Video: How Obama tax hike hurts an Ohio small business

posted at 8:41 am on July 24, 2012 by Ed Morrissey

People know that raising taxes in a recession is a bad idea.  Even Barack Obama acknowledged that, in 2009:

But why is it a bad idea to hike taxes in a recession, especially on people with capital at work in the economy?  Meet Arnie Kaufman, an Ohio small businessman who runs his pipe manufacturing business as an S-corporation, and whose business will get hammered by Obama’s proposed tax hike.  Kaufman explains that businesses can’t print their own money, and that capital seized by the government is capital that won’t be put to use in expanding the business.  It’s either expansion or taxes, as Kaufman explains:

http://www.youtube.com/watch?v=Ag5BbNgaORY

Eh, what’s he complaining about?  It’s not like he and his father built that business.

The office of the House Majority Whip, Rep. Kevin McCarthy, put this video out this morning, along with this press release:

Founded in 1958 by Arnie’s father Martin Kaufman, Woodhill is one of 940,000 family owned and operated small businesses that would be hit with higher taxes under the President’s proposed plan, according to the National Federation of Independent Business.

“It’s a snowball effect.  If the taxpayer doesn’t have the money in his pocket he’s not going to spend it and that dampens sales,” Kaufman continued.

A recent report published by Ernst and Young, confirms the far-reaching devastation that the President’s plan would have on the economy: 710,000 fewer jobs and economic output reduced by 1.3% in 2013.  The report continues on to conclude: “Specifically, this report finds that the higher rates will have significant adverse economic effects in the long-run: lowering output, employment, investment, the capital stock and real after-tax wages when the resulting revenue is used to finance additional government spending” (Executive Summary, Page i).

“With the economy already at a near stand still, the President’s proposed tax hike on American small businesses comes at the work possible time for job creators,” Majority Whip McCarthy said.  “Independent reports confirm that raising taxes on more than 900,000 small businesses threatens 710,000 jobs and would reduce economic output by 1.3%.  It just doesn’t make any sense to punish American families and small businesses already struggling to make ends meet in this tough economy.”

BY THE NUMBERS: Looming Tax Hikes and the Obama Economy

  • $2,679 – Average Ohioan’s tax increase per tax return if the Obama tax hike goes into effect
  • $2,183 – Tax increase on a family of four earning $50k per year if the Obama tax hike goes into effect
  • 41 – Record number of straight months with unemployment at or above 8%
  • 39.9 – Average number of weeks that it takes to find a job
  • 23.4 million – Americans unemployed, underemployed or have given up looking for work

On July 27, Majority Whip Kevin McCarthy will lead House Republicans in Stop the Tax Hike Day – a day of district focused events drawing greater attention to the fact that the President’s tax hike plan would put the brakes on what is already anemic economic and jobs growth.

Before the August recess, House Republicans plan to vote on extending all the current tax rates for one year to ensure greater economic certainty for hardworking American families and small businesses during this tough economic time.

One year doesn’t bring a lot of certainty, of course, but there is little hope that the Democrats in the Senate or Obama himself will take 2009 Obama’s own advice, even as the economy slips toward recession.  In 2010, a Congress controlled completely by Democrats joined forces with Obama to fight the election on the issue of economic fairness, and then punted the question two years after getting humiliated in the midterms.  Now they want to fight the same battle and expect a different outcome, but the longer they wait to extend the current tax rates, the more businessmen like Kaufman have to prepare for the possibility theywon’t — and that means Kaufman and other small businessmen won’t put any risk into expansion, which then means that we won’t see any significant job creation for perhaps as long as another year … if then.

That’s why raising taxes in a recession is a bad idea.  Too bad 2012 Obama doesn’t consult a little more closely with 2009 Obama.


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Pay up – Obama/Biden 2012

Electrongod on July 24, 2012 at 8:45 AM

anyone have an ending for this ….If Only Romney Would Release His Tax Returns …..I used…. Everyone would get a pony for their birthday

If Only Romney Would Release His Tax Returns….Every One Would Get A Pony For Their Birthday

http://rightwingfringe.blogspot.com/

Aggie95 on July 24, 2012 at 8:46 AM

$2,183 – Tax increase on a family of four earning $50k per year if the Obama tax hike goes into effect

Mine will be wee bit higher..

Electrongod on July 24, 2012 at 8:47 AM

Making government big and onerous enough is a sneaky way to bring back slavery.

IlikedAUH2O on July 24, 2012 at 8:47 AM

…but taxes aren’t taxes taxes…

KOOLAID2 on July 24, 2012 at 8:48 AM

…”I’ve saved every American family $3,650 eleven seventy in taxes!”…or something like that!

KOOLAID2 on July 24, 2012 at 8:50 AM

Too bad 2012 Obama doesn’t consult a little more closely with 2009 Obama.

I think he has. That’s why 2012 Obama is still proposing tax hikes on “the rich” and blames Bush and the GOP for all of his failures.

Doughboy on July 24, 2012 at 8:52 AM

Double down there bub

cmsinaz on July 24, 2012 at 8:53 AM

Good luck trying to get people to pay that. It isn’t chump change. People are suppose to come up with almost $200 bucks a month to throw at the aholes in DC? Ha!

Blake on July 24, 2012 at 8:54 AM

———————————————————–
|You didn’t build this bumper sticker |
|………….Obama/Biden 2012……………|
———————————————————–

Electrongod on July 24, 2012 at 8:54 AM

Those of us who pay federal taxes and are not receiving direct federal subsidies like SNAP and welfare payments are obviously not paying their fair share. Unlike the those who are receiving these subsidies and not paying federal taxes; of course.

See the logic here?

BKeyser on July 24, 2012 at 8:55 AM

———————————————————–
|You didn’t build this bumper sticker |
|………….Obama/ BidenBiteMe 2012……………|
———————————————————–

Electrongod on July 24, 2012 at 8:54 AM

…I’ve seen ^ that one already!

KOOLAID2 on July 24, 2012 at 8:57 AM

raising taxes in a recession is a bad idea.

But the recession ended in 2009!!! Happy days are here again!

juanito on July 24, 2012 at 8:59 AM

…I’ve seen ^ that one already!

KOOLAID2 on July 24, 2012 at 8:57 AM

I spent upwards to about 1 minute trying to get the format on the lines to come out right…to make a box..

Dang HTML…
:)

Electrongod on July 24, 2012 at 8:59 AM

I admire these companies willing to be in these videos, knowing the barack regime will use every agency of the regime to utterly destroy them the very next day.

Rational Thought on July 24, 2012 at 8:59 AM

I admire these companies willing to be in these videos, knowing the barack regime will use every agency of the regime to utterly destroy them the very next day.

Rational Thought on July 24, 2012 at 8:59 AM

I sure hope that the Barrack Wrecking Ball is creating a government job for every private job he destroys….

Electrongod on July 24, 2012 at 9:06 AM

I sure hope that the Barrack Wrecking Ball is creating a government job for every private job he destroys….

Electrongod on July 24, 2012 at 9:06 AM

Not really. They will cut welfare checks in deflated Obama dollars and provide automatic enrolment in the DNC. Your dues will be taken directly out of your monthly stipend.

Annar on July 24, 2012 at 9:21 AM

Huh…
Kinda slow this morning..

Everyone must be going to their greedy capitalistic jobs.

Electrongod on July 24, 2012 at 9:22 AM

Arnie, Mazal U’brochuh!

Shy Guy on July 24, 2012 at 9:25 AM

Electrongod on July 24, 2012 at 9:22 AM

A lot of old school posters are gone…

OmahaConservative on July 24, 2012 at 9:29 AM

It’s impossible to have a rational discussion of economics with someone like Obama. Obama proceeds from the view that government alone enables a person’s ability to create and acquire wealth. Therefor, everything belongs to the government in the end.

On our side, we believe that if you can get rich within the limits of the law, go for it!

Government exists to serve and protect the people. Government exists to provide equal opportunity for success, and to be a bastion that opposes crimes committed against a citizen, with the force of law that sees no one man somehow above his neighbor.

A free people see government as a tool for us all.

Obama, the Democrat Party, and liberals in general see government as a cudgel, a force that no one has ‘right’ to resist.

Are there no limits to the sickness of liberals?

Liam on July 24, 2012 at 9:31 AM

Hope he has good tax accountants…he is going to need them in the next six months.

right2bright on July 24, 2012 at 9:33 AM

You didn’t build that.

dont taze me bro on July 24, 2012 at 9:34 AM

A lot of old school posters are gone…

OmahaConservative on July 24, 2012 at 9:29 AM

Not permanently I hope.
Just on vacation?

Electrongod on July 24, 2012 at 9:39 AM

Coped from an email I received:

People are being robbed of their dignity and don’t even know it! For generations they have been handed the “Fish” not the “Fishing Pole” Wake up America!!!

The folks who are getting the FREE STUFF don’t like the folks who are paying for the FREE STUFF, because the folks who are paying for the FREE STUFF can no longer afford to pay for both the FREE STUFF and their own STUFF.

And the folks who are paying for the FREE STUFF want the FREE STUFF to stop.

And the folks who are getting the FREE STUFF want even more FREE STUFF on top of the FREE STUFF they are already getting!

Now…the people who are forcing the people who pay for the FREE STUFF, have told the people who are RECEIVING the FREE STUFF, that the people who are PAYING for the FREE STUFF are being mean, prejudiced, and racist.

So…the people who are GETTING the FREE STUFF have been convinced they need to hate the people who are paying for the FREE STUFF by the people who are forcing some people to pay for their FREE STUFF and giving them the FREE STUFF in the first place.

We have let the FREE STUFF giving go on for so long that there are now more people getting FREE STUFF than paying for FREE STUFF.

Now understand this. All great democracies have committed financial suicide somewhere between 200 and 250 years after being founded. The reason?

The voters figured out they could vote themselves money from the treasury by electing people who promised to give them money from the treasury in exchange for electing them.

The United States officially became a Republic in 1776, which was 236 years ago. The number of people now getting FREE STUFF outnumbers the people paying for the FREE STUFF.

We have one chance to change that in 2012.

Failure to change that spells the end of the United States as we know it.

ELECTION 2012 IS COMING.

A nation of sheep breeds a government of wolves.

I’m 100% for PASSING this on!!!

For all our sake PLEASE take a stand!!!

Obama (and Democratic Senators up for reelection): Gone!

Borders: Closed!

Language: English only!

Culture: Constitution and the Bill of Rights!

Drug Free: Mandatory Drug Screening before welfare!

No FREEBIES to: Non-citizens!

Only 86% will send this on. Should be 100%. What will you do?

GrannyDee on July 24, 2012 at 9:53 AM

You peons need to pay your fair share…it’s patriotic you know…

PatriotRider on July 24, 2012 at 9:57 AM

But the private sector is doing fine. Besides, it isn’t as if Arnie’s family built that business through smarts, hard work, and commitment.

Happy Nomad on July 24, 2012 at 9:59 AM

2 sisters, 7 and 4 yrs old, who built Lemonade business say Obama’s comment about business owners was “rude” http://t.co/6VCcJR1Y

Flora Duh on July 24, 2012 at 10:02 AM

The Adults Are in Charge.

Now where is bayam to tell us this is No Big F-ing Deal?

Del Dolemonte on July 24, 2012 at 10:19 AM

but, but, Obama signed into law 18 tax breaks for small business! Yeah, sure, did anyone read the fine print? It would cost the small business more to comply with getting the tax breaks than they would save by not just paying the tax.

kirkill on July 24, 2012 at 10:22 AM

Electrongod on July 24, 2012 at 9:22 AM

A lot of old school posters are gone…

OmahaConservative on July 24, 2012 at 9:29 AM

Who is John Galt?

kirkill on July 24, 2012 at 10:24 AM

Before the August recess, House Republicans plan to vote on extending all the current tax rates for one year to ensure greater economic certainty for hardworking American families and small businesses during this tough economic time.

Gimme a break. One year? Talk about small ball. Have some stones, GOP. Several years or “permanently.” Require an overwhelming Dem Congress to change it.

BuckeyeSam on July 24, 2012 at 10:28 AM

Gimme a break. One year? Talk about small ball. Have some stones, GOP. Several years or “permanently.” Require an overwhelming Dem Congress to change it.

BuckeyeSam on July 24, 2012 at 10:28 AM

Good idea. Force all the latrine rats known as Democrats go into the August recess (and campaign mode) having to explain why they voted against tax relief for hard-working Americans who don’t belong to unions or one of the other favored groups sucking the life out of the American economy.

Happy Nomad on July 24, 2012 at 10:37 AM

Business owners have gone on a different and much milder strike than did John Galt, but a strike nevertheless.

GaltBlvnAtty on July 24, 2012 at 10:38 AM

Looks like quite a few consumers have gone Galt as well. Lots of people checking out of the economy right now. Obama still has his seed money to sprinkle around come September and October.

November will be epic.

DanMan on July 24, 2012 at 10:42 AM

Another lousy number out of the Richmond Fed this morning:

http://www.businessinsider.com/richmond-fed-manufacturing-july-2012-7

I always thought our Presidents, ultimately, could not hold down the American economy — that we would have our downturns, but Americans’ economic drive, natural optimism, and inventiveness would overcome whatever obstacles an Administration may put in its way.

Obama is proving me wrong.

bobs1196 on July 24, 2012 at 10:44 AM

If the Senate and House would actually pass a budget…and do so annually, like they are required to…maybe then we could rationally then look at correcting the tax situation.

We’ve been addressing budgets and taxes like a lot of folks, too many folks, address a friend or loved one with an alcohol problem. Instead of cutting them off at the pockets, refusing to enable them, they make allowances, one more drink won’t hurt, and a few more dollars “to tide them over until they get on their feet” won’t be such a bad thing…

Well…it is a bad thing.

So long as we, the American People, allow our Congress to get by and go through this continuing resolution garbage, and we continue to keep pouring money down a rat hole…things are not going to get better…ever.

Next time you go to the store, or the car dealership, or purchase a home, just tell the seller you’ll pay whatever they wish and they can raise the price any time they want after the sale, and demand payments any time, with interest, and you’ll gladly fork over more and more money…because, well, just because…

This is what we’ve been doing with our federal government for far too long.

Letting them get by, letting them have just one more drink, giving them a little bit more walking around money because they “need” it…

And in the meantime, what good has it done any of us who pay taxes, own businesses, pay our mortgages, raise our families?

No budget?

No taxes.

A revolutionary concept.

Maybe we should all get into the spirit of our Founders, and soon. real soon.

The Constitution states “We the People” not the Congress, not the President, not the government. We, the People.

We own the government…all of it…we should be the ones who decide what that government does, especially with our money, and our children’s money and our grandchildren’s money.

It is our Right.

coldwarrior on July 24, 2012 at 11:00 AM

These ads are very important – we must win elections this fall. In MN, we MUST keep the legislature. Thus, we must focus on the next 3+ months.

But underneath all of this is the following – even if Romney wins and Rs control the US Senate and House, the leftist/progressive/liberal Democrats will continue their plan to destroy the free market system. They seem to think that THEY have the answer and if they just controlled everything, yada, yada. (They did control everything in 2009 and 2010 – but they didn’t pass what they could have passed – they wanted Rs on board) – thus, the leftist Dems are cowards.

Remember, they started after the education system in the 1930′s; the family in the 1960′s; the military in the 1970′s; etc. They now control the media, the education, the banks, way too much manufacturing, etc. Even if Romney wins, they won’t quit until they are resoundingly defeated for multiple election cycles. Their goal is twofold: POWER and destroy the free market system.

We need to push back at every level, local, city, state – you see, they cannot survive without the government paycheck. They’re killing our soul – they must be stopped.

MN J on July 24, 2012 at 11:16 AM

Ditto MN J above… the Dimocrats need to be checked at all levels… they have done “wonders” here in San Bernardino…

Khun Joe on July 24, 2012 at 12:37 PM

There are “stealth taxes” also in BHOCare.

Just got an email from my employer that said due to ObamaCare, the limit on contributions (of my OWN money) to a health savings account will be capped at less than half of what it is now!

Personally, I think ALL healthcare expenditures should be tax-exempt (I have several reasons), but by making this change, lots of people will have to pay tax on more “income”, hence, a “stealth” tax increase!

Wonder how many of these are in that bill that we had to pass to know what’s in it?

IrishEyes on July 24, 2012 at 12:38 PM

The Adults Are in Charge.

Now where is bayam to tell us this is No Big F-ing Deal?

Del Dolemonte on July 24, 2012 at 10:19 AM

I was going to comment that bayam will show up and tell this guy he doesn’t know how to run a business and that he doesn’t know that he’s talking about.

gwelf on July 24, 2012 at 2:18 PM

Looks like quite a few consumers have gone Galt as well. Lots of people checking out of the economy right now.

DanMan on July 24, 2012 at 10:42 AM

You are more right than you know. I know several people that have diverted more of their business “underground”, only interacting with individuals (not businesses) on a cash-only basis.

dominigan on July 24, 2012 at 4:00 PM

Wonder how many of these are in that bill that we had to pass to know what’s in it?

IrishEyes on July 24, 2012 at 12:38 PM

There are approximately 21 taxes embedded in Obamacare.

dominigan on July 24, 2012 at 4:02 PM

Wonder how many of these are in that bill that we had to pass to know what’s in it?

IrishEyes on July 24, 2012 at 12:38 PM

There are approximately 21 taxes embedded in Obamacare.

dominigan on July 24, 2012 at 4:02 PM

I should have noted that I work for a small healthcare company that specializes in saving money for employee self-funded healthcare plans.

According to our owner, who has read the entire Obamacare law and specialized in healthcare law before starting our company years ago, #4 is the worst of the lot.

By her estimations, #4 will result in nearly every business with fewer than 500 employees dropping their healthcare coverage within the next 15 years… namely because the tax triggers are indexed to a schedule that increases at less than half the rate that healthcare costs are rising. Meaning that within the next 15 years, every single employer healthcare plan will fall under that tax.

And while large corporations may be able to shoulder the burden for a while, small and medium-sized companies will not.

dominigan on July 24, 2012 at 4:12 PM