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In the last nine months, our federal government has bailed out big business left and right. Wall Street, banks, insurance companies, car companies. The federal government serves as a backstop for big business. Big business also happens to be the ones with the deep pockets, lobbyists, and campaign cash to help get the politicians re-elected. It's a cozy little quid pro quo of the nation's power brokers. The elite taking care of their own. The government has also bailed itself out by sending huge chunks of cash to state governments via Obama's stimulus bill. Those government jobs were "saved," even as us schlubs in the private sector lost our jobs. It seems ALL the big boys in our country are "too big to fail," and the enormous bailout price tag is put on the national credit card for some future taxpayer schlubs to worry about. That's a sweet deal for the big boys in and out of government. Their risk is alleviated. Their past sins, which led to these dire financial straits in the first place, are absolved. The taxpayers serve as the sin-eaters and the pain-eaters. Btw, the federal employees health care plan is top-notch. Thank you very much, schlubs.
But with all this bailing out of the big boys, something critical has been forgotten.
70% of the jobs created in this country come from small business. How are we treating our small businesses, the ones who create the lion's share of employment opportunities ???? Let's take a look.
The liberal solution to every conceivable financial woe comes down to basically three words - "tax the rich." Then the liberals spew out inanities about how the top income tax rates used to be MUCH higher, like 70% or 90% (as if that's a good thing). What they don't tell you is that small businesses are scooped up along with the wealthy as liberals cast their tax nets, trolling for rich people. The reason for this is because 75% of small businesses are sub-chapter S corporations, who file their business taxes under the individual income tax code. When the Bush tax cuts for the wealthy expire, causing the top tax rate to increase by 4.6% to 39.6%, small businesses (the job creators) have to pay those increased taxes too. That leaves less money available to successful small businesses for investment, growth, wage increases for it's employees, and/or new job creation.
Reversing the Bush tax cuts is far from the only anti-small business measure being proposed. As part of the ObamaCare reform, the House Committee has propsed a surcharge tax for anyone making over $1 million per year, raising the top income tax rate to 45%. Last month, freshman Democrats in the House (who apparently have a lot more economic sense than many veteran Democrats in the House), sent a letter to Speaker Nancy Pelosi (D-CA) objecting to the measures, which they say will hurt small businesses. Here is a portion of that letter:
While the Ways and Means Committee states that the proposed surcharge in H.R. 3200 will only impact 4.1 percent of small businesses, we are concerned that this does not paint a complete picture. According to the Internal Revenue Service's 2002 Statistics of Income, 64 percent of households filing income tax forms with AGI above $250,000 filed as an S corporation or a partnership or filed a Schedule C sole proprietorship tax form. Further, of all small businesses, 75% are S-Corporations where the business income is passed through to the business owners' individual tax return, increasing the chances that it will be impacted by the proposed surcharge.
So, the Ways and Means Committees' 4.1% number of small businesses being affected is an outright lie. No surprise there. I'm only surprised when they don't lie. The letter goes on:
The proposed surcharge will also have a direct negative impact on manufacturers, another industry essential for our recovery. As manufacturers are capital intensive businesses, their taxable income is often higher (nearly 70 percent of the manufacturers that pay at the individual rate have an average taxable income of $570,000). Manufacturing machinery can cost of $1 million and many owners have to save for years to expand and buy new equipment. Yet those profits saved each year would be hit by the new surcharge, which could lead to reduced investment.
Especially in a recession, we need to make sure not to kill the goose that will lay the golden eggs of our recovery...Combined with state taxes, many successful small businesses -- the very kind of business that should lead in creating new jobs and help us emerge from this recession -- will be taxed at over 50 percent.
A 50% tax rate on job creators......Dumb-da-da-dumb-dumb. Small business can't thrive in such an environment.
The freshmen House Democrats go on to explain how, at a 50% tax rate, small businesses would also be at a huge disadvantage to the big corporations and multinationals, who would still be paying the lower 35% business tax rate. What an unbelievable coincidence. The big boys, after being bailed out and immunized from failure at the taxpayer's expense, and after all their lobbying and campaign contributions, get FAVORABLE TREATMENT FROM THE FEDERAL GOVERNMENT over the biggest job creators in the country, small business.
Btw, the letter also mentioned that $21 billion of the stimulus package funds are going to small businesses, the biggest job creators in the country. That comes out to about TWO PERCENT of the $787 billion Obama stimulus total. Do any of you STILL think that was a stimulus package ???? It wasn't. It was mostly just an extraordinarily large appropriations spending package, aka, pork. That's why it hasn't and won't work.
Let's also not forget that cap-and-trade is looming on the horizon, so Obama can "skyrocket" those energy costs for small businesses too. Then, if Card Check passes, the Big O can just drive a lot of small businesses out of business via unionization and it's unaffordable wages and mandates on business. Peachy.
Back to health care reform. The President is trying to sell the health care plan as being pro-small business, but a proposal in the House calls for employers with a total payroll above $250,000 to offer health insurance to their workers or face a surtax of as much as 8 percent. A Senate committee version would require all businesses, except those with fewer than 25 employees, to provide health coverage or pay a $750 fine per year for each worker. I've heard there will be a tax credit for businesses to provide health care (that doesn't help struggling businesses, which are many these days), but if these plans are pro-small business, I'd sure hate to see what anti-small business would look like.
That's why the business community, with the exception of those big and favored few who will prosper under Obama's plans (like Big Pharma or GE) is scared to death of Barack Obama, and is fighting back. I can't blame them. Anti-business craziness abounds.
I guess my only remaining question would be - is Obama trying to destroy this country on purpose, or is he just too stupid to know any better ?