Obama shill Mel Levine has never been shy about throwing around his AIPAC credentials. That’s a good strategy given how his pro-Obama arguments are mindbogglingly stupid, but it does beg a question: given how the Obama campaign is on……

In the next few years, I plan on starting up my own small business. I simply will not, and probably will not be able to, do this if Obama is elected.

Anna on October 16, 2008 at 10:53 AM

These elitist morons have no understanding of what it takes to run a business. The 36% is bad enough, but another three percent just eats further into profits. At that point it is not worth making that much money. You stifle your business growth to stay under the punitive rate.

As if that is the point. The point is that it is SOCIALISM! Taking from those who Oslime-a deems rich and giving to those who he deems worthy is the very definition of a Marxist agenda.

When he reaches that 39% rate it’s when, after all expenses are accounted for, he is literally earning 250k.

mycowardice on October 16, 2008 at 12:51 PM

You are somewhat on the right track with your logic. However, when you say he is making literally $250k you need to keep in mind that profits for small businesses are considered personal income. So, if his business profits (by the way, taxes are on net income, so we can all stop that discussion) $250k he is in the bracket.

These profits include what he is making, and anything he is going to invest in the future. It is difficult to run a business without a good amount of cash on hand (it is a specific line item in any budget), but when you own a small business I don’t remember there being any way to shelter that from qualifying as income.

So, his profits include what he sets aside from himself, and his cash on hand. Then you also include Accounts Receivable and Payable, the monies that are on credit: be they orders for his business, or orders his business has made that are not yet paid. Depending on the accounting practices of Ohio it is possible that this will actually inflate his “profits” and increase his tax burden (I don’t know what they have on top of GAAP, sorry).

Either way…really long-winded way of just pointing out that what you are thinking are just profits for Joe…are his net increase in cash position for the year. Increasing taxes have a HUGE effect on both his take-home pay, and the money he has for future operating costs and expenses.

Biden: I don’t know Joe the Plumber
Joe Biden appeared on NBC’s Today show this morning to respond to last
night’s debate, which has made a national icon out of Joe Wurzelbacher,
AKA Joe the Plumber.
Instead of identifying with……

Can you give me a specific expense that you couldn’t deduct, besides your own salary?

mycowardice

I’m not an accountant, but off the top of my head I’m pretty sure that if Joe the Plumber had his bookkeeper take some accounting classes at the local community college, the tuition would be deductible. If Joe did his own books and took the courses himself, the tuition would not be deductible. Vehicle costs can also be treated differently.
While the lease cost on a company car for employees is deductible to the business, if the same car is provided to the proprietor, the IRS may consider the lease value to be taxable income.

Should five percent appear too small
Be thankful I don’t take it all”
Taxman – George Harrison

I prefer tax policies that foster the creation of wealth, not redistribute it.

Rich liberals like higher income taxes because, like most rich folks, their income isn’t their wealth. Even Warren Buffet’s annual income is a small fraction of his net worth. Start taxing assets and you’ll see the limousine liberals start to squeal. Rich liberals don’t mind death and estate taxes because they have lawyers and accountants who shelter their assets, like Joseph P. Kennedy Enterprises, which uses offshore accounts and holdings to keep Ted well supplied with Chivas and the Kennedy fortune out of the hands of the IRS.

Taxes for thee, not for me.

Our founding fathers fought against taxation without representation. Now we have a Bizzaro world variant where almost half the population pays no income taxes but elect politicians who tax others. The top 5% of income earners pay 70% of the total individual tax revenue.

Is that like Thomas the Train?

There aren’t any “Joe the plumbers” making $250K in Biden’s neighborhood because they can’t afford to live there. Biden lives in a large lakefront home (one report says 7000 sq ft, another says 10,0000) on a 4 acre lot that also includes a carriage/guest house. It’s a former DuPont family mansion (that Biden bought in a sweetheart deal) and the neighborhood still includes members of the DuPont/Smith/Brown family. The average property value in Biden’s zip code is $665,000 and the 2004 Average Adjusted Gross Income (AGI) for that zip code was $308,483. If there are any grocery store owners that are Biden neighbors, they are more likely to own a chain of stores than a mom & pop bodega.

Not all expenses are deductible. If you own a LLC or S-Corp, what you can’t deduct as a business expense is considered taxable income. Obama, like other leftists, doesn’t like self-employed people because they don’t have a W-2 paycheck that can have taxes withheld.

rokemronnie on October 16, 2008 at 12:49 PM

Can you give me a specific expense that you couldn’t deduct, besides your own salary?

As for the net vs gross, Obama’s plan seems pretty clear to me. He is talking about marginal tax rates:

FACT #3: Under the Obama Plan, No One Will Pay Higher Tax Rates Than They Paid in The 1990s.
Barack Obama believes that any responsible candidate must put forward specific ideas of how they would pay
for their proposals to put us back onto the path of fiscal responsibility. That is why he has called for repealing a
portion of the tax cuts passed in the last eight years for families making over $250,000. But he would limit all
rates to be at or below what they were in the 1990s. Families making over $250,000 would pay the 1990s
marginal income tax rates – of 39.6 and 36 percent – and capital gains and dividend tax rates of 20%. Obama’s
20 % capital gains rate is the lowest rate from the 1990s, and his 20% dividends rate is
39 percent lower than the rate President Bush proposed in 2001, and lower than all but 5 of the last 92 years we
have been taxing dividends.

Also, isn’t the 39% tax rate applied on your net income? Wouldn’t all your expenses be taken off anyways first? In other words, the 39% would come out strictly on the money that is going directly into your pocket?

Not all expenses are deductible. If you own a LLC or S-Corp, what you can’t deduct as a business expense is considered taxable income. Obama, like other leftists, doesn’t like self-employed people because they don’t have a W-2 paycheck that can have taxes withheld.

Also, isn’t the 39% tax rate applied on your net income? Wouldn’t all your expenses be taken off anyways first? In other words, the 39% would come out strictly on the money that is going directly into your pocket?

mycowardice on October 16, 2008 at 12:17 PM

It doesn’t matter. Most small business are grown by increasing numbers of employees, and to a large extent that growth is initially funded by the employer taking less money till increased production catches up. If that money goes for increased taxes(wealth redistribution), there is less available for increased payroll, even if it is deductible as expense. No new hires and maybe even some layoffs. Small business owners seldom have a static personal income, particularly when starting out. They sacrifice to get ahead. With Obama, they sacrifice so he can redistribute their success. You can’t wiggle around it.

OR

Just deal in CASH!

Also, isn’t the 39% tax rate applied on your net income? Wouldn’t all your expenses be taken off anyways first? In other words, the 39% would come out strictly on the money that is going directly into your pocket?

mycowardice on October 16, 2008 at 12:17 PM

No one knows because Obama is not clear on whether its going to tax Net, or Gross, income. Devils in the details, and Obamas plan is VERY short on details.

Even last night, he at one point talked about 200K being the level, then changed it next sentence to 250K….

factoid on October 16, 2008 at 11:19 AM

Lorien and others have already addressed this post. . . but the problem is the SPENDING! The Federal Government’s annual budget is 3 TRILLION DOLLARS!

That’s every year. Three Trillion is before the bailout talks. If they can’t run government with 3 trillion dollars, they aren’t going to be able to run it with 4, 5, or even 6 trillion dollars. They will never have enough. . . and in trying to get more, they will force people to fire workers to pay taxes.

The business owner could use that 900 dollars much more than the government. It’s funny that Obama thinks 250,000/year is a LOT for a small business. . . but 3 TRILLION/year for the government is not NEARLY ENOUGH. The government has enough money – they just waste it.

LOL. You manage to confuse two issues but we’re used to it. The economy was strong under Clinton because he was riding the wave of Reagan tax cuts and the end of the Cold War which he used as an excuse to gut our military by reducing defense spending. If you managed to comprehend the posts above, you should understand that increasing self employment taxes means there is less money to grow or even maintain the business. Sheesh!

a capella on October 16, 2008 at 12:10 PM

No, it’s you that is managing to separate two issues which are linked. The statement was “if the rate is at 39%, people (like Joe) won’t take the chance of launching risky business”. That’s what it says.

You are giving me an example where a 39% rate did not prevent a strong economy. That’s my point. At best, it’s an oversimplication to state that a 39% tax rate will prevent people from doing what Joe the Plumber claims he wants to do.

Also, isn’t the 39% tax rate applied on your net income? Wouldn’t all your expenses be taken off anyways first? In other words, the 39% would come out strictly on the money that is going directly into your pocket?