In the last nine months, our federal government has bailed out big business left and right. Wall Street, banks, insurance companies, car companies. The federal government serves as a backstop for big business. Big business also happens to be the ones with the deep pockets, lobbyists, and campaign cash to help get the politicians re-elected. It's a cozy little quid pro quo of the nation's power brokers. The elite taking care of their own. The government has also bailed itself out by sending huge chunks of cash to state governments via Obama's stimulus bill. Those government jobs were "saved," even as us schlubs in the private sector lost our jobs. It seems ALL the big boys in our country are "too big to fail," and the enormous bailout price tag is put on the national credit card for some future taxpayer schlubs to worry about. That's a sweet deal for the big boys in and out of government. Their risk is alleviated. Their past sins, which led to these dire financial straits in the first place, are absolved. The taxpayers serve as the sin-eaters and the pain-eaters. Btw, the federal employees health care plan is top-notch. Thank you very much, schlubs.
But with all this bailing out of the big boys, something critical has been forgotten.
70% of the jobs created in this country come from small business. How are we treating our small businesses, the ones who create the lion's share of employment opportunities ???? Let's take a look.
The liberal solution to every conceivable financial woe comes down to basically three words – "tax the rich." Then the liberals spew out inanities about how the top income tax rates used to be MUCH higher, like 70% or 90% (as if that's a good thing). What they don't tell you is that small businesses are scooped up along with the wealthy as liberals cast their tax nets, trolling for rich people. The reason for this is because 75% of small businesses are sub-chapter S corporations, who file their business taxes under the individual income tax code. When the Bush tax cuts for the wealthy expire, causing the top tax rate to increase by 4.6% to 39.6%, small businesses (the job creators) have to pay those increased taxes too. That leaves less money available to successful small businesses for investment, growth, wage increases for it's employees, and/or new job creation.
Reversing the Bush tax cuts is far from the only anti-small business measure being proposed. As part of the ObamaCare reform, the House Committee has propsed a surcharge tax for anyone making over $1 million per year, raising the top income tax rate to 45%. Last month, freshman Democrats in the House (who apparently have a lot more economic sense than many veteran Democrats in the House), sent a letter to Speaker Nancy Pelosi (D-CA) objecting to the measures, which they say will hurt small businesses. Here is a portion of that letter:
While the Ways and Means Committee states that the proposed surcharge in H.R. 3200 will only impact 4.1 percent of small businesses, we are concerned that this does not paint a complete picture. According to the Internal Revenue Service's 2002 Statistics of Income, 64 percent of households filing income tax forms with AGI above $250,000 filed as an S corporation or a partnership or filed a Schedule C sole proprietorship tax form. Further, of all small businesses, 75% are S-Corporations where the business income is passed through to the business owners' individual tax return, increasing the chances that it will be impacted by the proposed surcharge.
So, the Ways and Means Committees' 4.1% number of small businesses being affected is an outright lie. No surprise there. I'm only surprised when they don't lie. The letter goes on:
The proposed surcharge will also have a direct negative impact on manufacturers, another industry essential for our recovery. As manufacturers are capital intensive businesses, their taxable income is often higher (nearly 70 percent of the manufacturers that pay at the individual rate have an average taxable income of $570,000). Manufacturing machinery can cost of $1 million and many owners have to save for years to expand and buy new equipment. Yet those profits saved each year would be hit by the new surcharge, which could lead to reduced investment.
Especially in a recession, we need to make sure not to kill the goose that will lay the golden eggs of our recovery…Combined with state taxes, many successful small businesses — the very kind of business that should lead in creating new jobs and help us emerge from this recession — will be taxed at over 50 percent.
A 50% tax rate on job creators……Dumb-da-da-dumb-dumb. Small business can't thrive in such an environment.
The freshmen House Democrats go on to explain how, at a 50% tax rate, small businesses would also be at a huge disadvantage to the big corporations and multinationals, who would still be paying the lower 35% business tax rate. What an unbelievable coincidence. The big boys, after being bailed out and immunized from failure at the taxpayer's expense, and after all their lobbying and campaign contributions, get FAVORABLE TREATMENT FROM THE FEDERAL GOVERNMENT over the biggest job creators in the country, small business.
Btw, the letter also mentioned that $21 billion of the stimulus package funds are going to small businesses, the biggest job creators in the country. That comes out to about TWO PERCENT of the $787 billion Obama stimulus total. Do any of you STILL think that was a stimulus package ???? It wasn't. It was mostly just an extraordinarily large appropriations spending package, aka, pork. That's why it hasn't and won't work.
Let's also not forget that cap-and-trade is looming on the horizon, so Obama can "skyrocket" those energy costs for small businesses too. Then, if Card Check passes, the Big O can just drive a lot of small businesses out of business via unionization and it's unaffordable wages and mandates on business. Peachy.
Back to health care reform. The President is trying to sell the health care plan as being pro-small business, but a proposal in the House calls for employers with a total payroll above $250,000 to offer health insurance to their workers or face a surtax of as much as 8 percent. A Senate committee version would require all businesses, except those with fewer than 25 employees, to provide health coverage or pay a $750 fine per year for each worker. I've heard there will be a tax credit for businesses to provide health care (that doesn't help struggling businesses, which are many these days), but if these plans are pro-small business, I'd sure hate to see what anti-small business would look like.
That's why the business community, with the exception of those big and favored few who will prosper under Obama's plans (like Big Pharma or GE) is scared to death of Barack Obama, and is fighting back. I can't blame them. Anti-business craziness abounds.
I guess my only remaining question would be – is Obama trying to destroy this country on purpose, or is he just too stupid to know any better ?
{ 47 comments… read them below or add one }
Excellent post King… too bad Rev will still call you a shill for the rich in 3.. 2.. 1..
Wally would denounce this post, but he's still googling "small business" to figure it out.
Infact, let me just post for your detractors now, to save them their time:
Where were you when Bush ran up the defecits?
Do you only get mad when a black man becomes President?!
I checked the government recommended list of phrases and responses and you guys forgot to include "greed" and the "complete failure of capitalism". Also we need to work something in there about “blood for oil” and King being un-American to get the Queen Nancy seal of approval.
All joking aside, King you ask is Obama trying to destroy this country on purpose, or is he just too stupid to know any better? It’s the latter. The President’s arrogance is only surpassed by his ignorance.
(Hopefully that statement will cause the Rev to have a Scanners-like brain explosion)
This administration (like its predecessor) has a complete disregard for action & re-action. They rarely see the full implication of their schemes. Short term gains are dwarfed by the negative long term consequences (i.e. cash for clunkers, whatever cap and trade garbage comes along, porkulas spending). I think this is typical of academics, policy wonks and think-tankers. They have little practical real work experience in dealing with the consequences of applied policies. I wouldn’t go into business with Romer, Summers or Goolsbee would you?
lol. Y'all know the Obamatons well.
dd20,
I think it's often the case with the federal government that they don't think through the consequences of their actions. In attempting to fix one problem, they create five other problems. Then, of course, they propose more government solutions to fix the five problems government just created, and on and on it goes. And after it all falls apart, the government calls it a failure of the free market.
There must be some Murphy's Law or Peter Principle that covers that.
You guys remind me of when my wife went through menopause. She no longer needed me to argue with her as she would provide both sides of the argument and I got to be a jerk without even having to be present.
Well then rest assured frank, we think you're a jerk even when you don't post.
frank is no jerk. He's one of the most thoughtful, intelligent and articulate commenters on these blogs.
Since you guys argued both sides already, you know, all Dick Cheney pre-emptive-like…..I'll only say that 20 million jobs were created during the 90's when the highest tax bracket was 39.5% Strange how that additional 4 1/2% didn't discourage all those small businesses from, you know, expanding.
The rest of King's post is all supply-side favoritism for the wealthy…..and that theory self-destructed before our very eyes under The Decider.
Before conservatives can regain power…..excepting for violent and thuggish tactics….they must come up with new ideas. The reason? Their old ideas have all proven to be bankrupt. Repent and come towards the light of reality. It does no good to beat dead horses.
Rev, they were website and beany baby distributorships that were the jobs created in the 90's. Remember, Clinton sent all the good manufcaturing jobs outta the country, NAFTA style. Also the growth happened when Clinton lowere the cap gains tax, remember?
frank, I think I am dating your wife's sister.
No Rev, they don't need to do anything to regain power. The dems are doing it for them. If they don't change the Reps will win back congress in 2010 and the presidency in 2012.
Re: Is Obama trying to destroy this country on purpose or is he too stupid to know any better?
No, I think W had the market cornered on that one.
Mr. pdt1420,
Ouch! I think I'll have to go cry in the corner, but one question first, is that the royal "we", a mouse in your pocket, or are you bi-polar?
Mr. averagejoe5,
For godssake, man! If you are dating my sister-in-law, run like hell! Her last husband caught 5 45 caliber slugs to the belly and the police called it self defense when all he was packing was a half finished beer.
Jo-Jo-
That 'beanie baby distributionship' you sneered at is known today as E-bay. Not a bad little company, sold recently for a billion dollars. And I agree w/ you; Clinton screwed up w/ NAFTA, but you gotta agree that Bush was wrong for pushing CAFTA. Who's more foolish? The fool, or the fool that follows? Especially after the damage from NAFTA was so evident.
King, as I started reading your post I was taken in by how much you sounded like the small business people Glenn Beck had on his townhall style program yesterday. One of them runs a large restaurant in NYC and wanted to build another one in another city but the taxes the Dems have stacked on such endeavors in the last 3 years kept him from doing it. He said he would only have been employing 225 people if he could have built the new one.
He had on the proprietors of one of the biggest bowling establishment in a number of cities who also wanted to expand but because of new taxes and rules just can't stand to build new alleys.
These people now are managed by too many academicians and former community organizers who have never run any kind of business, small or large. Their stupidity concerning what they are doing to small business with their hurry to raise the old Bush tax rate proves that they don't understand squat.
Oh no, dd20, I certainly wouldn't go into business with any of the three academicians you named and sure wouldn't with the White House triumverate of Barack, Rahm, and David. You would surely be buried in debt in less than a year and they wouldn't have any idea why. Might I suggest that I wouldn't want to go into business with the socialist, Rev Red, either.
I just hope the small businesses can survive the next 15 months till the Dems can be removed from Congressional control in the House.
Royboy-
You diminish your argument citing beck-a guy who fantasizes about poisoning a congresswomen, who calls the prez a racist, and is employed by a company who accused GE (a rival), of manufacturing componets of IED's. You need to disconnect from faux noise. Half of what they 'report' is lies, and the other half is distorted.
These dems have really screwed up this country. Everything was going so well w/ the repugs in control.
NF I am not talking about ebay. I am talking about Beanie Baby Collectors. The ones that had 8 or 10 shopping channels. And you will never hear me defend Bush on CAFTA.
For some reason, our govt has gutted our country of manufacturing jobs. Why? I have my ideas but you guys on here would think I was crazy so I don't talk about them.
Question Rev, if your logic is high taxes = jobs then why did the Democratic Administration pass the stimulus bill? By your equation, shouldn't we have just jacked up takes to 90% on everyone making $250,000?
AvgJoe you were close to the true mark with your Beanie Babies comment and the 90's being a huge speculative bubble. The Clinton economy consisted of phony dot.com hype. Yes there were winners like eBay (I'd vote for Meg Whitman in a minute) but most everything ended like Worldcom and Enron thanks to a president who couldn't care less about ethics and the SEC.
So what is folks? If the go-go Clinton 90's was a product of high taxes and complete deregulation of the market (duh, hey let's repeal Glass-Steagall, duh) then why is this administration maintaining low taxes (for now, of course I know that'll change) and imposing regulations on the market? And if Econo-god Clinton didn't need no stinking stimulus why is this administration stimulating?
You can't hold Clinton as the hero then not do anything he did. If the left thinks higher taxes are the the answer for everything then repeal JGTRRA and be done with it. In all seriousness, why isn't Congress trying to get the Bush tax cuts repealed? Is it law that they can only expire?
Mr. averagejoe5 and Mr. dd20,
Amen. Our government has totally undermined manufacturing under the "free" trade paradigm. If that weren't bad enough, they repealed the regulations put into effect in response to the last time the economy imploded. As a result, we not only don't make anything, we are losing the skills needed to make anything. At the same time, our government has permitted financial sector of the economy to be dominated by short term bets with no material backing, replacing long term investment in productive capacity. The Reagan tax cuts occuring in conjunction caused asset inflation on Wall Street and along with Reagan's expansion of military expenditures also made money for capital improvements in manufacturing expensive. With the destruction of the manufacturing sector, the bankrupting of government, and the corruption of the financial sector, we are left with an economy whose only basis is speculation. By now, it should be obvious that we've not only lost manufacturing, but all jobs that are not site specific are vulnerable. It should also be obvious that we cannot sustain borrowing money only to send it, and more, overseas. In these areas, at least, both parties agreed, and not surprisingly so. If you want to know how any politician will vote, you'll not find a better correlation than campaign contributions. Just watch as the health care reform loaf gets whittled down to crumbs, a weak outcome that ends up subsidizing the ones already profiting from the status quo. Then follow the money and realize who actually represents whom.
Rev says, "The rest of King's post is all supply-side favoritism for the wealthy…..and that theory self-destructed before our very eyes under The Decider."
As predicted, you brought out your usual liberal firewall arguments. Yes, my whole purpose is to advocate for the rich, even though I have no reason whatsover to do so, and even though a large part of my post was devoted to advocating against the rich and powerful. Too bad you didn't read it.
But if you think taking half the profits (or more) away from the small business job creators in our country is a good idea, and somehow that will lead to job creation rather than job destruction, just keep those blinders on. Blame it all on Bush instead. Whatever. That avoids the tedious effort of having to think about things like economic reality.
High taxes are GOOD !!!! Keep telling yourself that as our country goes down like the setting sun.
Franklin,
It isn't a competiton between Bush and Obama. It's a competition between economic intelligence and economic stupidity. I'd put both Bush and Obama (to date) in the stupid column.
And you should have watched that Glenn Beck program. It wasn't about Beck. It was about a townhall meeting forum of small business people talking about their businesses.
joe says, "For some reason, our govt has gutted our country of manufacturing jobs. Why? I have my ideas but you guys on here would think I was crazy so I don't talk about them."
Got anything to do with the NWO ? If so, I don't think you're crazy.
frank, ahhh the ol' Pluralis Majestatis, haven't thought about that since a history of the middle ages class midterm… beautiful really and, I suppose, appropriate… "God and I" think you're a jerk
King, didn't we have a conversation about handing out atta-boys? mary sneezes at the screen and rev gives her a pat on the back.
C'mon man, I predicted the Rev's response exactly!
Did anyone catch the liberal talk that the failure of healthcare is the monopoly of the insurance industry… an entire diverse industry with numerous companies subjected to government controls that don't allow them to peddle their wares across state lines is now the definition of a monopoly…
how deliciously Orwellian.
The Dems could make it really Orwellian by coming up with some wolf in sheep’s clothing name where the real program is the complete opposite of its name. Like “Fairness Doctrine” or “Employee Free Choice Act”.
"In the last nine months, our federal government has bailed out big business left and right. "
try the last 9 years.
the iraq and afghanistan wars were basically bailouts for texas based corporations.
Delicious or not….the one thing that it is….is mistaken…
"an entire diverse industry with numerous companies subjected to government controls that don't allow them to peddle their wares across state lines is now the definition of a monopoly."
Insurance companies purposely protect their monopolistic base by banning interstate commerce in insurance. It's a very lucrative racket.
So…yeah, blame it on government, just as conservatives blamed the banksters implosion on government control, when in reality unfettered and unregulated greed got the best of 'em….and then we all suffered, like we undoubtedly will with windfall giveaways to a non-competitive and monopolistic health insurance industry.
But hey, reform minded Democrats are socialists.
And you know this how Terje?
"In the last nine months, our federal government has bailed out big business left and right. "try the last 9 years.
the iraq and afghanistan wars were basically bailouts for texas based corporations."
Was it from your conspiracy theory websites?
If only they didn't want to reform us into a communist state. "But hey, reform minded Democrats are socialists."
They've already whored all of our good jobs overseas because it is to expensive to do business here.
pdt,
Yes, you did predict Rev's response exactly (I did say "as predicted" in my last response to Rev. That was my indirect shoutout to you and dd20). Rev even parroted the liberal line you brought up about insurance companies being a monopoly, which is laughable. I wonder if the Rev thinks Medicare is a monopoly, or if single-payer would be a monopoly.
Rev says, "Insurance companies purposely protect their monopolistic base by banning interstate commerce in insurance. It's a very lucrative racket."
What on earth are you talking about now ? Government regulations forbid health insurance companies from competing across state lines. The insurance companies don't ban themselves.
Let me get this straight. Numerous private insurance companies offering a variety of different insurance options are a "monopolistic…racket," but single-payer (an actual monopoly) is the way you want to go with health care insurance. Is that about right ? It's moonbat time at All Da King's Men.
joe says, "They've already whored all of our good jobs overseas because it is to expensive to do business here."
No, no, joe. I just read today that Obama is in favor of offshore drilling in America.
He favors it in SOUTH America, not here, but hey, at least that business will create jobs in our hemisphere.
Obama does favor Latin America, but also Asia, and Muslims(he is Muslim you know), Canadians, the socialist pig! Allah Akhbar! ( I think)
Alrighty then.
Does he favor the United States?
averagejoe5, are you serious? are you that dumb? try going to houston and looking around? there is NO recession in houston! i go there on a regular basis and have family that work for businesses there including haliburton. they did great under bush's wars.
No Terje, are you that brainwashed by your leaders. Many cities aren't suffering from the recession, and many business' aren't effected by the recession it doesn't mean that Bush went to Iraq to save their economy. Come on use your head for more than a place to hang your hat.
terje says, "the iraq and afghanistan wars were basically bailouts for texas based corporations."
Wow. There really are people who believe Bush went to Afghanistan/Iraq so Halliburton could make some money. Here I thought rumors of such people was just an urban legend, like the existence of Bigfoot.
Maybe we should start calling y'all the Halliburtoners, like the Truthers and the Birthers.
Joe,
For terje's sake, I hope that hat is made out of tin foil.
King responds..
"Yes, my whole purpose is to advocate for the rich, even though I have no reason whatsover to do so, and even though a large part of my post was devoted to advocating against the rich and powerful. Too bad you didn't read it."
Why don't you respond to my point? You are advocating for lower taxes, and primarily, lower taxes for the more affluent. You use the justification that lower taxes on affluent corporation and business owners will stimulate growth and create more jobs.
If that's true…then please explain why, during the biggest tax cutting period in American history under Bush, and primarily benefitiing America's richest….we've lost so many millions of jobs? How does your "reasoning" for tax cutting and lower taxes stand up under scrutiny?
I think it doesn't.
And I always read your posts in their entirety.
Rev says, "You are advocating for lower taxes, and primarily, lower taxes for the more affluent. You use the justification that lower taxes on affluent corporation and business owners will stimulate growth and create more jobs"
Yes, I'm advocating for job creation. Why aren't you ?
Rev says, "If that's true…then please explain why, during the biggest tax cutting period in American history under Bush, and primarily benefitiing America's richest….we've lost so many millions of jobs? How does your "reasoning" for tax cutting and lower taxes stand up under scrutiny?"
After the dot-com bust and 9/11 recession, and in spite of Katrina and two wars, there were years of job growth after Bush's tax cuts, until the housing-financial meltdown killed it all. There are other factors in play besides taxes, but raising taxes on small businesses to such levels as 50% or more is a guaranteed job killer. How can you not agree with that ? It's basic math. Economics 101.
And Bush never cut the business tax rates, which are among the highest in the world.
We had growth until the Dems collapsed the economy to gain the presidency. Follow the time from when the Dems won congress. We had at times <5% unemployment under Bush. This is a big set-up and we are the victims.
It figures…..the further we move away from the Bush-Cheney regime, the easier it is to disremember, isn't it?
The economy under Bush imploded. So, obviously, it was the Democrat's fault.
And King…4% of small business will be affected by raising the top income tax rate. Exemptions for small business are included in the health reform proposals. So your complaints aren't even justified.
Still, you find time to excuse the bitter economic failures of Bush-Cheney with Katrina and 9-11, etc. Not credible. Deep and historic tax cutting led directly to the loss of millions of jobs, not the addition of jobs. That's the biggest problem with your advocacy for even lower taxes.
Wealth movement towards the top 1% is all one needs to know about during the last 20 years. That wealth movement did NOT create zillions of new jobs. Yet, you still want to see more of it.
Why are you so against the wealthy Rev? Anyone in America has the potential to become very wealthy. It's all in the mind. Do you think the universe has a limited supply of cash? Do you think with all of the other negative thinkers that if people changed their minds a little bit they could be wealthy? I will tell you one thing, wealthy people give more to charities and causes than poor people. I would rather hang with a person that is proud of their net worth than one that is happy they got a 3% raise.
As far as 911 and Katrina. Those emergencies were so heavily exploited by the media and the web, we did what we could as fast as we could. At Katrina the govr and mayor dropped the ball. The citizens also, why didn't the dumbasses leave? They had a week to head for high ground. If I lived in a place that was built below sea level and knew a level 4 or 5 hurricane was approaching. I would be getting out of dodge instead of staying behind and stealing big screen tvs
And Rev, all business is going to effected by this economy because they are printing money so fast that goods and services and wages can't keep up. Look at oil today. It has gone up almost $6 this week. Why? Value of the buck. Also state and local taxes are going to skyrocket. Because we can't seem to get unemployment under control and they cant keep up with the cash shortages.(yet keep a look out, all govt agencies are still taking their scheduled raises…hhmmmm)
Rev look at the timeline for the implosion of the Bush economy. This isn't the first time it has happened(us being used as sacrificial lambs for their political advancememts and causes), it happened in 2000, 1992 1988 1980 etc etc. This time the govt doesn't have industry to help them rebound. The big talk this morning was GAP Jeans. Sad thing no matter how they try to skew the figures the truth comes out the next month.
I wonder who will be our next Hope and Change president, because this one isn't doing the job, but he is doing well for someone with no experieince. Hoepfully it will be a 3rd party guy.
I'm not against the wealthy. I just don't understand wanting to protect multi millionaires from paying 4% more on taxes. I really don't think it's asking too much.
But I agree with most of the rest of what you wrote.
Rev says, "And King…4% of small business will be affected by raising the top income tax rate."
I thought you said you read my post.
joe,
You can't pin the financial meltdown all on the Dems, but they were the ones who torpedoed reform of Fannie Mae, originated subprime mortgages, pressured the banks into making bad loans, and primarily the ones who made the changes which led to the housing bubble. The GOP is far from guilt free, however. The repeal of Glass-Steagal signed into law by Clinton was legislation originating from GOP'ers in Congress. Allowing commercial banks (aka, Wall Street) into mortgage markets was one of the biggest mistakes. You can trace the housing bubble from 1999 forward directly to that legislation. Greenspan also left interest rates too low for too long in 2005-2007.
Rev says, " Deep and historic tax cutting led directly to the loss of millions of jobs, not the addition of jobs"
Huh ? Would you care to explain how that's even possible ?
Not to mention the fact that jobs were created after the Bush tax cuts.