Are you for or against the Obama middle class tax cuts?

[Mott the Hoople]

While it is indeed a PART of the decision making process, the part he fails to comprehend is all other parts being equal (meaning they remain the same regardless of income tax rates) higher taxes mean LESS money the business owner has to pay in terms of salary etc...

He also ignores the fact that the benefits of an employee are not normally immediate to the company bottom line because of the learning curve of the job. This is not always the case, but most times the new employee is not going to be as productive as one with experience.

When you factor in the uncertainty, a small business owner presented with the fact that they may pay higher taxes in the future will typically hold off on hiring until the uncertainty becomes clear. Given that any freshman taking Econ 101 can tell you that raising taxes in a recessionary environment will retard growth of the economy, most business owners (small and large) will put a halt on hiring due to the expense of training and more importantly the expense of firing an employee.

So if a business owner knows:

1) Hiring a new employee will require training to get that employee up to speed

2) Taxes are going up

3) Tax increases retard growth

4) retarded growth could impact his/her bottom line

5) lower bottom line means potential layoffs

6) firing employee is expensive

then that business owner is NOT going to be hiring in the above environment

Dude you're rationalizing and the proposed tax increase is such a small cost to doing business that if it had any of the impacts you listed then somebody doesn't know how to run a business. It's that plain and simple.

If the Obama middle class tax cuts are implemented the over whelming majority of smal business would not generate enough profits to fall into the upper two tax brackets which would only see a 4% raise in taxes (still hisorically low levels at that). Using Apples example of a small business with a $5000 tax burden that's a net increase in cost of $200 fucking dollars. When all the other costs of running that business are added up it doesn't even add up to 1% increase in their cost of doing business.

On the other hand progressive tax cuts alway provide a far greater stimulus the regressive tax cuts. That's because the middle class people and small businesses who will recieve those cuts will spend that money and it is spending that drives our economy and not tax cuts. Maintaining the regressive high end tax cuts for the top 2 to 5% of earners via the Bush tax cuts would not have nearly the economic stimulus because most of that money will not be spent. It will remain in the hands of that top 2 to 5% causing less economic growth and greater income disparity.

The Obama middle class tax cuts have been supported by both mainstream economist and the CBO has having a far greater economic stimulus then maintaining the regressive Bush tax cuts for the wealthy.

 

[apple0154]

You're switching from buying a business to hiring employees. Which are you talking about so us kindergartners can follow along?

It's the same principal. The proposed tax increase on net income above $250,000/yr is neither a reason not to hire an employee or not to buy a business.

 

[Cancel 2016.2]

Dude you're rationalizing and the proposed tax increase is such a small cost to doing business that if it had any of the impacts you listed then somebody doesn't know how to run a business. It's that plain and simple.

If the Obama middle class tax cuts are implemented the over whelming majority of smal business would not generate enough profits to fall into the upper two tax brackets which would only see a 4% raise in taxes (still hisorically low levels at that). Using Apples example of a small business with a $5000 tax burden that's a net increase in cost of $200 fucking dollars. When all the other costs of running that business are added up it doesn't even add up to 1% increase in their cost of doing business.

On the other hand progressive tax cuts alway provide a far greater stimulus the regressive tax cuts. That's because the middle class people and small businesses who will recieve those cuts will spend that money and it is spending that drives our economy and not tax cuts. Maintaining the regressive high end tax cuts for the top 2 to 5% of earners via the Bush tax cuts would not have nearly the economic stimulus because most of that money will not be spent. It will remain in the hands of that top 2 to 5% causing less economic growth and greater income disparity.

The Obama middle class tax cuts have been supported by both mainstream economist and the CBO has having a far greater economic stimulus then maintaining the regressive Bush tax cuts for the wealthy.

Again, what you are failing to comprehend is that no matter how much you try to spin this, this is EXACTLY the type of information that causes businesses not to hire. THEY DO NOT LIKE UNCERTAINTY and they do not like the fact that they are going to get hit with higher taxes.

As for our tax code... it is YOUR party that continues to keep the regressive system in place. Our current system is the one in which Buffett gets his effective rate below that of his secretary. If you think bumping the top end of the bracket is going to change his effective rate, then you are a fool.

The bump in the top rate is going to effect not the super wealthy who can afford the accountants that will take advantage of all the loopholes and deductions our current system provides for those who have the money to hire accountants to sift through the 70,000 pages of tax code to find them. The bump in the top rate is going to hit the small business owners.... who cannot afford such accountants. If you want to pretend that higher taxes are not going to effect their hiring practices... feel free to have your party stand up and shout that from the rooftops. That will ensure that not only the House but also the Senate will fall in November.

 

[Cancel 2016.2]

Dude you're rationalizing and the proposed tax increase is such a small cost to doing business that if it had any of the impacts you listed then somebody doesn't know how to run a business. It's that plain and simple.

If the Obama middle class tax cuts are implemented the over whelming majority of smal business would not generate enough profits to fall into the upper two tax brackets which would only see a 4% raise in taxes (still hisorically low levels at that). Using Apples example of a small business with a $5000 tax burden that's a net increase in cost of $200 fucking dollars. When all the other costs of running that business are added up it doesn't even add up to 1% increase in their cost of doing business.

On the other hand progressive tax cuts alway provide a far greater stimulus the regressive tax cuts. That's because the middle class people and small businesses who will recieve those cuts will spend that money and it is spending that drives our economy and not tax cuts. Maintaining the regressive high end tax cuts for the top 2 to 5% of earners via the Bush tax cuts would not have nearly the economic stimulus because most of that money will not be spent. It will remain in the hands of that top 2 to 5% causing less economic growth and greater income disparity.

The Obama middle class tax cuts have been supported by both mainstream economist and the CBO has having a far greater economic stimulus then maintaining the regressive Bush tax cuts for the wealthy.

Hint: Those people do not spend money when the unemployment rate is at 9.6% and threatening to go higher.

It is HIRING (LOWERING UNEMPLOYMENT) that will get this economy going again. You are foolish if you believe that higher taxes are not a significant factor. You keep on giving examples where the difference is only $5k or $200 in taxes.... because THAT is what we are talking about... the $200 differences.

 

[Bonestorm]

Hint: Those people do not spend money when the unemployment rate is at 9.6% and threatening to go higher.

It is HIRING (LOWERING UNEMPLOYMENT) that will get this economy going again. You are foolish if you believe that higher taxes are not a significant factor. You keep on giving examples where the difference is only $5k or $200 in taxes.... because THAT is what we are talking about... the $200 differences.

But taxes aren't the main problem small business are facing. The main problem small business are facing is that no one wants to buy their goods and services. They aren't going to hire new people when they have excess capacity due to low demand. It's fairly simple.

Here's a pretty nifty chart:

Note the relative constant for taxes and the huge spike in poor sales as the main problem small businesses are facing right now.

 

[Mott the Hoople]

Hint: Those people do not spend money when the unemployment rate is at 9.6% and threatening to go higher.

It is HIRING (LOWERING UNEMPLOYMENT) that will get this economy going again. You are foolish if you believe that higher taxes are not a significant factor. You keep on giving examples where the difference is only $5k or $200 in taxes.... because THAT is what we are talking about... the $200 differences.

Well that's why were arguing for the Obama middle class tax cuts. The numbers provided by economist are clear. Maintaining the regressive Bush tax cuts for the wealthy have a marginal economic stimulus cause those at the top hold on to the money and don't spend it. Not only that it would add about 700 billion in additional debt. Where as the Obama middle class tax cuts will mean increased consumer spending which will create greater demands for goods and services and thus provide the economic stimulus for job growth with out adding to our burgeoning debt.

 

[apple0154]

But taxes aren't the main problem small business are facing. The main problem small business are facing is that no one wants to buy their goods and services. They aren't going to hire new people when they have excess capacity due to low demand. It's fairly simple.

Here's a pretty nifty chart:

Note the relative constant for taxes and the huge spike in poor sales as the main problem small businesses are facing right now.

Exactly. When stocks were doing well people were spending money and saving less because their investments and retirement funds were growing without them having to put a lot of money in. Now, their thinking is they have lost money so they have to be careful.

Then there's the folks who live off investments. Interest, dividends, etc. have been cut.

The only place any tax cut is going to go is into the pockets of those who do not have to spend it, business owners included.

 

[cawacko]

Well that's why were arguing for the Obama middle class tax cuts. The numbers provided by economist are clear. Maintaining the regressive Bush tax cuts for the wealthy have a marginal economic stimulus cause those at the top hold on to the money and don't spend it. Not only that it would add about 700 billion in additional debt. Where as the Obama middle class tax cuts will mean increased consumer spending which will create greater demands for goods and services and thus provide the economic stimulus for job growth with out adding to our burgeoning debt.

Dude enough with the word game rhetoric. Obama's "middle class tax cut" is not lowering tax payers rate. It will be the same next year as it is this year. It is not putting any more money into anyone's pocket.

 

[Dixie - In Memoriam]

How come everyone is letting Mott continue to get away with his lie? It is not a "tax cut" if rates are unchanged. The Obama Tax Cuts for the Middle Class, do not exist. The Bush Tax Cuts exist, but only until the end of this year. Extending them, or any part of them, is extending the Bush Tax Cuts, not Obama implementing a new tax cut. It is this kind of dishonest hackery the people are sick of.

In the debate about taxes and business, I would like to interject the following axiom... Businesses do NOT pay taxes! Repeat that to yourselves a few times... Businesses do NOT pay taxes! Any 'increase' in cost of doing business, is going to ultimately be offset by higher prices for the consumer. If it is impossible to increase prices, they will downsize and become more productive with fewer people. In virtually NO scenario, will the increased costs (taxes) be absorbed from profits. In the pinhead mind, is the only way it works like that.

Let's also look at what the pinheads are considering "rich" these days. Joint or single incomes of over $250k? Well, that's a family-owned dry cleaners, or convenience store. That's a firefighter and RN, or an army captain and his e-biz wife. In many of these cases, they are not pocketing $250k, they have a lot of expenses that have to be paid out. Ignorant pinheads have this 'image' in their heads of 'the rich' as being these gaudy opulent people who live in mansions, have butlers and chauffeurs, and own yachts. But those people are the 'uber-rich' and guess what? They don't pay taxes because they no longer 'earn' income! They are rich, so they don't have to work and make income, therefore, there is no amount of income tax increases which will ever effect them. You can increase Capital Gains taxes, but that just means these 'uber-rich' people will be less inclined to spend their wealth on new ventures.

 

[cawacko]

No, it doesn't mean that. A business owner is not going to hire someone unless that person is "self-supporting", meaning bringing in sufficient revenue to cover his/her salary and benefits. The tax is levied on the profit, after all the employee expenses have been met, so taxes are not a primary consideration.

The taxes are levied on the profit the company/owner realizes from the employee. I explained this in a prior post. If the viability of hiring an employee rests on a 5 or 6 percent increase in taxes on the profit he/she generates for the company then the company can't afford an extra employee. No business person is going to cut it that fine. If an entrepreneur is determining the necessity of hiring employees based on a 5 or 6 percent increase/decrease in the profits they will generate I highly suggest that entrepreneur get the hell out of business before it's too late!



Again, we come back to the 5 or 6 percent increase in taxes. While a new employee may require a short training period no decent business person is going to base a "hire/don't hire" decision on a 5 or 6 percent spread. Simply stated if the company/entrepreneur can not afford an employee due to paying an additional 6% in taxes they can't afford an employee. Normal fluctuations, from the economy to the employee's health, will have a much greater impact on profits than the 6% tax increase.



Nonsense! Again, 6% is not going to be a determining factor.

The economy. The training (taking a chance on an employee's ability to do the job). The expense of firing an employee. Those factors have a bearing on profits, far above the 6%.

Either it's worthwhile to hire an employee or it isn't and no employer is going to base that decision on the slight increase in taxes being discussed. That's why I previously said some folks must think small business is altruistic if they believe it when businesses say taxes prevent them from hiring more employees.

In this economy the tax savings are going to go directly into the entrepreneur's pocket. No entrepreneur/small business is going to say, "Hey, we save on taxes. Let's take a chance and hire an employee."

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Your first comment is ridiculous. You are really going to argue that a business is never going to hire someone it would have to train and show the ropes to? They would only hire someone who can hit the ground running from Day 1 as if they had been working at the company for months or even years?

 

[Phantasmal]

Your first comment is ridiculous. You are really going to argue that a business is never going to hire someone it would have to train and show the ropes to? They would only hire someone who can hit the ground running from Day 1 as if they had been working at the company for months or even years?

It seems to be a trend, I have seen more job openings in our paper asking for experienced workers than those who need training!

 

[cawacko]

It seems to be a trend, I have seen more job openings in our paper asking for experienced workers than those who need training!

Without question there are definitely businesses out there that will not train people. Hell I remember a couple of years ago I was hiring a college intern and they told me to get someone with real estate experience. One kid I talked said 'how am I going to get any experience when I can't even qualify for a college internship?'

A lot of times it is the bigger corporations that will hire kids out of school and pay them little but give them the training and experience they need.

However to say that almost no small businesses will hire someone who might need training or just time to get fully aclamated into the culture is just not accurate.

 

[Cancel 2016.2]

Well that's why were arguing for the Obama middle class tax cuts. The numbers provided by economist are clear. Maintaining the regressive Bush tax cuts for the wealthy have a marginal economic stimulus cause those at the top hold on to the money and don't spend it. Not only that it would add about 700 billion in additional debt. Where as the Obama middle class tax cuts will mean increased consumer spending which will create greater demands for goods and services and thus provide the economic stimulus for job growth with out adding to our burgeoning debt.

Again... the raising of the top rates will have minimal impact on the wealthy... the hit it will have is on the small business owners.

The truly wealthy can afford to hire the accountants that will find and use the loopholes and deductions that will get their EFFECTIVE tax rates lower than that of Buffets secretary.

Unless you eliminate the loopholes, then all you are doing is crushing those who do the bulk of the hiring in this country.

As for Obama... he IS NOT PROPOSING ANY MIDDLE CLASS TAX CUTS.... He is PROPOSING THAT WE EXTEND THE CURRENT TAX RATES... which means it will HAVE NO FRIGGIN IMPACT on the economy going forward other than maintain the lackluster performance it has had the past six months (at best).

 

[Onceler]

To me, taxes has become the kind of issue for the left that environmentalism has become for the right.

On the latter, even many reasonable righties oppose common sense green measures as a knee-jerk; it's just seen as a "leftie" cause, and they don't want any part of it. In some ways, they have helped to define the GOP as being somewhat anti-planet.

By the same token, those on the left have heard for so long that the the right is "anti-tax," they almost feel like they're SUPPOSED to be the party/side of higher taxes.

It's madness. I know I'll get lambasted for this, but anyone who doesn't think we're way overtaxed, and who thinks that the tax climate for American business is good & competitive, is just not thinking in the here & now. We're pretty much taxed to oblivion, and our gov't spends too much.

 

[Mott the Hoople]

Again... the raising of the top rates will have minimal impact on the wealthy... the hit it will have is on the small business owners.

The truly wealthy can afford to hire the accountants that will find and use the loopholes and deductions that will get their EFFECTIVE tax rates lower than that of Buffets secretary.

Unless you eliminate the loopholes, then all you are doing is crushing those who do the bulk of the hiring in this country.

As for Obama... he IS NOT PROPOSING ANY MIDDLE CLASS TAX CUTS.... He is PROPOSING THAT WE EXTEND THE CURRENT TAX RATES... which means it will HAVE NO FRIGGIN IMPACT on the economy going forward other than maintain the lackluster performance it has had the past six months (at best).

No, the Obama Middle Class Tax Cuts is a proposal to continue the current tax rates for the middle class while allowing the regressive and lopsided tax cuts for the wealthiest 2 to 5% to expire. That's 700 Billion that can go towards servicing our debt and cutting our debt is also an economic stimulus.

 

[Phantasmal]

Without question there are definitely businesses out there that will not train people. Hell I remember a couple of years ago I was hiring a college intern and they told me to get someone with real estate experience. One kid I talked said 'how am I going to get any experience when I can't even qualify for a college internship?'

A lot of times it is the bigger corporations that will hire kids out of school and pay them little but give them the training and experience they need.

However to say that almost no small businesses will hire someone who might need training or just time to get fully aclamated into the culture is just not accurate.

Banks and other credit agency will still hire walk ins. I see it mostly in the job sections where they require a college degree, like drafting, and my son was saying the same thing, how do I get experience if they won't hire me?

 

[Bonestorm]

To me, taxes has become the kind of issue for the left that environmentalism has become for the right.

On the latter, even many reasonable righties oppose common sense green measures as a knee-jerk; it's just seen as a "leftie" cause, and they don't want any part of it. In some ways, they have helped to define the GOP as being somewhat anti-planet.

By the same token, those on the left have heard for so long that the the right is "anti-tax," they almost feel like they're SUPPOSED to be the party/side of higher taxes.

It's madness. I know I'll get lambasted for this, but anyone who doesn't think we're way overtaxed, and who thinks that the tax climate for American business is good & competitive, is just not thinking in the here & now. We're pretty much taxed to oblivion, and our gov't spends too much.

That's ridiculous by pretty much any measure. What we're talking about in this whole debate over which, if any, tax cuts to re-implement is the top marginal tax rate. Here's a chart of the highest marginal tax rate from 1920 to the present, including the projected increase:

Taxed to oblivion. That's hilarious.

 

[leaningright]

Let me ask Nigel, would you like to return to the rates of the 50's and 60's according to that chart?

 

[leaningright]

To me, taxes has become the kind of issue for the left that environmentalism has become for the right.

On the latter, even many reasonable righties oppose common sense green measures as a knee-jerk; it's just seen as a "leftie" cause, and they don't want any part of it. In some ways, they have helped to define the GOP as being somewhat anti-planet.

By the same token, those on the left have heard for so long that the the right is "anti-tax," they almost feel like they're SUPPOSED to be the party/side of higher taxes.

It's madness. I know I'll get lambasted for this, but anyone who doesn't think we're way overtaxed, and who thinks that the tax climate for American business is good & competitive, is just not thinking in the here & now. We're pretty much taxed to oblivion, and our gov't spends too much.

I hadn't seen this post until Nigel brought it to the forefront. You better watch it Lorax, you and me are going get kicked out of the party.

 

[Bonestorm]

Let me ask Nigel, would you like to return to the rates of the 50's and 60's according to that chart?

Not at all. But pretending that right now today we are "taxed to oblivion" is ridiculous. Even if all of the Bush tax cuts expire we'll be at 1990 levels of taxation which themselves were historically low and had no measurable impact on economic growth.

Let's get real.