporary.
Which was part of the problem.

Quote:
Bush inherited a tax surplus
No, he inherited a projected surplus, which projections were made with the assumption that there were no systemic or structural faults in the economy, and that the growth of the late 90's would continue unabated and unslowed into eternity. That projected surplus was predicted based upon the assumption that there would be no more recessions, bubbles, corrections, or even simple down-swings in the market and economy: they were based upon the assumption that nothing would ever go wrong. That was idiotic. That projected surplus never fucking existed.

Edited to add: if this sounds similar to the CBO's projections regarding Obamacare, there's a reason. The projections that Obamacare will save XYZ Dollars are based upon the same core assumption: that nothing will ever go wrong/. That nothing will be late, or over-budget, or require modification, or require more staff; that there will be no economic downturns/spikes, that inflation/deflation will remain status quo, that the ForEx markets won't go bonkers thanks to the Chinese dumping inflated Dollars, that the Commercial Mortgage bubble won't burst, etc. etc. etc. When's the last time a FedGov project came in on time and on budget? I can't remember.

Quote:
The fact that it goes back in 2011 is a result of legislation that Bush signed and represents the end of "temporary".
Again, one of the problems with the original cuts: they had an expiration date.

Quote:
Not according to the Joint Committee on Taxation (and other sources).
What are these "other sources?" I frankly don't trust anything the Joint Committee on Taxation says: they are Gov't employees, bureaucrats, Statists and tax-parasites every one. It is in their interest to distort this information in order to continue and aggrandize their grotesque power and affluence. They -want- these expansions, and will do a great deal to get them: if WikiLeaks has taught us anything (which we/you should have learnt long before now) it should be this: Politicians LIE.

Quote:
Restoring the temporary tax cuts on those with income over $250,000 would impact about 3 percent of small businesses....or less than 1 million taxpayers who pay their business taxes at the individual level.
Even assuming these figures are true: how many people do those businesses employ? How much economic activity and liquidity do they generate? And how much will -both- of these figures fall? My experience in the small-business world says a lot and a SHIT-TONNE.

Quote:
But it would continue to drain significant revenue from the federal treasury....to the tune of nearly another $1 trillion over ten years.
Then maybe the Feds should quit draining the Treasury with ridiculous unproductive wars, bailouts for businesses which deserve to fail, and every welfare benefit imaginable. Maybe if they kept to their Constitutionally-mandated bailiwick, and kept out of other Country's and States' business, they wouldn't -need- to take 35-39% of a persons' or businesses' income, depriving people of jobs and the opportunity to advance and depriving how many unknown millions of people of the benefits of technological advancement.
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--Strange Famous, advocating the use of falsified charges in order to shut people up.

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Old 12-09-2010, 04:55 PM   #61 (permalink)
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Originally Posted by dc_dux View Post
Not according to the Joint Committee on Taxation (and other sources).

Restoring the temporary tax cuts on those with income over $250,000 would impact about 3 percent of small businesses....or less than 1 million taxpayers who pay their business taxes at the individual level.
According to the link I provided previously there were 4.8 million businesses that employed less than 100 people. So are we talking about 20% of these businesses - and then what percent of potential start-ups - those that are in the precarious stage of less than 5 years in business. Start-ups are often devastated due to poor tax planning and the inability or unwillingness to get professional help, these issues that may appear trivial can be the difference between further growth or closing the doors. People who risk their life savings and have it culminate to a big year literally may be forced out of business over a few thousand dollars - especially if credit is not available.

Also think about the 1 million on the margin of hiring one person, staying put, or laying one person off - that marginal tax rate difference will play a role in their decision - wouldn't we prefer 1 million businesses hiring one additional person - wouldn't the net to the treasury in that scenario more than off-set the "tax cut"?

Quote:
And there is no evidence anywhere that restoring that tax to the marginal rate of 39% from the current (and temporary) rate of 36% would impact their businesses.
Many businesses run on very thin profit margins, taxes make a difference. More importantly it makes a difference in the calculations used to determine future investment. If I had money to invest in the growth of my business or in some other vehicle, my internal rate of return calculation factors in taxes. If I can get a risk free return(like triple AAA municipal bonds), that is greater than my risk adjusted return on investing in business growth - the decision is an easy one. Wouldn't we rather people invest in business activity rather than in non-productive financial vehicles? Many people are buying and holding gold rather than in something productive - we need to encourage business investment. Not raising taxes more important than the actual rate, sets a tone that will encourage such investment. This administration desperately needs to send a message to all those who have investable capital on the sidelines or in non-productive assets. Perhaps Obama is starting to get it, too bad others don't if he is.

Quote:
But it would continue to drain significant revenue from the federal treasury....to the tune of nearly another $1 trillion over ten years.
Look at it this way, the government can increase taxes, even confiscate property any time they want. The national net worth will not decrease just because people write smaller checks to the IRS.
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Old 12-09-2010, 05:58 PM   #62 (permalink)
 
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Fact check:

Quote:
As for the claim that Democrats favor "a huge tax hike on small business," in the words of one ad, that’s also wrong for the vast majority of small-business owners. Only about 3 percent of those with any business income showing on their personal returns would see a tax increase. Republicans retreated to claiming that half the small-business "income" — as opposed to business owners — would see an increase. But that’s wrong, too. Much of the "small"-business income they are counting comes from businesses with yearly income of $50 million or more — which is big business income in just about anybody’s book.

Whoppers of Campaign 2010 | FactCheck.org
If you have hard data that restoring the marginal rate on the top bracket to 39% (from the current temporary 36%) would adversely impact those taxpayers, post it.

---------- Post added at 08:58 PM ---------- Previous post was at 07:59 PM ----------

ace...for the record, nearly 1/3 of the nearly $800 billion in the stimulus was tax cuts and tax relief- for individuals AND businesses (primarily small businesses), including extension of Enhanced Small Business Expensing (a temporary increase in limitations on expensing some depreciable business assets), 5-Year Carryback of Net Operating Losses for Small Businesses, Exclusion of 75% of Small Business Capital Gains from Taxes and others.
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Old 12-09-2010, 06:39 PM   #63 (permalink)
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Originally Posted by dc_dux View Post
Fact check:



If you have hard data that restoring the marginal rate on the top bracket to 39% (from the current temporary 36%) would adversely impact those taxpayers, post it.
Increasing anyone's tax by 3% is going to have an adverse effect on that person because that is 3% of their money that they don't have any more. It's amazing that the inside the beltway crowd, namely Congress and Obama doesn't understand that.
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Old 12-09-2010, 06:55 PM   #64 (permalink)
 
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Originally Posted by dogzilla View Post
Increasing anyone's tax by 3% is going to have an adverse effect on that person because that is 3% of their money that they don't have any more. It's amazing that the inside the beltway crowd, namely Congress and Obama doesn't understand that.
An increase in the marginal rate on middle income taxpayers -- those with little or no disposable income - probably does have an adverse effect.

There is no hard data to support the notion that the top 2 percent of taxpayers would alter their spending and/or investing patterns with a 3% increase in their marginal rate.

As I asked ace, if you have data to suggest otherwise, please post it.

And, dont forget that those top taxpayers would still benefit from the current tax rate on their first $250,000.

---------- Post added at 09:55 PM ---------- Previous post was at 09:52 PM ----------

There is also no hard data that if the rate were to remain the same for top bracket that it would be stimulative in any way...as opposed to extending unemployment insurance, which numerous studies have found results in significant stimulus - nearly $2 for every $1 in UI.
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Old 12-09-2010, 07:13 PM   #65 (permalink)
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Originally Posted by dc_dux View Post
There is no hard data to support the notion that the top 2 percent of taxpayers would alter their spending and/or investing patterns with a 3% increase in their marginal rate.
What difference does it make whether it alters their spending, savings and investment patterns or not? It's that person's money and their right to do what they want with it. If they want to spend it, save it, give it away or just light it on fire, it's none of Washington's business. It's not Washington's money.

Quote:
Originally Posted by dc_dux View Post

There is also no hard data that if the rate were to remain the same for top bracket that it would be stimulative in any way...as opposed to extending unemployment insurance, which numerous studies have found results in significant stimulus - nearly $2 for every $1 in UI.
It's also none of Washington's business whether someone's income stimulates the economy or not. Once again, it's that person's money to do what he chooses to do with it. If he wants to emulate Scrooge McDuck, that's his right.
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Old 12-09-2010, 08:50 PM   #66 (permalink)
 
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What difference does it make whether it alters their spending, savings and investment patterns or not? It's that person's money and their right to do what they want with it. If they want to spend it, save it, give it away or just light it on fire, it's none of Washington's business. It's not Washington's money.


It's also none of Washington's business whether someone's income stimulates the economy or not. Once again, it's that person's money to do what he chooses to do with it. If he wants to emulate Scrooge McDuck, that's his right.
So you have abandoned your initial argument that an increase of 3% on the marginal rate would adversely impact the top 2% of taxpayers to the libertarian argument that it is their money to do with as they please.

I would point you to the libertarian icon, Adam Smith in the Wealth of Nations:
Quote:
The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion
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Old 12-10-2010, 03:11 AM   #67 (permalink)
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So you have abandoned your initial argument that an increase of 3% on the marginal rate would adversely impact the top 2% of taxpayers to the libertarian argument that it is their money to do with as they please.

I would point you to the libertarian icon, Adam Smith in the Wealth of Nations:
No. Raising taxes on anyone adversely affects them since they now have less of their money.

I disagree with Adam Smith's concept of punishing people for being successful as well.
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Old 12-20-2010, 09:49 AM   #68 (permalink)
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Even a Keynesian, assuming those who most loudly professes to be have actually read some of what he wrote, should understand the importance of the physiology of confidence in the market. The President countinues to fail in this regard. From Keynes:

Quote:
In abnormal times in particular, when the hypothesis of an indefinite continuance of the existing state of affairs is less plausible than usual even though there are no express grounds to anticipate a definite change, the market will be subject to waves of optimistic and pessimistic sentiment, which are unreasoning and yet in a sense legitimate where no solid basis exists for a reasonable calculation.

So far we have had chiefly in mind the state of confidence of the speculator or speculative investor himself and may have seemed to be tacitly assuming that, if he himself is satisfied with the prospects, he has unlimited command over money at the market rate of interest. This is, of course, not the case. Thus we must also take account of the other facet of the state of confidence, namely, the confidence of the lending institutions towards those who seek to borrow from them, sometimes described as the state of credit. A collapse in the price of equities, which has had disastrous reactions on the marginal efficiency of capital, may have been due to the weakening either of speculative confidence or of the state of credit. But whereas the weakening of either is enough to cause a collapse, recovery requires the revival of both. For whilst the weakening of credit is sufficient to bring about a collapse, its strengthening, though a necessary condition of recovery, is not a sufficient condition.
Economist's View: Keynes on Credit and Confidence
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Old 12-20-2010, 11:24 PM   #69 (permalink)
 
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Originally Posted by aceventura3 View Post
Even a Keynesian, assuming those who most loudly professes to be have actually read some of what he wrote, should understand the importance of the physiology of confidence in the market. The President countinues to fail in this regard. From Keynes:

Economist's View: Keynes on Credit and Confidence
This, from a guy who continues to insist (in other discussions) that trickle down, supply side (or voodoo economics) works.
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