Geithner: Taxes on ‘Small Business’ Must Rise So Government Doesn’t ‘Shrink’

[saveliberty]

and this in a nutshell is why obamanomics is an epic job destroying fail:

treasury secretary timothy geithner told the house small business committee on wednesday that the obama administration believes taxes on small business must increase so the administration does not have to “shrink the overall size of government programs.”

the administration’s plan to raise the tax rate on small businesses is part of its plan to raise taxes on all americans who make more than $250,000 per year—including businesses that file taxes the same way individuals and families do.

N came in an exchange with first-term rep. Renee ellmers (r.-n.c.). Ellmers, a nurse, decided to run for the u.s. House of representatives in 2010 after she became active in the grass-roots opposition to president barack obama’s proposed health-care reform plan in 2009.

“overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring,” ellmers told geithner. “they just simply cannot.”

she then challenged geithner on the administration’s tax plan.

“looking into the future, you are supporting the idea of taxation, increasing taxes on those who make $250,000 or more. Those are our business owners,” said ellmers.

Geithner initially responded by saying that the administration’s planned tax increase would hit “three percent of your small businesses.”

ellmers then said: “sixty-four percent of jobs that are created in this country are for small business.”

geithner conceded the point, but then suggested the administration’s planned tax increase on small businesses would be “good for growth.”

“no, that's right. I agree with that,” said geithner. “but just to put it in perspective, it's important to recognize why are we doing this. You know, our deficits are 10 percent of gdp, higher than they've been since any time in the postwar period really. We have a big hole to dig out of, and we have to figure out how to do that in a way that's balanced, good for growth, fair to people as a whole.”

geithner, continuing, argued that if the administration did not extract a trillion dollars in new revenue from its plan to increase taxes on people earning more than $250,000, including small businesses, the government would in effect “finance” what he called a “tax benefit” for those people....

geithner: Taxes on

good to restate this. Now as to why it will not work, just look at michigan who used a similiar mindset nine years ago. We are top ten in every negative economic indicator.

unions

That and Democratic leadership in state government. Unions didn't pass all the regulation and tax increases.

 

[iamwhatiseem]

Overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring

That's what they are telling ya.

But they are lying.

Lack of demand is the only thing that keeps a business from hiring. You do realize all costs from salaries and benefits are not what business gets taxed on.

What?
Employee benefits and employee taxes are a HUGE expense for businesses. Lack of demand is not the only thing that keeps businesses from hiring, of course it is the principle reason - but as a b2b businessman I can tell you from experience that in the last few years people are not hiring because:

1) They realized they can operate with fewer employees.
2) They are totally insecure of what lies ahead one month from now let alone a few years.
3) There is a significant belief of "impending doom" just around the corner and no one sees anything that is going to change that fear.

I say to you - that these three reasons, today, are equal to a lack of demand as to why no one is hiring.

No one wants to hire someone only to have to let them go when the bottom drops out.

 

[chikenwing]

Overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring

That's what they are telling ya.

But they are lying.

Lack of demand is the only thing that keeps a business from hiring. You do realize all costs from salaries and benefits are not what business gets taxed on.

What?
Employee benefits and employee taxes are a HUGE expense for businesses. Lack of demand is not the only thing that keeps businesses from hiring, of course it is the principle reason - but as a b2b businessman I can tell you from experience that in the last few years people are not hiring because:

1) They realized they can operate with fewer employees.
2) They are totally insecure of what lies ahead one month from now let alone a few years.
3) There is a significant belief of "impending doom" just around the corner and no one sees anything that is going to change that fear.

I say to you - that these three reasons, today, are equal to a lack of demand as to why no one is hiring.

No one wants to hire someone only to have to let them go when the bottom drops out.

Right on the money!!

 

[boedicca]

Oh and this is nothing really, they would like nothing more than to raise taxes on the middle class, they surfaced it back last year, the VAT etc. because they know the middle class is where the money's at, just thank your lucky stars the reps took the house.....

They really are intent on lowering living standards for the Hoi Poloi so that more of income can be transferred to the permanent bureaucracy of the government.

 

[boedicca]

*shrugs* they want us to pay for the 24% increase in discretionary spending they ladled out over 2 years and have made part of the baseline funding going forward, its really that simple.

See, you create the prgm. or bloat it, get folks on the hook, then scream that the nastys are ripping the heart out of it.

for anyone requiring a brief on what baseline spending is, its rather simple; execute a bill or refund a prgm., they build in legislatively a rise in its funding automatically year to year to year, every year, say 4%, so when asked to cut, the usual answer is well ok, but really? They don't cut the meat, they just cut down the baseline % and call it savings....The reps last march had their first hack at it and cut a lot of the baselines to zero, but now that the meat of the prgm.s itself is on the table? Forget it…….

And this is why economic growth is grinding to a halt.

Growth in the private sector is largely driven by improved productivity. Successful business seek to improve efficiency on current services and products so they can invest in new ones and expand.

The government is an unwieldy counter force with an opposite approach: to continually do less for more. At this point, the private sector is not able to grow enough to offset this anti-productivity of the government.

 

[boedicca]

Overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring

That's what they are telling ya.

But they are lying.

Lack of demand is the only thing that keeps a business from hiring. You do realize all costs from salaries and benefits are not what business gets taxed on.

Are you nuts? Small businesses pay payroll taxes, sales and use taxes, property taxes, and the costs of compliance for inane government programs. San Francisco has its very own special payroll tax. There is now the threat of ObamaCare fines/taxes (take your pick) to make it even worse.

As you have consistently shown yourself to be a complete economic illiterate, it's not worth explaining to you how much of a small business owner's time and money is taken upon regulatory compliance.

 

[iamwhatiseem]

Overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring

That's what they are telling ya.

But they are lying.

Lack of demand is the only thing that keeps a business from hiring. You do realize all costs from salaries and benefits are not what business gets taxed on.

Are you nuts? Small businesses pay payroll taxes, sales and use taxes, property taxes, and the costs of compliance for inane government programs. San Francisco has its very own special payroll tax. There is now the threat of ObamaCare fines/taxes (take your pick) to make it even worse.

As you have consistently shown yourself to be a complete economic illiterate, it's not worth explaining to you how much of a small business owner's time and money is taken upon regulatory compliance.

You betcha.
Any business over 2-3 employees MUST pay tax lawyers, employee law organizations, payroll companies, accountants etc. etc. etc. - to be SURE you are following regulations. The IRS will not hesitate to put a company in bankruptcy and threaten closure because an owner made a simple mistake when figuring taxes.
Also something the clueless never think about - a company pays sales tax/property tax/etc. etc. - even when the company LOSES money. The government "gets theirs" even when you have nothing to give them.
If a business has to close, and sell it's assets to pay taxes - employees lose their jobs and get unemployent (that might be more that the taxes owed btw) - then so be it. The IRS shutters businesses everyday for back taxes.
The government considers it FAAAAR more important that they get every penny "owed" to them than keeping people employed.

 

[saveliberty]

Geithner gets fired. The bonus plan of replacing Obama in 2012.

 

[skookerasbil]

Of course, it'd never pass...........but God Bless this idiot Geitner. I'd absolutely support higher taxes on small business in the short run as the economy would implode in short order.............thus, we could make these lefties a museum display in a big glass case propped up as a relic of a former era.

This is exactly why every other economist has left this administration. The people in there now are so beyond gone its hysterical........the only people who think like they do are the real hyper-k00ks.

 

[sparky]

timely thread in light of the 2nd 1/4 comming up ....

 

[Robert]

Of course, it'd never pass...........but God Bless this idiot Geitner. I'd absolutely support higher taxes on small business in the short run as the economy would implode in short order.............thus, we could make these lefties a museum display in a big glass case propped up as a relic of a former era.

Would be great if it didn't take the rest of us with them....

 

[boedicca]

That's what they are telling ya.

But they are lying.

Lack of demand is the only thing that keeps a business from hiring. You do realize all costs from salaries and benefits are not what business gets taxed on.

Are you nuts? Small businesses pay payroll taxes, sales and use taxes, property taxes, and the costs of compliance for inane government programs. San Francisco has its very own special payroll tax. There is now the threat of ObamaCare fines/taxes (take your pick) to make it even worse.

As you have consistently shown yourself to be a complete economic illiterate, it's not worth explaining to you how much of a small business owner's time and money is taken upon regulatory compliance.

You betcha.
Any business over 2-3 employees MUST pay tax lawyers, employee law organizations, payroll companies, accountants etc. etc. etc. - to be SURE you are following regulations. The IRS will not hesitate to put a company in bankruptcy and threaten closure because an owner made a simple mistake when figuring taxes.
Also something the clueless never think about - a company pays sales tax/property tax/etc. etc. - even when the company LOSES money. The government "gets theirs" even when you have nothing to give them.
If a business has to close, and sell it's assets to pay taxes - employees lose their jobs and get unemployent (that might be more that the taxes owed btw) - then so be it. The IRS shutters businesses everyday for back taxes.
The government considers it FAAAAR more important that they get every penny "owed" to them than keeping people employed.

At my small company, one of the sales reps did a tiny deal for a federal agency. Due to that, we have had to go through an excruciating and expensive contractor compliance audit. They found absolutely nothing wrong, but that audit cost us 10 times more in legal and accounting fees that the revenue we received.

Never again. We will not renew the deal.

 

[saveliberty]

I won't touch government projects. I get requests for bids four or five times a year. The only way I'd touch one is as a sub paid by the contractor.

 

[chikenwing]

I won't touch government projects. I get requests for bids four or five times a year. The only way I'd touch one is as a sub paid by the contractor.

We don't get involved with Gov. projects for that reason,but still I have to fill out quarterly reports on all the work we do for the stone/gravel companies we service,it takes time away from other things,makes us 0 money and see no benefits from doing them.But we have to do them by law.

 

[The T]

That's what they are telling ya.

But they are lying.

Lack of demand is the only thing that keeps a business from hiring. You do realize all costs from salaries and benefits are not what business gets taxed on.

Are you nuts? Small businesses pay payroll taxes, sales and use taxes, property taxes, and the costs of compliance for inane government programs. San Francisco has its very own special payroll tax. There is now the threat of ObamaCare fines/taxes (take your pick) to make it even worse.

As you have consistently shown yourself to be a complete economic illiterate, it's not worth explaining to you how much of a small business owner's time and money is taken upon regulatory compliance.

You betcha.
Any business over 2-3 employees MUST pay tax lawyers, employee law organizations, payroll companies, accountants etc. etc. etc. - to be SURE you are following regulations. The IRS will not hesitate to put a company in bankruptcy and threaten closure because an owner made a simple mistake when figuring taxes.
Also something the clueless never think about - a company pays sales tax/property tax/etc. etc. - even when the company LOSES money. The government "gets theirs" even when you have nothing to give them.
If a business has to close, and sell it's assets to pay taxes - employees lose their jobs and get unemployent (that might be more that the taxes owed btw) - then so be it. The IRS shutters businesses everyday for back taxes.
The government considers it FAAAAR more important that they get every penny "owed" to them than keeping people employed.

And this is why the entire TAX Code must be gutted. Government has become what the Founders didn't want. It has become the Tyranny they shed their blood and fortunes against.

 

[Quantum Windbag]

Well folks, as I've been saying, we need to raise taxes. That is not to say that we do not also need to cut spending. I have no problem with this if there is at least an equal amount of spending cuts attached to any tax increase.

And by the way, while this may hurt a few businesses, most of them will just tack it on as a cost of doing business and raise their prices. Everyone is raising prices right now, so it shouldn't cost them in sales. It is however, going to help to contribute to greater inflationary pressures, and that would be my biggest concern.

That is just what the economy needs, higher prices across the board. While I agree we need to raise taxes in order to get a balanced budget the priority has to be reducing spending. Congress needs to justify every single penny it spends before it talks about raising taxes. Currently they act like they have to justify cutting spending. Why is there any argument about cutting spending on jet engines the Pentagon does not want or need?

 

[Quantum Windbag]

Overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring

That's what they are telling ya.

But they are lying.

Lack of demand is the only thing that keeps a business from hiring. You do realize all costs from salaries and benefits are not what business gets taxed on.

Tell me something genius. How do you increase demand if people are not getting paid?

 

[The T]

Overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring

That's what they are telling ya.

But they are lying.

Lack of demand is the only thing that keeps a business from hiring. You do realize all costs from salaries and benefits are not what business gets taxed on.

Tell me something genius. How do you increase demand if people are not getting paid?

Economics 101.

 

[hortysir]

An unnatural silence from the left in this thread.

MediaMatters must not have sent them their talking points e-mail yet

 

[boedicca]

When one of them accidentally reveals the true agenda, they all try to ignore it, hoping that people won't pay attention.