Republicans LIE about the tax hike hurting small businesses

[Rozman]

I love all these Libs who have such a strong opinion on how a business will be affected by more taxes....

These are people who never had the sweats at night before going to sleep wondering how to meet
payroll.....

You know people who spent their time in government or maybe time as a community organizer..

 

[ogibillm]

I love all these Libs who have such a strong opinion on how a business will be affected by more taxes....

These are people who never had the sweats at night before going to sleep wondering how to meet
payroll.....

You know people who spent their time in government or maybe time as a community organizer..

if you're sweating making payroll the increase wouldn't affect you.

 

[Care4all]

What no one seems to be talking about is the President’s plan addresses only those with incomes below $250,000; every other provision sunsets, if I understand his proposal correctly. He only wants to pass something that affects those making less than $250,000, and not touch anything else. So, how are other provisions of the code to be treated? In 2000, prior to the Bush tax cuts, there were limits on itemized deductions (3% reduction on all income over $128,950 (single) up to 80% of the deductions), the personal exemptions were phased out at relatively low income levels (relative to today), the capital gains rate was 20%, dividends were at ordinary rates. The 4.6% rate increase seems like just one of many new (old) taxes. So the guy making $300,000 that loses $3-4,000 in itemized deductions and 3 or 4 personal exemptions will be hit for not just the $2,300 additional from the 4.6%, but also 39.6% of the $20,000 in lost deductions. Dividend and capital gains would cost even more. It isn't only the small rate increase on ordinary income.

NO.

the couple with 300k in taxable income, will have a hike of 4% on 50k....$2000, that's it.

-Taxable income is after ALL of their allowable deductions are taken.

-ALL, every single tax break given to those couples who makes less than 250k will STILL BE given to the person who makes $300k a year, up to the point of $250k.

So essentially, if ALL the tax breaks were let to expire then not only would the couple earning $300k in taxable income have to pay the $2000 extra, they would also have to pay higher rates for ALL of the money they earned below the $250k!!!

Those wanting to let the tax cuts expire below $250 k would be hurting the ''small business'' even MORE.

People just don't seem to be able to put that all together around here....no one is using their critical thinking skills.....

What the president is calling for, still gives those making over $250k all the tax breaks others receive making less than $250k in taxable income.....up to the point of $250k.

 

[BillyV]

What no one seems to be talking about is the President’s plan addresses only those with incomes below $250,000; every other provision sunsets, if I understand his proposal correctly. He only wants to pass something that affects those making less than $250,000, and not touch anything else. So, how are other provisions of the code to be treated? In 2000, prior to the Bush tax cuts, there were limits on itemized deductions (3% reduction on all income over $128,950 (single) up to 80% of the deductions), the personal exemptions were phased out at relatively low income levels (relative to today), the capital gains rate was 20%, dividends were at ordinary rates. The 4.6% rate increase seems like just one of many new (old) taxes. So the guy making $300,000 that loses $3-4,000 in itemized deductions and 3 or 4 personal exemptions will be hit for not just the $2,300 additional from the 4.6%, but also 39.6% of the $20,000 in lost deductions. Dividend and capital gains would cost even more. It isn't only the small rate increase on ordinary income.

NO.

the couple with 300k in taxable income, will have a hike of 4% on 50k....$2000, that's it.

-Taxable income is after ALL of their allowable deductions are taken.

-ALL, every single tax break given to those couples who makes less than 250k will STILL BE given to the person who makes $300k a year, up to the point of $250k.

So essentially, if ALL the tax breaks were let to expire then not only would the couple earning $300k in taxable income have to pay the $2000 extra, they would also have to pay higher rates for ALL of the money they earned below the $250k!!!

Those wanting to let the tax cuts expire below $250 k would be hurting the ''small business'' even MORE.

People just don't seem to be able to put that all together around here....no one is using their critical thinking skills.....

What the president is calling for, still gives those making over $250k all the tax breaks others receive making less than $250k in taxable income.....up to the point of $250k.

Really? I'd be very interested in seeing the evidence for that; nothing in the President's statements that I have seen are specific enough to come to that conclusion. In fact, it seemed pretty clear that he wouldn't extend any Bush tax cuts to those earning over $250K. That would include any rules that affected phaseouts or deductions. If you have a link to this law that has yet to be written, please post it.

Interesting that you specify "taxable" income, since that would be the amount after the deduction phaseouts; to that extent you may be correct, but it doesn't change the fact that the guy making $300,000 pays more than just the 4.6%.

 

[oldfart]

Let me get this straight... People actually believe a small business owner who gets slammed with higher Taxes isn't going to buckle down and send an employee or two packing? Are you people ******* nuts? What do you think they will do... Tell themselves they have to make sacrifices and continue paying people to work that they can no longer afford to because it is in the best interest of the Socialist collective? I seriously doubt it. ******* people are living in a utopian fantasy world.

I'm always curious about this kind of post. What kind of small business do you run? If anybody out there is an owner or active in management in a small business, what do you think about this argument that owners hire because they have spare cash, rather than because employees generate enough income to pay the costs of their compensation and raise the profitabity of the business a bit?

This joker obviously doesn't know how to run a business and I doubt he has ever tried. I'd like to hear from people who have. And yes, I personally own and operate several small businesses.

 

[oldfart]

I love all these Libs who have such a strong opinion on how a business will be affected by more taxes....

These are people who never had the sweats at night before going to sleep wondering how to meet
payroll.....

You know people who spent their time in government or maybe time as a community organizer..

OK big shot, what kind of business do you run? How many employees do you have? How long have your been in business?

 

[Care4all]

What no one seems to be talking about is the President’s plan addresses only those with incomes below $250,000; every other provision sunsets, if I understand his proposal correctly. He only wants to pass something that affects those making less than $250,000, and not touch anything else. So, how are other provisions of the code to be treated? In 2000, prior to the Bush tax cuts, there were limits on itemized deductions (3% reduction on all income over $128,950 (single) up to 80% of the deductions), the personal exemptions were phased out at relatively low income levels (relative to today), the capital gains rate was 20%, dividends were at ordinary rates. The 4.6% rate increase seems like just one of many new (old) taxes. So the guy making $300,000 that loses $3-4,000 in itemized deductions and 3 or 4 personal exemptions will be hit for not just the $2,300 additional from the 4.6%, but also 39.6% of the $20,000 in lost deductions. Dividend and capital gains would cost even more. It isn't only the small rate increase on ordinary income.

NO.

the couple with 300k in taxable income, will have a hike of 4% on 50k....$2000, that's it.

-Taxable income is after ALL of their allowable deductions are taken.

-ALL, every single tax break given to those couples who makes less than 250k will STILL BE given to the person who makes $300k a year, up to the point of $250k.

So essentially, if ALL the tax breaks were let to expire then not only would the couple earning $300k in taxable income have to pay the $2000 extra, they would also have to pay higher rates for ALL of the money they earned below the $250k!!!

Those wanting to let the tax cuts expire below $250 k would be hurting the ''small business'' even MORE.

People just don't seem to be able to put that all together around here....no one is using their critical thinking skills.....

What the president is calling for, still gives those making over $250k all the tax breaks others receive making less than $250k in taxable income.....up to the point of $250k.

Really? I'd be very interested in seeing the evidence for that; nothing in the President's statements that I have seen are specific enough to come to that conclusion. In fact, it seemed pretty clear that he wouldn't extend any Bush tax cuts to those earning over $250K. That would include any rules that affected phaseouts or deductions. If you have a link to this law that has yet to be written, please post it.

Interesting that you specify "taxable" income, since that would be the amount after the deduction phaseouts; to that extent you may be correct, but it doesn't change the fact that the guy making $300,000 pays more than just the 4.6%.

Billy, just think about it....we have a tax system that goes by income tax brackets.....it's the ONLY way it could be done....obama is NOT changing the entire tax system for these people only and making it a FLAT tax.....he is allowing the tax rate for the upper income BRACKET or the upper 2 BRACKETS of income, to expire and return to the taxable rate it was previous to the Bush tax cuts.....THIS is only for the income in those brackets, all income below those brackets are taxed at the rate that ALL OTHERS get taxed for the income in those brackets.....

so the upper or upper 2 tax BRACKETS will revert to the 39+% rate, but all taxable income below that amount benefits from the Bush Tax cuts left in place....Like I have said, it is the ONLY way it can work with out tax system.

smallbusiness.yahoo.com/advisor/blogs/smallbiz-vote/eliminating-taxcuts-high-earners-bad-small-business-215952166.html

 

[oldfart]

the couple with 300k in taxable income, will have a hike of 4% on 50k....$2000, that's it.... Everyery single tax break given to those couples who makes less than 250k will STILL BE given to the person who makes $300k a year, up to the point of $250k.

This is correct.

So essentially, if ALL the tax breaks were let to expire then not only would the couple earning $300k in taxable income have to pay the $2000 extra, they would also have to pay higher rates for ALL of the money they earned below the $250k!!!

This is not correct. The starting point is the the sunset provisions of the 2001 and 2003 Tax Acts which expire at the end of December. At that point with a few minor exceptions, The tax law will revert to what it was in 2000. This means that the rate structure reverts to the Clinton era rates (the 10% bracket is folded back into the 15% bracket, the rates increase so the highest is 39.6%, and so forth. The capital gains rate returns to 20% and dividends will be taxed as ordinary income rather than capital gains, and the carried interest rule beloved of hedge fund and equity managers will disappear. The child tax credit will be cut in half and the earned income credit reduced. Pease and PEP will come back and the marriage penalty will re-emerge. The number of taxpayers subject to the alternative minimum tax will increase from 4 million to 30 million. A host of targeted credits will expire.

These changes would effect almost every taxpayer adversely. The Senate bill would make permanent many of the changes for taxpayers making above $250k as well as those below, like PEP, Peae and marriage penalty relief. The only notable exception would be that tax rates on the marginal income in excess of $250k would be subject to the old rates. So a millionaire would still have a few thousand taxed at 10%, some at 15% and so forth. Thus the Senate bill provides virtually all taxpayers with some tax relief.

My source is Taxwerks, a firm that the IRS has approved for continuing education for tax professionals.

 

[Care4all]

the couple with 300k in taxable income, will have a hike of 4% on 50k....$2000, that's it.... Everyery single tax break given to those couples who makes less than 250k will STILL BE given to the person who makes $300k a year, up to the point of $250k.

This is correct.

So essentially, if ALL the tax breaks were let to expire then not only would the couple earning $300k in taxable income have to pay the $2000 extra, they would also have to pay higher rates for ALL of the money they earned below the $250k!!!

This is not correct. The starting point is the the sunset provisions of the 2001 and 2003 Tax Acts which expire at the end of December. At that point with a few minor exceptions, The tax law will revert to what it was in 2000. This means that the rate structure reverts to the Clinton era rates (the 10% bracket is folded back into the 15% bracket, the rates increase so the highest is 39.6%, and so forth. The capital gains rate returns to 20% and dividends will be taxed as ordinary income rather than capital gains, and the carried interest rule beloved of hedge fund and equity managers will disappear. The child tax credit will be cut in half and the earned income credit reduced. Pease and PEP will come back and the marriage penalty will re-emerge. The number of taxpayers subject to the alternative minimum tax will increase from 4 million to 30 million. A host of targeted credits will expire.

These changes would effect almost every taxpayer adversely. The Senate bill would make permanent many of the changes for taxpayers making above $250k as well as those below, like PEP, Peae and marriage penalty relief. The only notable exception would be that tax rates on the marginal income in excess of $250k would be subject to the old rates. So a millionaire would still have a few thousand taxed at 10%, some at 15% and so forth. Thus the Senate bill provides virtually all taxpayers with some tax relief.

My source is Taxwerks, a firm that the IRS has approved for continuing education for tax professionals.

i agree, but isn't that what i said, only not as well said as you?

and i thought billy was refuting.... that if obama ONLY lets the tax increase apply on income in the upper 2 tax brackets or upper bracket, (not certain if it is the highest income bracket or the 2 highest income brackets that he wants to let expire?) then ONLY the taxable income falling in to those brackets is taxed at the higher rate of 39.5% vs 35%, NOT all of the money these couples earned in all of the income brackets below the 250k if the other tax cuts stay in effect....

tongue twister 4 sure! hahahahaha

i'll try again oldfart...
IF obama gets his way, the taxable income earned ABOVE $250k for a couple would be taxed at 39.5% instead of 35%, correct? But the income this couple earned below the taxable $250k would fall in to the tax rates that Bush had, for each of those income brackets below the $250k, IF those tax cuts are kept in place....right?

 

[ilia25]

Broken window fallacy seizes to be a fallacy in a depressed economy, when you have a lot of idle production capacity.

Complete and utter bullshit. You have nothing to back that up.

You are an idiot. The broken window fallacy claims that breaking window does not improve the economy because it is already humming at full throttle, and production can be increased in one area only by crowding out the output in another.

But when the economy is in depression there is a lot of idle capacity, so the output can be increased by employing those idle resources -- w/o crowding out anything else.

 

[GHook93]

John Boehner:
"In my view, raising taxes on the so-called top 2 percent, half of those taxpayers are small-business owners that pay their taxes through their personal income filing every year... you're not going to grow the economy if you raise the top 2 percent rates. It'll hurt small businesses, and it'll hurt our economy..."

But the truth is that a personal tax hike does NOT hurt the small business, because only the company profits are counted as the owner's income and are taxed accordingly -- not the whole revenue. So the tax hike only penalizes those appropriating more than 250,000 of their company revenue. It has no effect on the business solvency -- quite the opposite, it encourages the owner to spend more revenues on expanding their business.

So the question is not whether Boehner treats Americans as a bunch of illiterate fools -- he obviously does.

The question is whether he will get away with it -- again.


See also:
Small Business tax myths: Most firms are not affected by Obama tax proposals. - Slate Magazine

Guess you don't understand flow through taxation!!!

 

[BillyV]

the couple with 300k in taxable income, will have a hike of 4% on 50k....$2000, that's it.... Everyery single tax break given to those couples who makes less than 250k will STILL BE given to the person who makes $300k a year, up to the point of $250k.

This is correct.

So essentially, if ALL the tax breaks were let to expire then not only would the couple earning $300k in taxable income have to pay the $2000 extra, they would also have to pay higher rates for ALL of the money they earned below the $250k!!!

This is not correct. The starting point is the the sunset provisions of the 2001 and 2003 Tax Acts which expire at the end of December. At that point with a few minor exceptions, The tax law will revert to what it was in 2000. This means that the rate structure reverts to the Clinton era rates (the 10% bracket is folded back into the 15% bracket, the rates increase so the highest is 39.6%, and so forth. The capital gains rate returns to 20% and dividends will be taxed as ordinary income rather than capital gains, and the carried interest rule beloved of hedge fund and equity managers will disappear. The child tax credit will be cut in half and the earned income credit reduced. Pease and PEP will come back and the marriage penalty will re-emerge. The number of taxpayers subject to the alternative minimum tax will increase from 4 million to 30 million. A host of targeted credits will expire.

These changes would effect almost every taxpayer adversely. The Senate bill would make permanent many of the changes for taxpayers making above $250k as well as those below, like PEP, Peae and marriage penalty relief. The only notable exception would be that tax rates on the marginal income in excess of $250k would be subject to the old rates. So a millionaire would still have a few thousand taxed at 10%, some at 15% and so forth. Thus the Senate bill provides virtually all taxpayers with some tax relief.

My source is Taxwerks, a firm that the IRS has approved for continuing education for tax professionals.

i agree, but isn't that what i said, only not as well said as you?

and i thought billy was refuting.... that if obama ONLY lets the tax increase apply on income in the upper 2 tax brackets or upper bracket, (not certain if it is the highest income bracket or the 2 highest income brackets that he wants to let expire?) then ONLY the taxable income falling in to those brackets is taxed at the higher rate of 39.5% vs 35%, NOT all of the money these couples earned in all of the income brackets below the 250k if the other tax cuts stay in effect....

tongue twister 4 sure! hahahahaha

i'll try again oldfart...
IF obama gets his way, the taxable income earned ABOVE $250k for a couple would be taxed at 39.5% instead of 35%, correct? But the income this couple earned below the taxable $250k would fall in to the tax rates that Bush had, for each of those income brackets below the $250k, IF those tax cuts are kept in place....right?

I wasn't refuting the tax brackets below $250,000 would change for any taxpayer; just that the tax policies for income over $250,000 were likely to revert to pre-Bush tax cuts rules. PEP and Pease, as was stated above, will likely remain for high income taxpayers (PEP being personal exemption phaseout and Pease being the limits on itemized deductions both of which I had previously referenced).

The president proposes to allow both PEP and Pease to resume for high-income taxpayers in 2013 but would markedly change the income levels above which the provisions apply. The threshold for the phaseouts would begin at 2009 levels of $250,000 for couples*and $200,000 for other taxpayers, with both values indexed for inflation. TPC estimates that 2013 thresholds would be $261,450 for couples, $209,150 for single filers, $235,300 for heads of household, and $130,725 for couples filing separately. Personal exemptions would thus phase out at incomes between $261,450 and $383,950 for joint filers, between $209,150 and $331,650 for single filers, and between $235,300 and $357,800 for heads of household.**Taxpayers would have their itemized deductions reduced in 2013 by 3 percent of their income over the same thresholds but not by more than 80 percent. Both phaseouts would increase marginal tax rates for taxpayers in the affected income ranges. The increase would jump irregularly for PEP, depending on the number of exemptions a taxpayer claims. Pease would increase the marginal tax rate of affected taxpayers by 3 percent of their bracket rate: 36 percent would go to 37.08 percent, and 39.6 percent would rise to 40.79 percent.
TPC Tax Topics | 2012 Budget - PEP and Pease

The bottom line is that the changes in the tax code for high income taxpayers will not be limited to the simple 36% and 39.6% additional brackets as seemed to have been the general consensus of the posts in this thread.

 

[oldfart]

that if obama ONLY lets the tax increase apply on income in the upper 2 tax brackets or upper bracket, (not certain if it is the highest income bracket or the 2 highest income brackets that he wants to let expire?) then ONLY the taxable income falling in to those brackets is taxed at the higher rate of 39.5% vs 35%, NOT all of the money these couples earned in all of the income brackets below the 250k if the other tax cuts stay in effect....

It's the top two brackets which would be 39.6% and 36%. This really hits the very high income taxpayers most. Limiting deductions (the Republican plan) favors those highest income taxpayers at the expense of people who only make $400k or so. Think of it as Wall Street types throwing the real small businessmen under the bus.

tongue twister 4 sure! hahahahaha

I'm bilingual, I speak English and Codese. One famous IRS ruling took seven pages to state why a cow and a bull were not "similar in function or purpose".

 

[Toronado3800]

that if obama ONLY lets the tax increase apply on income in the upper 2 tax brackets or upper bracket, (not certain if it is the highest income bracket or the 2 highest income brackets that he wants to let expire?) then ONLY the taxable income falling in to those brackets is taxed at the higher rate of 39.5% vs 35%, NOT all of the money these couples earned in all of the income brackets below the 250k if the other tax cuts stay in effect....

It's the top two brackets which would be 39.6% and 36%. This really hits the very high income taxpayers most. Limiting deductions (the Republican plan) favors those highest income taxpayers at the expense of people who only make $400k or so. Think of it as Wall Street types throwing the real small businessmen under the bus.

tongue twister 4 sure! hahahahaha

I'm bilingual, I speak English and Codese. One famous IRS ruling took seven pages to state why a cow and a bull were not "similar in function or purpose".

I think we need to take a peek at who is a small business. What.does the average McDonalds franchise owner clear on a store in a year? The guy who runs the independent hot rod shop up the road? Does he make 250k a year?

 

[eflatminor]

Broken window fallacy seizes to be a fallacy in a depressed economy, when you have a lot of idle production capacity.

Complete and utter bullshit. You have nothing to back that up.

You are an idiot. The broken window fallacy claims that breaking window does not improve the economy because it is already humming at full throttle, and production can be increased in one area only by crowding out the output in another.

But when the economy is in depression there is a lot of idle capacity, so the output can be increased by employing those idle resources -- w/o crowding out anything else.

Okay, you're right. Everybody, go outside and destroy something that's not yours. It'll be good for the economy!

 

[Koios]

that if obama ONLY lets the tax increase apply on income in the upper 2 tax brackets or upper bracket, (not certain if it is the highest income bracket or the 2 highest income brackets that he wants to let expire?) then ONLY the taxable income falling in to those brackets is taxed at the higher rate of 39.5% vs 35%, NOT all of the money these couples earned in all of the income brackets below the 250k if the other tax cuts stay in effect....

It's the top two brackets which would be 39.6% and 36%. This really hits the very high income taxpayers most. Limiting deductions (the Republican plan) favors those highest income taxpayers at the expense of people who only make $400k or so. Think of it as Wall Street types throwing the real small businessmen under the bus.

tongue twister 4 sure! hahahahaha

I'm bilingual, I speak English and Codese. One famous IRS ruling took seven pages to state why a cow and a bull were not "similar in function or purpose".

I think we need to take a peek at who is a small business. What does the average McDonalds franchise owner clear on a store in a year? The guy who runs the independent hot rod shop up the road? Does he make 250k a year?

It's all over the map, since not all McDonald's franchises are equal. But if what the President urges passes, which it will, here's the extra tax the onwer will pay on his personal income from the business:

Takes home $250,000 / year: $0

Takes home $400,000 / year: ~$8,000 - $10,000 (increase in effective rate = 2.5%)

Takes home $550,000 / year: ~16,000 - $20,000 (increase in effective rate = 3.6%)

Takes home $1 million / year: ~$50,000 (increase in effective rate = 5%)

Not a picnic, but neither is it a deal buster, nor even close to that. And we have debt that needs paying down, which has to come from somewhere.

Welcome to the real world.

 

[LordBrownTrout]

Tax increase will be passed on to consumer.

 

[Koios]

Tax increase will be passed on to consumer.

No. They never are. Products are priced to sell in pursuit of more profit, which translates to more net profit at every income level.

The only taxes that do affect net consumer prices, are the regressive sales taxes and fees at state level, which have risen sharply to compensate for lower payments back to states that have resulted from lower FIT taxes.

 

[ilia25]

Okay, you're right. Everybody, go outside and destroy something that's not yours. It'll be good for the economy!

You know, you don't need to destroy anything to start spending more

 

[eflatminor]

Okay, you're right. Everybody, go outside and destroy something that's not yours. It'll be good for the economy!

You know, you don't need to destroy anything to start spending more

And clearly, how I spend my money should be your decision...