alto92

came over from the fark discussion of this matter and, as a kerry supporter myself, feel it my duty to help a guy get an answer to his question, since i don't know.

here it is:
Maybe you farkers can help me out. As a small business owner I am having a hard time voting for Kerry, as right now around 60% of my income goes to the government. I live a modest life but because of my tax classification Kerry's plan would raise my taxes approx another 5%.

Do any of you know a website detailing why a small business owner would vote for Kerry?

/views Bush as the lesser of two evils

anyone?

Irishsean

Vote Badnarik, even less evil!

You'd also be voting for even less taxes!

__________________
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Willravel

JESUS!!! 60%? wow man. That's wayyyy too much. As far as Kerry for small buisness, he stands a better chance of fixing our economy (more buisness), he is more against outsourcing than Bush, his plan in Iraq will bring foreign buyers back to America, and Bush is an Imperialist (an empire, while good for buisness in the short term, becomes aweful as you are no longer safe from the governments overtaxing and abuse).

CoachAlan

How can his tax burden be 60%? It's my understanding that the Federal Income Tax limit is around 33%. I guess if you want to count social security, sales tax, toll booths, and so on, you might arrive at 60%, but the use of that number in a regular argument is just a thinly veiled attempt at sensationalism.

Of couse, I could be totally wrong and maybe there is some crazy tax bracket out there that I don't know about.

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alto92

for anyone who is interested, i found something on my own. i do appreciate the replies though!

http://factcheck.org/article265.html

always the helpful source, is factcheck

OpieCunningham

I'd suggest a good (or better) accountant to bring his tax rate back to reality and a look at the other issues to base his vote on.

martinguerre

my dad runs his own business...and LLC with a respectable amount of income. and the rate isn't anywhere close to 60%...it's filled like an S-Corp, and so income is simply all run through his personal tax return.

In fact, as has been mentioned, the indiv. tax rate doesn't go that high. So it isn't 60% of *your* income, that's for sure. 60% of the business's? Maybe...but i still have my doubts.

A few specifics, if you don't mind, would clarify the situation greatly.

d_p_w_k

most likely this guy needs a good accountant and a good lawyer. The only way i can imagine him having that high of a tax liability is if he is an S Corp. If he is an S Corp and he does not disburse all his profits, the corp will get taxed for whatever money they have and he will get individually taxed on the amounts that he recieved as compensation. Easy way to reduce his tax burden is to make sure the coffers are empty at the end of the year.

Stompy

Even if it was that high...

Would you risk ruining your country for a little bit more money? 5% isn't a lot.

You have to pay for government services somehow, you know.

Also, if we kept up this expensive ass war while Bush is giving tax cuts, how do you expect we make up those costs?

I'd gladly pay more taxes if that means things get straightened out.

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Kalibah

If kerry takes away the tax cut to people that make over 200 thousand a year, it will HURT small buisnesses. A lot of small buisnesses make over that amount. Also if he raises minimum wage to 7 dollers an hour , as he hopes to do over hten ext few years, it will be harmful to small buisnesses. Trust me - I know a guy who owns his own bike shop. He has 2 workers, a wrenchmen and a salesmen. The salesman will get canned... he simply cannot afford to pay that much to both men, when if worst came to worst he could pay 1 person...


That said I saw an article in teh wallstreet journal on Tuesday - In 2003 John Kerry + Terasa Hienz paid a 12% TAX RATE

12 percent- because he has all his money hidden away... Bush paid 30%. My friend who owns a bikeshop pays around 35% i believe. Hes not conservative- but hes voting for bush

cthulu23

If we accept the idea that raising the minimum wage by any amount results in an unacceptable hit to business then one must also accept that the minimum wage itself is harmful and unneccesary. Does anyone here actually believe that?

Kalibah

http://www.atr.org/pressreleases/200...xes-9-7-04.htm


Kerrys Paid Just 12% in Federal Income Taxes in 2003
Massachusetts Senator paid skimpy tax bill despite calls for rich to "pay their share"

WASHINGTON, D.C. - John Kerry has repeatedly called for increasing taxes on the "wealthy" so the affluent "pay their fair share" for the "common good." Ironically, John and Theresa Heinz Kerry, who comprise one the richest families in the world, pay relatively little income tax.

Last year, John Kerry and his wife paid just 12% of their combined income in income taxes, despite their assertion that the rich should contribute increased amounts to government coffers. In contrast, President and Mrs. Bush, who had a substantially lower income than the Kerry's, paid over 28% in taxes.

"John Kerry wants other Americans to pay higher taxes while he and his wife manage to pay a rate lower than most of the middle class," said ATR President Grover Norquist. "Apparently, the Kerrys think everyone else should pay higher taxes but them."

In addition to finding loopholes and write-offs to decrease his taxes, John Kerry has declined to pay a small, voluntary tax in his home state. The Massachusetts state income tax code contains a provision allowing payers to contribute an extra .6% of their income to benefit the commonwealth. Kerry has consistently failed to pay the extra money, which would have amounted to $687 dollars last year.

"John Kerry thinks other hardworking Americans should pay more taxes while he and his billionaire wife pay as little as possible," continued Norquist. "The hypocrisy John Kerry shows on his own tax return is not indicative of the character and judgment America needs in our President."
















President Bush+ Laura Bush paid paid 30%.
John Kerry + Teresa Hienz paid 12%


Thats why no politican will vote for a FLAT TAX RATE - The WSJ said that in theiur calculations John Kerry would be paying 500 thousand more a year to the federal goverment at a 17% tax rate

Kalibah

No I just believe that raising it to 7 dollers an hour would be.... thats an awful big jump that I don't think many small buisnesses could handle - were still climbing out of recession- and now would not be a good time to smack down the progress made wiht Bush's tax cuts

astralusion

i don't know but i always though minimum wage increases screwed over small business owners, i not being one couldn't really comment, but just you know in econ they tell you that, and i mean yeah it would be nice if people make more money, but then that money is coming from small businesses, and big businesses too, but eh whatever...sorry i have no answer for your question is my point i guess

cthulu23

As was stated in the thread dedicated to this particular misinformation, Kerry and his wife file seperately so the 12% number is completely meaningless. Combining their filings may make for good propaganda but it has little to do with reality.

cthulu23

Kerry said he would raise it to $7 over the next decade so there wouldn't be one big jump.

filtherton

Isn't there a lesson about the economics of running a profitable business here? If you can't afford to pay two employees $7 an hour each, than you probably shouldn't be in business. It is not kerry's fault that your friend has very small margins.

Beatlefan58

There's a better lesson about the role of goverment and attitudes toward businesses in your note. It's not our place to say someone "probably shouldn't be in business" or the operating margin isn't large enough. Goverment shouldn't be running folks out of business with taxes and regulation; it hurts the employee, the employer and even the customers of a small business.

What is overlooked is that an increase in the minimum wage isn't paid by the employer, at least not in full. The cost of goods and services go up. Kerry is paying back the unions with this--union contracts are often tied to the minimum wage (X dollars above the current minimum wage).

But when I hear someone say "the minimum wage ought to be $7.00", I ask, "why not $8.00? why not $12.00?". No one is going to live well on $7.00, either. It's a training wage, an entry level salary, not one that someone should aspire to.

filtherton

I guess i think that what really hurts the worker is the fact that we've set up this pseudo free market so as to pay a massive portion of the workforce next to nothing. History is a pretty solid indicator of the tendency for unregulated business to rape anyone who gets in the way of the bottom line. I know that worker safety is expensive too, but i could really care less if in implementing safety regulations certain employers are put out of business. Cry me a river.

Beatlefan58

I'm not opposed to safety law, nor overtime laws. I am fully aware that some employers would take advantage of workers if left unfettered. What I do oppose is the notion that any of us should tell someone what kind of profit is enough (or not enough). And even there, I'm not advocating the anti-gouging acts during times of emergency be dropped. The free market system needs as few restrictions as possible; that doesn't mean NO restrictions.

athletics

The idea of a 'business' paying taxes is slightly askew. If you increase taxes due from a business 10%, where does that money come from? Either from the base employee salary pool, or they raise their prices to cover the cost.

So either the employees get raises next year, or the price point of the goods/services increase. So 'individuals' end up paying those taxes.

athletics

Remember if you are self employed, you pay twice the Social Security tax. So thats 6.2 twice for 12.4 %. Ouch!

athletics

Excellent observation. The more power a company sets the boundries of their wages, the better.

But lets get to the real issue of a minimum wage increase...many Union contracts stimpulate wages. They commonly read that the minimum wage for a Union employee will be $X above minimum wage. If min wage goes up $2, Union workers pay goes up $16 a day. Not much, huh? But if a company has 100 Union EE's...$1,600 a day. $83,200 a year...just in government forced pay increase.

martinguerre

Only under certain incorporation methods. True small businesses are mostly filled as S-Corporations, or similar LLC structures. The income passes directly from corporation to the owner, with no taxation. The income is reported just like a salary, and taxed accordingly. For this not to be applicable, there have to be a considerable number of employees, or if the corp is publically traded. Your example is disingenous at best...the information provided misleads more than it informs.

Arroe

Ok, then MORE people are UNEMPLOYED. How, please oh please tell me how this helps our economy?

jimbob

You might want to consider personal tax as well as business tax: if most of your customers are from the top 15% of earners then you will increase revenue by voting for a regressive tax regime where the rich pay less and can spend it on your products. If you sell to the lower 85%, as most businesses do, then a progressive tax regime would be better (ie Kerry). Even if your business tax goes up by 5% you could still be in a better position by virtue of having increased turnover.

A candidate that promises to cut the tax burden as a whole could also be bad for you if you sell to the 85%, as your customers might find themselves paying for local amenities which used to be free, maybe taking their kids out of public school etc. That will depend on the State's progressive/regressive tax regime though, as they will be landed with the bill when federal taxes are cut.

If you sell to businesses rather than individuals then you need to consider their own customer profile.

I found a good article a few days ago with recent data on tax cuts and growth which demonstrates how an economy only picks up when it's the poorer in society that are the beneficiaries of the cuts. Can't find it now though!

One last point: if your business is worth tens of millions and you're thinking about retiring soon then be greedy, go for the short-termist solution and vote for Bush.

filtherton

Since when do bush supporters care about unemployment?

What i'm saying is that if a company can't afford to be a good corporate citizen than it shouldn't be in business.

It is my opinion that an economy should serve the citizens who use it. If it is possible for someone to work 40+ hours a week and not be able to support themselves, than this economy thing isn't doing what it is supposed to.

Beatlefan58

As far as I can tell, they care as much as Clinton supporters did in 1996, when the unemployment rate was where it is now.

And while you have a right to that opinion (and in the context, let's remember you were speaking of being able to pay two workers $7.00 an hour), it is not the goverment's place to tell a business owner that is just getting by that it shouldn't be in business. It's just not the role of goverment.

I can tell we have a different idea about what the economy is, and I'll leave it at that. But even under your notions, the individual has to be responsible for what they do with the money they receive. I'm not falling into the trap of trying to tell another citizen how to spend his/her money, but let's be realistic here. Too many of those living on entry level wages don't understand economics well enough to live on such. When a person burdens himself with debt (payments on a new auto, credit card bills, etc.), dumb decisions about procreating (before one should have a child, one should be able to support oneself) and poor spending choices (cigarettes, eating out often, and the like), a check on the minimum wage isn't going to sustain that person. I handle bankruptcy cases in my law practice, and I see of what I speak all the time.

jonjon42

well it's cheaper to get something off the dollar menu then eat at home. Dude the living wage (read: wage to survive) in my home area (Montgomery Co., MD) is over $10 dollars an hour. I'm sure there are some places where $5.50 may let you survive in some places, but it's still insanely low. We haven't adjusted it in 7 years. That $5.50 is worth a helluva lot less today then it did 7 years ago. It's high time we raised it.

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Beatlefan58

Ok, Jon, shall we just boost it to $10 an hour now? If that's the living wage, anything less would be cruel, right?

Of course, the notion that the minimum wage should be one on which a family is to survive on is foreign to what it is intended to be--a training wage.

martinguerre

Yeah. Tell that to the people who earn it, or only slightly above for most of their careers. Tell it to the people who have to work multiple jobs at or around min wage just to pay bills. Face it...if the economy decides that a large percent of workers don't do enough to justify a living wage we have two choices:

1. Accept poverty wages as the economy dictates and employers are able to enforce.

2. Do something about it.

Dunno about you, but i choose 2.

Beatlefan58

And just how are you going to do the second option? You can't make employers pay more than they can afford. Sounds like you are advocating eliminating a large number of those jobs, thus letting the low wage earners compete for the ones that are left. Not too compassionate, that is even more Darwinian than eliminating the minimum wage altogether.

And those that are left in the workplace get to pay more for the goods and services they pay for, because the cost of producing goods and services will rise at about the same level as the wages.

(At this point, I should say that I'm advancing some of these positions for the sake of discussion; for example, I do NOT favor total elimination of minimum wage.)

martinguerre

no...min wage is a stopgap measure. it alliviates the problem of the poor not having bargaining power for wages...but doesn't solve the issue. public education needs to aim at creating workers who are more trained and efficient so that real GDP growth can be distributed in to wages.

that said...executive compensation probably needs attention. In 1988 the average CEO made 46 times what the lowest paid worker...now that figure is more like 476 times. That jump pays a lot of those lower end salaries. Exec's deserve fair pay for their work...but so do the workers on the line.

ronnietx59

I am a small business owner who supports Kerry. He will do more for the total economy. This will improve all businesses.

As for alto92 paying 60% to taxes, get a better accountant!

Beatlefan58

Here, we agree. Some workers aren't even worth the minimum due to their lack of education/training. Now, for those that are trapped in goverment school systems and can't get a better education, that's a sad situation. Those that simply choose (or perhaps their parents chose for them early) not to get the education offered, that's not a problem that can be solved.

I don't want the goverment telling anyone what the most they can make is going to be. What I do want to see is some reforms, maybe at the SEC level, as to corporate board composition. It's the board that sets the compensation packages for the executives, and since it is money that could be paid to the shareholders, that's where the emphasis on reform should be. A company with a whiz executive may well have to pay him/her a high multiple of what the lowest paid worker gets--that's market forces coming to bear--but a board packed with cronies (a la Tyco) that isn't looking out for shareholders should be held liable.

filtherton

Only because that is your opinion. It is the government's role to tell bad corporate citizens that they need to change or cease existing. This is nothing new. We just differ on the definition of what constitutes a bad corporate citizen. The role of the government it to see to the quality of life of all of its citizens, the whole pursuit of happiness thing.



Too many of those who think they understand economics fail to understand that economics is more religion than science. That is to say it is more about faith than reality.

Beatlefan58

Partially correct. The goverment is there to make sure the citizens can pursue happiness; that is what is guarenteed, not happiness itself. It does not exist to "see to the quality of life of all its citizens", especially if the citizens don't take some responsibility for themselves.


I have no idea what you mean here. If directed at me, I understand microeconomics very well, and have a good but not complete grasp on macroeconomics. Rather than calling it a religion on either scale, it would be more proper to study economics with an eye on the sociological and psychological aspects of it. Crunching hard numbers can tell us some things, but it often can't tell us WHY the numbers are what they are.

filtherton

I'm not sure how happiness can be pursued when it is possible for someone to have to work more than 40 hours a week just to be able to afford the basic neccesities.