Monday, Mark read an article by Ned Barnett in the American Thinker outlining the tax INCREASES all of us will see under a Barack Obama administration.
It’s called, ‘Spreading the Wealth’.
Obama’s Tax Lies (aka Spreading the Wealth)
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This is a letter I sent to John McCain and Sarah Palin.
Senator John McCain and Governor Sarah Palin,
I have written a few letters over the past weeks and I still want to encourage both of you! We can win!!!
I want to tell you just a little about myself and then tell you something I thought about at lunch time today. I am 44 years of age with a lovely wife and one son age 13. I am a Superintendent for a General Contractor here in the Phoenix Arizona. (Palisade Construction) Yes one of those small companies that could get hurt by new taxes. I have been working full time since age 16. I have not been to college, however I have learned more in the last ten years then any time of my life. I think you should consider showing the American public my opinion or even use it in a commercial. I do not need the credit, I just need a victory!
Here we go and you have to assume we still want to be a free society.
Taxes and jobs:
Should we raise taxes on business? If I understand correctly Mr. Obama wants to raise the tax rate from 36% to 39% on small business making $250,000 and up. We will use company x as our example with 5 employees and the company grosses 1 million dollars a year. Since we are using a generic company we do not know the cost of running this business so we won’t include any cost in this exercise. At the current 36% the federal government would get $360,000 in tax revenue. Under Mr. Obama’s new rate of 39% the revenue is $390,000 and we assume that is where we get the funds to pay the tax cuts for the rest of us.
Over time will the revenue be there the government is counting on? Let us take a closer look:
The difference is $30,000 and the employer has to lay off one worker as that is close to one salary. Now that we have raised his taxes we are going to require him to pay health insurance. According to Obama the cost could be $10,000 a year per person making that another $40,000 a year. Now the company has to let another worker go! Reducing his work force by 40%!
Now that you have reduced the workforce your production is down in year two. We will assume for a moment that through hard work you only lose 30% of revenue even though you have lost 40% of workers. You now gross $700,000 a year. At 39% the tax revenue is $273,000. A whopping $117,000 less than the government had planned on! If you follow democratic patterns the taxes have to be raised on people making less than the original $250,000 to keep the revenue or even pay for other government programs. If the company revenue only dropped 20% and they made $800,000 the tax on that at 39% is $312,000.
Let us go the other way.
Let us cut the tax rate by the same 3% that Obama and others say is not much. The company now has $30,000 under current law and $60,000 more than the 39% rate. What can a company do with the money? Maybe they hire an employee rather than letting one go. Increasing the workforce by 20%. They continue working hard and grow revenue 20%-25%. The company makes $1,200,000 at a 33% tax rate the federal revenue is $396,000! If the company makes $1,250,000 at the 33% rate the federal tax revenue is $412,000. A whopping $22,000 more than the 39% rate on the original 1 million dollars!
Maybe they pay the current employees better as production has improved.
We also hired more workers instead of letting them go, keeping the unemployment rate down rather than up! We also did not even mention the fact that with more people working more people are paying taxes!
That is the reason lowering taxes on any size company helps the economy and employment rates!
If you follow each path to conclusion one builds wealth and the other destroys it. One gives everyone a fighting chance, the other relies totally on government which goes broke eventually! Now under a free society no one can make these companies do the right thing, but we must leave it up to them not government. Leave it in the hands of the people! Government is full of good intentions, but so is the road to hell! Keep us safe and stay out of the way!
Mr. Obama claims he is living proof of the American Dream and I would agree. The rest of us had better not dream too big, be too successful, or reach too high. Big brother will decide that for us now under Obama’s plan.
Yes, read Barack Obama’s lips. Taxes for all brackets lapsing back up to 2000 rates is not really (Obama says) a tax increase. Raising the capital gains tax from 15 to 20% on the 50% of all Americans owning stock is not really (Obama says) a tax increase. Raising taxes on business, the cost of which they will add to prices so we don’t see the raise to taxes on us, is not really (Obama says) a tax increase. Raising the ceiling on taxable income (for Social Security) that applicable employees will pay and employers suck up and match (or we pay for when employers cut employees to save on payroll) is not really (Obama says) a tax increase.
BTW, I bet Joe Biden ate Barry’s donut.
(Read Ned Barnett’s article at the link above to get the joke).
Although Clinton raised taxes they were not raised dramatically to pre-Reagan levels and in 1997 he cut the capital gains rate and that is one of the most significant ways to generate trade and economic growth. As a spin on that the government revenue increases. Obama is an economic socialistic suicide machine who studied socialism from 101 to 404. Any courses he took in economics he forgot or else he was privately tutored by Chavez. I suspect both because there is no other way to explain his ideas outside of a padded cell.