@DontTreadOnMe,
DontTreadOnMe wrote:
cjhsa wrote:
You guys are conveniently forgetting the all important Joe the Plumber small, incorporated business owner. At 39% personal income taxes, after they've paid their corporate taxes, are getting up into the 80%+ tax rate.
can't stand the heat, get out of the kitchen.
sure, everyone has the right to set out on their own. but the world doesn't guarantee that you will get rich doing it.
at least for me, the whole point was to be my own boss. it was a coin toss as to whether or not i'd make any money at all, never mind get rich.
previous experience told me that in most cases, a small business is most likely to see both depending on what day it was.
and, that if you have a small business that is giving you in excess of $250,000 dollars a year below the line, you would be one of the few.
I represent another small business, one that currently grosses a lot under $250,000. (Hubby and I are semi-retired and have been ratcheting it it down over the last couple of years.) My business happens to put me in the position of seeing a lot of P & Ls and bottom lines of businesses all over the area. (I used to travel all of New Mexico and a big chunk of Texas.)
New Mexico is a relatively low income state and average wages, in comparison with other places, are less than in most states. But it is a rare small business that employs very many people that isn't grossing well over $500,000 and most are closer to a million or more. As you know, a business, whether sole proprietor, LLC, or Corporation can reduce its taxable income only by direct expensing meaning that it has to pay it out in salaries, inventory, necessary operating expenses, equipment and infrastructure. (The latter two are usually depreciated and can't be deducted as expense in a single year.)
So. . . . many if not most small businesses around here are very likely to have more than $250,000 as a bottom line by the end of the year. They don't want to increase inventory before the first of the year because they'll be taxed on that. If they pay it out in salaries, those receiving the salaries are taxed (including the owners if most goes to them) and it won't be available for new inventory or investment. But if they don't spend it, they are likely to be over the $250,000 threshhold and therefore subject to the higher taxes which reduces their ability to acquire inventory, invest to expand, hire new people, etc.
I certainly don't intentionally talk politics when I make my rounds, but the few business owners who have volunteered the information have all said they're voting for McCain.
The employees of course probably mostly favor Obama who is promising them a virtual utopia at no cost to them while finally getting those rich business owners--you know, the ones who take all the risks and put in the time to create jobs for the others--they'll finally have to give up some of all that lovely money because it isn't fair that they have so much more than the people who work for them.
Time will tell of course how it will all shake out. But I have long believed that you cannot punish the rich for their success without hurting the poor.
