Monday, August 30, 2010
Small Businesses Fear Hit From Rise in Tax Rates
This is an article about how Obama want to raise taxes for small business owners. The going rate right now is 33% to 35%, which are the tax cuts that President Bush made while in office, will go to around 36 to 39%. Especially in these tough time's this would be a terrible time to make this decision. With small business once you start taking more money away from the company and its owner, the only way business owners can cope with that change is to make cut backs. With the US at 10% UE and small businesses employing like 80% of the American work force, you could bet that UE would rise as a result for these increase in taxes.
Subscribe to:
Post Comments (Atom)
5 comments:
I think what you're saying is true especially because these small business firms are not the ones getting bailed out but it's the bigger firms that are. The larger firms should be the ones who are taxed because they can firstly afford it and secondly because they are more likely to be needing a bail out in the future.
I agree because the U.S. is severely reliant on small businesses which create many job opportunities and as a result of this increase in taxes business owners will definitely have to make cut backs whether that be laying workers off or increasing their prices.
Obama has this superficial idea that these tax cuts will help the "mom and pop" shops. He has a strong ivory tower approach while not realizing that the U.S. workforce depends so greatly on that 80% employment rate of small businesses
I agree with everything said. The big businesses in the country can handle the tax raises (the only problem is that, like said above, that most of the work force and business in America is in smaller companies that can't handle the extra taxes). With the extra taxes small businesses will likely cut back on labor to save themselves, therefore raising the UR even more.
"most small firms are structured so that they pay individual rather than corporate income taxes"
The only business owners who would be paying more than this are the ones whose income from their businesses make more than $200,000 (assuming they are a single taxpayer). How many of the small business owners you know that make more than 6 figures (in this example a lot more than 6 figures) are the ones struggling in this down economy? Few, if any.
The ones who are making less than the $200,000 cutoff, the "mom and pop" stores who probably are struggling (the corner diner in your town that has been there for years and employs only local kids, and is now competing against chain restaurants) are seeing their taxes decrease.
Sounds reasonable and logical to me.
Oh, and on the specific example from the article- Karen Port, who sells a measly $3,000,000 a year. (Poor thing, barely can feed her family) She owns a luxury spa company. Did she think that being in a business such as that, there may be some risk of her customers dwindling in a down economy? Did she expect them to put two in each room of their houses? I could have told her the business probably won't last a few more years- that has nothing to do with taxes.
Post a Comment