While having a conversation with one of my high end clients recently, we started talking about taxes. I will state u front that he is NOT in the 95% that one candidate claims won't be affected by tax increases... he is a top earner. He wasn't born rich... he made it himself.
This is what the conversation about tax increases came to...
If the tax increases that Obama has stated he wants come to pass, he will HAVE to cut his staff.
That means that the increased taxes will cost jobs. He is actually looking at an expansion, but because of the uncertainty in the credit markets, and the uncertainty about future taxes, he has those plans on hold. Those are jobs that aren't being created...
So, one or two of his three personal assistants my not have a job next year. He may not be hiring 50-75 new employees next year because of taxes. That seems to me that it WILL have an effect on more than just the top 5% of income earners.
But what about the Capital Gains Tax reduction?
That is just a joke. His companies don't pay him Capital Gains... He is an owner, and his income is income. If you don't think that the politicians know this , you are wrong. The "Capital Gains Cut" that some are touting to help small business is an empty sham...
But the big problem is this... 70% of people work for small businesses. Those small businesses are generally taxed on personal tax forms. While they are incorporated, as am I, they are often Sub S Corporations... and report income on the owner(s) tax forms. Simply put, those "Rich People" are the ones that create and hold the VAST majority of jobs. If you cripple them, you cripple EVERYONE.
And remember, one candidate has voted to increase taxes repeatedly... and against tax cuts. And that isn't just for the rich, that is for people making as little as $42k/year.
And just so you know, while taxes have been cut across the board during the last seven years, revenues to the government have been at record high levels. The deficit problem in DC hasn't been because of tax cuts... they spurred the economy and brought in more revenue... the problem has been spending. And if you think that after proposing $1trillion in new spending that having a Democrat Congress AND White House is going to slow that, think again.
Unless otherwise noted, all content of this blog is the property of Lane Bailey, ©2012 Lane Bailey.
I'd love to hear from you...
Hi Lane
Raising taxes at this time is not a very good ideal, we need to create jobs in the country which will create more taxes.
Good luck and success
Lou Ludwig
I think all the politicians ned a good course in economics 101. ANd Bernanke needs a muzzle and needs to quit lowering the interest rates or Japan here we come.
Question: if I was 'rich' last year and phased out of almost every deduction but this year I am poor, can I go back and get my excess income taxes paid when I was 'rich'? Anyone else feel like the tax code takes the rungs out of the ladder between middle class and upper class?
This is very true.
Caution: blanket statement that will upset some people
What most Democrats and other employee mindset people don't see is that the tax on the so called "rich" and on businesses will hurt them more by providing fewer jobs and by creating more businesses that are less enabled to deal with global competition. It's just taking that next step in your thinking to see the benefits, which is what most people can't do. They can't see how raising taxes on the "rich" and on businesses will hurt them because it's a multi-step thinking process. The only thing that most people can understand is cut taxes for me = good. Raise taxes for someone else = good. Cut taxes for business and "rich" people = bad because they have lots of money.
Small businesses do not hire lobbyists and make huge bribes contributions to politicians.
Tax laws are written by the lobbyists for large corporations. That's why tax laws favor this group or that.
Just follow the money.
Lane, me, me,me, this is what most people think about. Not where it is coming from...it's been bad enough the last 2 years when the public voted for change in a new Congress and Senate.
After our huge $700 bailout and its effect it will have on our economy and our tax payers, Im sure changes will have to be made to salaries and jobs including the people on Wall Street as well as main street! But there are other ways of cost cutting besides layoffs- how about cutting his own salary? He sounds like he got a good biz with a very good salary!
I remember hearing that small businesses who make less than $250K would be exempt from paying extra taxes as discussed in the recent debates?! Im reading generalizations in this post about "rich" and "middle class"? just where are their income lines that you are discussing in this post Lane?
Lou - Raising taxes will decrease revenues... and cost jobs. Bad idea.
June - Many politicians know the right info... but it doesn't help their cause. Obama knows that raising taxes won't increase revenues, but he also know that many people want to "make those rich people pay" even if it costs them THEIR job.
DM - I don't think that the IRS knows what the tax codes say...
Jared - Obama is banking on that misinformation.
Lenn - Following the money can be hard... but it leads back to Congress not doing the right thing.
Missy - A lot of people just can't wrap their heads around the nose-dive the economy has done in the last two years... and that can't all be blamed on one guy.
Stephen - He makes WAY more than $250k. And there are hundreds of people that rely on him to keep their jobs. Does he not deserve a better return on his investment than he could get from a savings account?
Obama has voted to increase taxes on people with incomes as low as $42k. He has NEVER voted to lower taxes to anyone. Ever. At least not in the US Senate. He promised to... but hasn't. Bill Clinton promised a middle class tax cut when he was elected in 1992... didn't do it until Congress put one through to him under GOP control. I don't think that Obama will lower taxes for ANYONE.
Smoke and mirrors. I talked to a lady from Chicago today, and I asked how Obama get elected to the senate without any opposition. She said that it was the most amazing thing and the media really didn't seem to want to discuss it. The Republican candidate was taken out by an old sex scandel that his ex-wife disclosed at the last minute. The Democrat opponent dropped out without any real fanfare. it smell like a rat to me.
Somebody went to extremes to make sure he was elected.
I am all in favor of lower taxes and smaller government if I ever want unemployment to go up it is in Washington.
In general - it is always hard to see through the rhetoric and understand who taxes will affect and what will cost more. As a general rule - more taxes means someone is paying more money. Are you sure it isn't you? A tax increase is just a raise for the government. Don't they have enough money already? Just like us - they should learn to do more with what they have!
I heard Ann Coulter this morning say, we need to stop saying rich and poor, in discussing taxes, but liberalism vs conservatism. That debate was terrible. :(
Missy are you equating rich and poor with liberalism vs conservatism? pls explain?
An owner doesn't HAVE TO cut jobs because theior taxes go up. Gee, maybe they could cut their salary or benefits or bonuses instead. I am so tired of hearing that argument, that higher taxes on the higher income people will cut jobs. Only if they are greedy!
I'm a small business owner, and my income (for my whole business) isn't anywhere near the $250,000 mark. I'm voting for Obama.
Larry - The Chicago machine is STRONG and sits squarely on the left...
Terry - I think there I owuld love to see a lot of people out of work in DC... It would make the rest of the country thrive.
Bo - Collections have been up for most of the Bush years... the pie got bigger, and even thought the slice was smaller for the government, it was still more pie. If they had controlled spending...
Missy - The Democrats NEED to play the class warfare card. It is one of the strongest in their deck.
Stephen - No, in terms of why we tax, we need to debate the liberal view of taxation v. the conservative view. The debate on class as pushed by the Democrats WILL destroy the country. We are fast approaching the point where more than 50% of voters will not pay taxes. At that point, taxation will cause a revolution... Currently, the bottom 50% pay 3% of the taxes and earn 17% of the income. What happens when they vote (as a majority) to tax the "rich" into oblivion? The country will unwind as it collapses economically. That seems to be the goal of the Democrats.
Leslie - And you don't have to charge x% to sell a house. But, the fact of the matter is that he already pays OVER 50% of his income in state, federal and local taxes. That doesn't include property and sales taxes. When you include ALL of the taxes he pays (not including embedded taxes... a whole different subject) it approaches 60%. When he makes $100, various government come in and take $60 from him directly. According to a Yale study, 23% of what is left is taxes that indirectly raise the cost of goods and services... that would be for EVERYONE. That means that on some level, almost $3 of every $4 he makes go out in taxes... That is disgusting.
Feel free to vote for Obama. Know that he is NOT telling the truth about his taxation history. Also know that he KNOWS that the effect of increasing taxes on "the wealthiest Americans" will NOT increase revenue to the government or cut deficits... and he also knows that almost everyone that votes for him has NO idea about that. Obama is banking on the ignorance of the American electorate.
Lane - Great Job! But doesn't "soak the rich" just sound like so much more fun? LOL According to Obama, as he said last night, it's fair...with liberals, class warfare makes them feel better - and how they "feel" is all that matters.
Susan - Eat the Rich... I think that is what PJ O' Rourke said.