Obama claims that his plan would only hurt 3% of small businesses. But this is highly deceptive. He isn’t lying, but the reports that he cites mean something very specific. They do not mean that 97% of small businesses won’t see higher taxes under Obama’s plan than they see today. Nor do they mean that these businesses would not see higher taxes under Obama’s plan than under McCain’s plan. All the statistic means when is that most businesses would not see higher taxes under Obama’s plan than they would see if the Bush Tax Cuts expire as they are scheduled to do in 2011, absent any new vote on them.
So, the statistic just means Obama’s plan isn’t an even bigger tax hike for most businesses than one which we can choose to introduce in 2011 by not renewing the current tax levels.
But Obama implies that he is extending enough of the Bush Tax Cuts that compared to them, he would not be raising taxes on 97% of business.But this isn’t the case. About 35% of small businesses would likely see a tax hike under Obama’s plan compared to the rates they face today. Comparing the Obama plan with the Bush tax cuts that are currently in place, those small businesses with incomes in the top quintile and especially in the top 5% had higher average marginal rates. A disproportionate number of businesses fall into that category. For those few at the very top, the rates would be even more punitive.
It’s important to remember who the entrepreneurs are that would face higher taxes. These taxes hurt those – like famous Joe the Plumber – who wish to become successful, and they hurt different individuals each year. Each year new entrepreneurs fit this “rich” category as they climb the ladder of business success, maybe hoping one day to no longer file a 1040, but actually incorporate the business. But Obama would punish every success along the way, in order to “spread the wealth around.”
Obama would be instituting a major redistribution from successful entrepreneurs to unsuccessful ones, and any claims otherwise are simply dishonest.
The issues related to the impact of tax increases or redistribution is more complex than your analysis. Currently we face a huge budget deficit and this cannot be financed by inflation (printing of money) or tax decreases. At this point in the economic cycle the only solution is a tax increase.
I love the reasoning that the only economic solution to debt is more taxes. This is like saying, I have more expenses so I'll just ask my boss for more money. First, you look at expenses and cut, cut, cut! Let's face it, there's a lot of fat in government. Last month they added an extra 9,000 jobs while every other category lost jobs! The government is out of control with spending and that's our first objective. Cut the fat, cut a little meat, and quit asking the American public for more of their piece of the pie.
I agree wholeheartedly with Sue. In addition, there is also ample evidence to indicate that cutting taxes has two positive results: increased economic growth (jobs, GDP, personal income) and increased revenue to the government. While I am not a fan of more revenue going to government, in the context of economic growth it is unavoidable. The goal should be to make sure that those in Washington are better stewards of what they confiscate from the citizenry.
I agree with Sue from NY.
The Federal Government has grown to levels never before seen in the history of this nation. The problem I have with this is that most of the spending can be looked at as unconstitutional. America needs leaders right now that realize that entitlement programs at all federal levels need to be drastically cut or eliminated completely. Then and only then will we get America back on the road to fiscal responsibility.
You don't make the poor richer by making the rich poorer. Socialism is the philosophy of failure, the creed of ignorance and the gospel of envy. The inherent vice of capitalism is the unequal sharing of blessings; the inherent vice of socialism is the equal sharing of miseries. Some regard private enterprise as if it were a predatory tiger to be shot. Others look upon it as a cow that they can milk. Only a handful see it for what it really is – the strong horse that pulls the whole cart.
Socialism promotes no incentive to work harder, or even to work at all. This is not a benefit to our economy. I'm not against improvement of any class whether it be low income, middle income, etc. But redistribution of wealth is not the answer. I agree with those who, in their posts, pointed out the excessive spending in the federal government. How about leaving the tax rates alone, cut that excessive government spending, and give that money to those they seek votes from? No. Of course not. Cuts in spending is the responsible thing to do. The "tax the rich" approach will eventually become the "tax the somewhat rich"… then "tax the not so rich"…