Obama tax plan no small deal to small businessmen

WASHINGTON (AP) — President Barack Obama's plan to increase taxes on top earners would have only a small impact on the nation's economy, according to congressional budget experts. But don't tell that to small business owners facing a tax hike.

Obama's proposal would hit about 940,000 people who report business income on their individual or household returns, says the Joint Committee on Taxation, the official scorekeeper for Congress. That's only 3.5 percent of the people who report business income, but those business owners are projected to earn 53 percent of the $1.3 trillion in business income that will be reported on individual returns next year.

That, Republicans in Congress argue, makes those business owners an important engine for economic growth and job creation.

They recite it as gospel: Paying higher taxes will reduce the amount of profits business owners would otherwise re-invest in their companies, making them less likely to expand and hire more workers. Many economists agree that tax increases in general limit economic growth. But there are big disagreements about magnitude — how much relatively small changes in the top two income tax rates would affect the economy and job creation.

The Congressional Budget Office estimated last month that Obama's plan to increase taxes only on top earners would reduce economic growth by 0.1 percent of Gross Domestic Product next year, or about $16 billion. That translates into about 200,000 fewer jobs.

By comparison, letting all the tax cuts enacted in 2001 and 2003 expire would reduce economic growth by 1.4 percent of GDP, resulting in about 1.8 million fewer jobs, the CBO said.

"It's a very tiny portion of the cliff impact and it very much raises revenues and it does so in a fair way," Rep. Sander Levin of Michigan, senior Democrat on the tax-writing House Ways and Means Committee, said of Obama's proposal. "It will not stifle economic growth in any significant way."

Most of the expiring tax cuts were first enacted under former President George W. Bush and extended by Obama in 2010. This time around, Obama says he is determined to let the tax cuts expire on income above $200,000 for individuals and $250,000 for married couples. He wants to extend the Bush tax cuts for people making less.

House Speaker John Boehner and other Republicans have said they are open to more tax revenue through reducing or eliminating tax breaks. But Boehner opposes Obama's proposal to increase tax rates on high earners.

"Raising taxes on small businesses instead of taking a balanced approach that also cuts spending is wrong," Boehner, said recently. "It's only going to make it harder for our economy to grow. And if our economy doesn't grow, Americans don't get new jobs and the debt problem that we have will continue to threaten our children's future."

Republicans often relate the tax increases to small businesses because 94 percent of America's businesses are structured so that profits go directly to partners or shareholders who report the income on their individual tax returns. It's a way for business owners to avoid paying taxes twice on the same income — once at the corporate level and again when profits are distributed as dividends.

Under Obama's plan, the 33 percent tax rate would rise to 36 percent on taxable income above $231,000 for a married couple filing jointly. The top tax rate would increase from 35 percent to 39.6 percent on taxable income above $397,000.

Obama's plan also would phase out the personal exemption and gradually reduce itemized deductions for individuals making more than $200,000 and married couples making more than $250,000. The top capital gains tax rate would rise from 15 percent to 20 percent. Qualified dividends, which are now taxed at a top rate of 15 percent, would be taxed as ordinary income for top earners, or at a top rate of 39.6 percent.

That, some business owners complain, would leave them with less money to hire new workers or keep the ones they have.

"We're trying to encourage people to go out and hire and take risks," said Brian Reardon, executive director of the S Corporation Association. "If you are reducing the marginal value, you are reducing the incentives for folks to take that risk."

An S corporations is a common business structure in which profits flow directly to shareholders who report the income on their individual tax returns.

Business owners note that they often pay taxes on profits they don't necessarily receive. For example, if you borrow money to start or expand your business, you can use some of your profits to repay the loan, but only the interest portion of the loan payment is tax deductible.

When business owners use profits to buy new equipment or make other upgrades, it often takes several years to write off the cost of those upgrades, depending on depreciation rules.

Dan McGregor, chairman of McGregor Metalworking Companies in Springfield, Ohio, said he and the other six shareholders in the business are looking at a tax increase of $250,000 to $300,000 next year under Obama's plan.

Under Obama's plan to increase the top two income tax rates, a taxpayer would have to have an income of around $4 million — depending on how it's structured — to face a tax increase of $250,000.

McGregor's company, which has 365 employees at five locations, does about $80 million a year in sales, McGregor said. Each year, a portion of the profits are distributed to shareholders, along with money to pay taxes. The rest, he said, is invested back into the company.

If taxes go up, distributions to shareholders must go up to pay the higher taxes, leaving less money to reinvest in the business, McGregor said.

"I feel a $40,000 reduction is the loss of one job, so if it's a $200,000 tax increase, that's five jobs," McGregor said.

http://news.yahoo.com/obama-tax-plan...201241565.html

More fear.

IF THIS IS EVEN TRUE...

Oh no!

If you make $54,600 per month, now you will only make $52,088.

Say it isn't so....



PS - $230,000 taxable is over $300,000 per year in income.

Boo Hoo.

The price of being a responsible nation

Originally Posted by casino is no lie

The price of being a responsible nation

Rather than getting confrontational, I am going to present you with a question :

"At what point is this 'responsibility' you speak of detrimental to our nation? If you have a boat that can safely hold 100 people and there are 300 people treading water to try and stay alive, how many do you bring on the boat? Do you capsize the boat and kill those 100 that the vessel can safely hold attempting to 'responsibly' rescue the extras in the water?"


And I'll follow it up with a quick point : You can tax the hell out of businesses and pull out every bit of profit to help pay for greater federal spending, but you're not just pulling money from "the rich".. you're taking it from the pockets of all those employees who work for companies that will go out of business when they lose every competitive advantage. We can't continue to bash the private sector and simultaneously whine about companies that are offshoring their labor and manufacturing.

Originally Posted by 2000_328CI

Rather than getting confrontational, I am going to present you with a question :

"At what point is this 'responsibility' you speak of detrimental to our nation? If you have a boat that can safely hold 100 people and there are 300 people treading water to try and stay alive, how many do you bring on the boat? Do you capsize the boat and kill those 100 that the vessel can safely hold attempting to 'responsibly' rescue the extras in the water?"


And I'll follow it up with a quick point : You can tax the hell out of businesses and pull out every bit of profit to help pay for greater federal spending, but you're not just pulling money from "the rich".. you're taking it from the pockets of all those employees who work for companies that will go out of business when they lose every competitive advantage. We can't continue to bash the private sector and simultaneously whine about companies that are offshoring their labor and manufacturing.

The United States is the greatest, best country God has ever given man on the face of the earth. We'll manage.

Originally Posted by casino is no lie

The United States is the greatest, best country God has ever given man on the face of the earth. We'll manage.

I think you've just summed up the mentality of keynesian economists more succinctly than I've ever seen it done. This idea that "eh we'll figure it out later" rather than dealing with the issue as it stands. Just keep pumping resources (regardless of their track record) at the problem and artificially stimulating the economy to pretend things are totally fine. Just like the mortgage forgiveness programs, we're just masking the wounds with pretty wrapping paper and pretending there isn't a problem.

Originally Posted by 2000_328CI

his idea that "eh we'll figure it out later" rather than dealing with the issue as it stands.

The issue is that the Government has a spending and revenue problem. Obama's proposal solves both. Republicans delude themselves into thinking there is a pain-free solution to addressing it. The GOP has no plan. And quite frankly they appear to scared to name specifics out of fear that they might have their name linked with an unpopular proposal.

For too long they relied on a platform of criticizing the "other guy's" platform while maintaining the status quo. Well that status quo got us where we are today and people are not interested in repeating that. The election results should make that evident.

Now that the GOP is forced to run on a new platform, they've found themselves in a bit of a pickle because that means they actually have to formulate something new. Something they haven't had to do for a decade.

More fear.

Common sense.

more shitty small business owners. he is not investing back into his business if he has that much profit passing through to himself and the other shareholders. and if it is a problem, then switch to a c corp you fvcking dipshit. sounds like this dumbfvck needs a better accountant.

I'm a fan of tax hikes, but they should have been enacted a decade ago when we started going back to war. These are the first wars we've fought where we've only deferred all the costs, not even attempted to start paying them.

America hasn't been at war. The army, navy, marines, and air force have been at war. America has been at the mall.

And tax hikes should be across the board. Not just for a select few because we decide they can afford it most.

Fat Americans whining about their personal debt and the nations debt while they frivolously throw away money at the shopping mall, racking up personal credit card debt, and demanding that the rich pay their "fair share in taxes" while they pay a fraction of it.

Originally Posted by 2000_328CI

Fat Americans whining about their personal debt and the nations debt while they frivolously throw away money at the shopping mall, racking up personal credit card debt, and demanding that the rich pay their "fair share in taxes" while they pay a fraction of it.

That sounds like an opinion, not a factually supported statement. I await your rebuttal. Until such point, I think it's only fair we dismiss your opinion as hogwash.

Originally Posted by casino is no lie

That sounds like an opinion, not a factually supported statement. I await your rebuttal. Until such point, I think it's only fair we dismiss your opinion as hogwash.

Let's tackle this one issue at a time.

First, credit card debt :

http://www.nerdwallet.com/blog/credi...ebt-household/

American Household Credit Card Debt Statistics through 2012

by Tim

Updated December 7th. Average credit card debt stands at a distressing $7,193 - a startling number considering that if you look at only those households that have debt, the average rises to $15,418. And the American debt profile only gets worse. Here are statistics, trends, studies and methodology behind the average U.S. household debt.

U.S. household consumer debt profile:

Average credit card debt: $15,418
Average mortgage debt: $149,782
Average student loan debt: $34,703

In total, American consumers owe:

$11.38 trillion in debt
A decrease of 2.95% from last year
$852 billion in credit card debt
$8.15 trillion in mortgages
$914 billion in student loans
An increase of 7.35% from last year

Deep dive: credit card debt

Credit card debt is the third largest source of household indebtedness, averaging $7,193 per household as of October 2012. Only the ~$8 trillion mortgage debt market, and the ~$1 trillion student loan debt market are larger.

Indebted American households have a substantial amount of credit card debt: of the estimated 46.7% of households that carry a balance, the average debt is a whopping $15,418 as of October 2012, an increase of 0.59% from September and 0.23% from October 2011.

Here are the latest credit card debt statistics from the Federal Reserve:
Total Credit Card Debt Average Household Credit Card Debt Average Indebted Household Debt
October 2012 $857.6 billion $7,193 $15,418
Change from September 2012 +0.66% +0.59% +0.59%
Change from October 2011 +1.05% +0.23% +0.23%
Change from September 2012 (annualized) +7.90% +7.07% +7.07%

What does this mean? Credit card debt is holding fairly steady - but whether or not that's a good thing is up for debate. On the one hand, higher consumer spending puts the economy on a positive track. Higher spending leads to more jobs and higher incomes, which in turn lead to higher spending. However, if wages and employment are improving at this sluggish pace, this might well be an indication that families are borrowing to make ends meet rather than a reflection of a well-founded increase in consumer confidence.

Read on for statistics, data, methodology and conclusions on the state of U.S. credit card debt.
March 31, 2010 October 31, 2012
Total revolving debt $906.7 billion $857.6 billion
Number of U.S. households 116,716,292 119,234,842*
Average credit card debt per household $7,768 $7,193*
% of households with a credit card balance 43.2% 46.7%
Average credit card debt per indebted household $17,630 $15,418

*NerdWallet estimates; see methodology section for details.

In March 2010, the last date at which the data can be reliably estimated, we found that:

The median American household owed $3,300 of consumer debt;
The average American household owed $7,768 and
The average indebted American household owed $17,630.

Note that the average American household owed far more than the median, and also that the average indebted household owed far more than the average household overall. Such large discrepancies indicate that a relatively small number of households were deeply underwater.

In June 2012, by NerdWallet estimates, we found that:

The average American household owed $7,271, while
The average indebted American household owed $15,587.

Two things stand out: overall credit card debt is down, and the average indebted household is less underwater relative to the average overall than before.
Falling indebtedness is largely due to defaults rather than repayment

As a nation, we owe 852 BILLION in credit card debt. Safe to say, I'm on solid ground regarding personal spending habits.


Now for the fat part : From the CDC : http://www.cdc.gov/obesity/data/adult.html

Obesity is common, serious and costly

More than one-third of U.S. adults (35.7%) are obese. [Read data brief Adobe PDF file [PDF-528Kb]]
Obesity-related conditions include heart disease, stroke, type 2 diabetes and certain types of cancer, some of the leading causes of preventable death. [Read guidelinesExternal Web Site Icon]
In 2008, medical costs associated with obesity were estimated at $147 billion; the medical costs for people who are obese were $1,429 higher than those of normal weight. [Read summaryExternal Web Site Icon]

Obesity affects some groups more than others

Non-Hispanic blacks have the highest age-adjusted rates of obesity (49.5%) compared with Mexican Americans (40.4%), all Hispanics (39.1%) and non-Hispanic whites (34.3%) [See JAMA. 2012;307(5):491-497. doi:10.1001/jama.2012.39].

So roughly a third of our nation is OBESE, defined, by Google, as Grossly fat or overweight.

What about the trend... : Reuters : http://www.reuters.com/article/2012/...88H0RA20120918

(Reuters) - If Americans stick to their eating and exercise habits, future historians will look back on the early 21st century as a golden age of svelte.

Using a model of population and other trends, a new report released on Tuesday by the Trust for America's Health and the Robert Wood Johnson Foundation projects that half of U.S. adults will be obese by 2030 unless Americans change their ways.

So half of us will be obese by 2030. Awesome.


But what about those not obese : CDC Stats : http://www.cdc.gov/nchs/fastats/overwt.htm

Obesity and Overweight

(Data are for the U.S.)



Percent of adults age 20 years and over who are obese: 35.9% (2009-2010)
Percent of adults age 20 years and over who are overweight (and not obese): 33.3% (2009-2010)

Source: Health, United States, 2011, table 69 Adobe PDF file [PDF - 9.8 MB]

Percent of adolescents age 12-19 years who are obese: 18.4% (2009-2010)
Percent of children age 6-11 years who are obese: 18.0% (2009-2010)
Percent of children age 2-5 years who are obese: 12.1% (2009-2010)

So roughly 70% of the nation is "fat" or obese. When 7 out of 10 fit a description, I think it's safe to make generalizations (especially given the trends and indicators from adolescents and children).



Son, you got owned

Originally Posted by 217Bimmer

personal credit card debt has gone down while saving has increased. google is fairly easy to use. i would recommend it's use to prevent such an embarrassing mistake in the future.

Gone down... so that implies "it's gone"? I think not. If you weigh 500 pounds and lose 50, you're still a fat f*ck.

Originally Posted by 2000_328CI

Originally Posted by russ330

-No more copy and pastes from websites without attributing them. Put a link in the end or just add where it's from in the quote box. If you're copying something from an email or newsletter, then state so.

Originally Posted by 2000_328CI

Love it

Originally Posted by 2000_328CI

I think it's safe to make generalizations...

I'd say that sums up just about every post you make

Originally Posted by 2000_328CI

Fat Americans whining about their personal debt and the nations debt while they frivolously throw away money at the shopping mall, racking up personal credit card debt, and demanding that the rich pay their "fair share in taxes" while they pay a fraction of it.

personal credit card debt has gone down while saving has increased. google is fairly easy to use. i would recommend it's use to prevent such an embarrassing mistake in the future.

I just helped out the average debt number. We were a household without CC debt, and I just took on about $300 worth (at 0% interest), so I'm doing my part. What are you all doing to help the American debt figures?