90% of US Households Face Huge Tax Hike Next Year

reply to post by xuenchen

"Taxes" on profits are eventually part of the operating expenses Yes?

No, taxes can't be included in operating expenses because you only know what your taxes are after you subtract your operating expenses to get your profit.

Taxes aren't costs, they aren't expenses, they don't come into play until after you have already maximized your profits. It doesn't matter if taxes are 1% or 50%, you will maximize your profits by setting your price at the optimal level to match supply and demand.

This is basic economics, the thing the right wing likes to claim they are good at but continually feed people lies that confuses them.

reply to post by HostileApostle


Maybe you can clarify or explain this article from last July .....

Obama plan to lift top tax rates would plague millions of small businesses, study warns

Researchers determined the plan would actually subject 2.1 million business owners to higher rates; specifically, those who pay pass-through taxes, like most partnerships, LLCs and S-Corporations. The result, less capital in the hands of business owners and diminished labor supply, would cost the United States an estimated $200 billion in economic output and 710,000 jobs.

Moreover, business owners and the unemployed won’t be the only ones adversely affected, according to the study, which predicts that employers would also be forced to trim their workers’ wages by 1.8 percent.

reply to post by charles1952


Thanks for the dissection.

Very simple really. Will taxes go up for middle to lower income?
The answer is yes.
Thanks Democrat Party. What a grand way to screw people.

reply to post by xuenchen


My first explanation is that there are millions of idiots in America, and yes, idiots can own businesses.

My second explanation is that the writer of that article doesn't know what the hell they are talking about. Look at any other period of time of higher taxes on the rich, and you will see that it doesn't effect job growth. And if it does, it is in the positive direction.

Look at the years where the rich have been given tax cuts and you will see that jobs suffer.

Trickle down is BS, everyone knows it, the rich know it, the politicians know it, the only idiots that don't know it are the poor middle/lower income fools that the Republicans have tricked into voting for tax breaks for the rich.



It's very plain and simple. Taxes are not costs.

reply to post by HostileApostle


Your views on taxes relative to profits and operating expenses is very mega-corporation centric and seems to indicate a lack of understanding of the metrics which small businesses operate under. A higher tax rate for businesses will absolutely have a greater adverse impact on small businesses and their bottom line than it has over companies such as Walmart. In many regards, Obama's efforts to increase taxes on small business owners (hint: that's the majority of the "over $250k" crowd and the majority of the beneficiaries of the tax breaks Obama has sought to eliminate) is simply another action in a long line of pandering to mega corporations and big business at the expense of those unable to donate millions of dollars to his chosen PACs.

I'd also argue that you are extremely short sighted here. Yes, in the short term these tax increases on businesses may fall under the supply and demand umbrella and consumers will still be able to purchase goods at the same general price which they were able to purchase under last year. To maintain that expenditure level, however, they will be forced to shop at places other than Pop's Corner Grocery Store, because Pop will either be forced to take a major cut in his income (which most small businesses CANNOT afford as they generally reinvest every cent possible back into their business), fire half his employees, or raise his prices. This will push more and more customers to shop at national chain stores. Either through loss of profits, errosion of community support thanks to lay offs, or lack of customers able to afford the higher prices, Pop's Corner Grocery Store will be put out of business. Once each community is devoid of small, locally owned establishments, the chains suddenly have a monopoly and can raise prices however they see fit. This is the failure of the supply and demand theory in regards to modern business. Decades ago, conglomerates realized that by eliminating competition through undercutting prices today, they can reap significantly larger future profits. Political decisions like bailouts, free trade, and elimination of tax loopholes which benefit smaller businesses while leaving the loopholes benefitting huge businesses have all helped these conglomerates immensely. Essentially, if your business has a single owner and lacks a board of directors, you're hosed under this Administration's tax visions.

reply to post by HostileApostle

Dear HostileApostle,

I think you have a point you're trying to make, and I'm just missing it. May I ask a question?

It's very plain and simple. Taxes are not costs.

Do taxes have any impact on business decisions? If so, what do you think they are? Do you think increasing business taxes help a business?

I don't think you believe that taxes have no effect on business decisions. if so, please consider the businesses that are leaving the high tax state of California, and moving to Texas or other relatively low tax, low regulation states.

With respect,
Charles1952

Originally posted by HostileApostle
reply to post by xuenchen

 

Look at any other period of time of higher taxes on the rich, and you will see that it doesn't effect job growth. And if it does, it is in the positive direction.

This ceased to be realistic when Clinton signed NAFTA. Globalization, particularly in regards to manufacturing and importing of labor, along with the rise of ownership boards rather than individual ownership of businesses, has destroyed the 1950s model of prosperity. In fact, the corporatization and formation of executive boards of directors with owners being merely high level investors coupled with differing taxation views on investing income versus earned income was very much in response to the insane tax of the rich during the years following World War 2. Those taxes were enacted to bring down the steel barons, railroad barons, and entreprenuers of the era, instead they simply moved these people from directly recieving profits from their endeavors and being directly taxed on those profits to recieving dividends and shares as investment wealth and not being taxed at nearly the same rate. These executives pattern their investment formats after the same type of system Congressional members use, thus ensuring that Congress would be forced to cut off their own noses if they ever chose to increase taxes on those assets.

reply to post by Hefficide


1. The Mayflower Compact was an interesting choice of quote by you. Seeing as how you're attempting to glean a single "still relevant" notion from a quote which contains two other notions many would say were no longer remotely applicable to the USA.
a. Stated "official" belief in a Christian God/Church of England.
b. Stated "official" allegiance to the Crown.

Now if the two issues above are openly thrown out the window by today's leaders and much of our citizenry, what's so special about implied community responsibility that it should persevere over these other two blatent statements?

2. I'm not sure what you're getting at with your quote from the Declaration of Independence and the definition of Democracy. It would seem to be counter productive to your points, in fact.
This:

Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security

seems to be pretty much in line with what the thread OP is all about. Listen closely and you will hear more people than ever before talking about how our debt, coming tax increases, and eroding way of life are becoming unsufferable. The government is becoming more abusive. The demands on the middle class, the lifeblood of America, are destroying our security. By God, it looks like it is time to start being prudent and start throwing off some Government.

The definition of democracy has no place here. America is not a democracy and, if anything, has drifted further away from being one.

3. I am angry and I am frightened. I am angry at a government which has screwed me and I am frightened for what this bastardization of America will look like when my kids are my age and start trying to build a life for themselves. We stand today as the first generation of Americans whose offspring will likely be less well off than we have been. LESS WELL OFF! I've got a college degree and a career which, 30 years ago, would have placed me solidly upper middle class. Guess what? Today the only clear benefit of my career path is that I make just enough money to allow my family to survive as a single income earner home and my wife can care for our children during the day herself. Don't get me wrong, I'm thankfull to be well off compared to most, but by no means am I about to kiss any political ass in gratitude of being lucky enough to be "getting by". Furthermore, I am damned angry at the idea that, if things keep going the way they are going, my wife will eventually have to seek a job not so we can pay for ourselves, but to compensate for the amount of money the G.D. government steals from us in taxes. I cannot put into words on ATS what I think of America's "leaders", Heff. I'm a verbose dude with a decent vocabulary, but "proper" words don't get the job done here. The air needs to be blistered and the Queen's English needs to be scorched by every American who is done playing DC's little games. I am also scared because we're close to a majority of the nation which is on some form of federal aid and which takes more than they put in. Hell, maybe someday I'll just give up and go on the dole myself... seems to be a lot less stressfull and a lot less of a screw job from that end.

reply to post by HostileApostle


Perhaps you could explain why a bottle of beer costs $2.50 at the bar down the street here in Wisconsin, but if I drive into Chicago, that same bottle of beer costs $7.50.

reply to post by HostileApostle

No, taxes can't be included in operating expenses because you only know what your taxes are after you subtract your operating expenses to get your profit.

Taxes aren't costs, they aren't expenses, they don't come into play until after you have already maximized your profits.

And you don't believe that a company would have the foresight to estimate these "non-costs", and build them into the price of their goods?

Have you ever done a Profit and Losses forecast?
Taxes are built right into a P&L spreadsheet, as they are a cost that will eventually need to be paid (a loss).

If you are speaking specifically of income taxes, then you are correct, as income taxes are paid by the individual making the income.

reply to post by burdman30ott6


We are not talking about business or corporate taxes, we are talking about individual income taxes.

I don't understand you going off on a tangent about large corporations pushing out mom and pop stores when talking about individual tax rates.

Also, if you claim these small businesses put all their profit back into their company then they don't have to worry about these taxes because they never pass through as income.

I'm sorry, but I don't follow your argument.

reply to post by charles1952

Do taxes have any impact on business decisions? If so, what do you think they are? Do you think increasing business taxes help a business?

Do individual income tax rates impact business decisions? No, the should not.

Do some taxes impact business decisions? Yes, corporate taxes, payroll taxes, sales tax, these can all impact business decisions.

But individual income tax, no, it should not impact any business decisions you make. And individual income tax rates is what this thread is about.

Originally posted by Oaktree
reply to post by HostileApostle

 

Perhaps you could explain why a bottle of beer costs $2.50 at the bar down the street here in Wisconsin, but if I drive into Chicago, that same bottle of beer costs $7.50.

There are many factors, individual income tax rates aren't one of them.

reply to post by Oaktree

If you are speaking specifically of income taxes, then you are correct, as income taxes are paid by the individual making the income.

That is what this entire thread is about, so that is exactly what I'm talking about.

Originally posted by HostileApostle
reply to post by burdman30ott6

 

We are not talking about business or corporate taxes, we are talking about individual income taxes.

I don't understand you going off on a tangent about large corporations pushing out mom and pop stores when talking about individual tax rates.

What? Reality would disagree with you here.
Source

In 2010 and 2011, businesses were allowed to expense as much as $500,000 in equipment and property on one year’s tax return, rather than the standard practice of depreciating such assets over time. The maximum Section 179 (named after the IRS tax code’s corresponding section number) expense that can be claimed in 2012 is $139,000, a number that will drop to $25,000 in 2013 if no changes are made.

The tax compromise of 2010 allowed business owners to take 100 percent bonus depreciation, instead of standard depreciation, for purchases of tangible assets (such as furniture, vehicles, and equipment) made in 2011. That meant the entire cost of a particular asset could be written off with no limit on its cost. In 2012, as it stands now, bonus depreciation is reduced to 50 percent; it disappears entirely in 2013

Self-employed people, including sole proprietors, partnerships, and limited liability companies, paid self-employment tax on earned income at a rate of 13.3 percent in 2011 and 2012 under tax compromise legislation passed in 2010. As of January 2013, barring any congressional intervention, that figure goes back up to 15.3 percent.

That is just a small sample of how misinformed on income taxation and how it negatively affects small businesses you are. Not only is there much less of a tax advantage to re-investing into your own business, but small business owners will be slapped with either an elevated business tax or a 2% greater rate should they actually pay themselves.

As to how this benefits large corporations at the pain and suffering of mom & pop stores, let's use our brains here. Do you think adding tax liability to $361,000 worth of re-investment money (which is taxed at about 20% = $72,000) hurts the family owned businesses more or the huge big box stores who "donate" a hundred times that amount to their pocketed politicians every election cycle more?

reply to post by xuenchen


No 90% of US Households will not face a tax hike. The Bush era temporary tax cuts will expire, they are going to be allowed to expire because the Republican Party wishes to extend them to the top tier tax brackets and will not compromise on the issue at all. At the end of the year they will expire breaking the Norquist no tax pledge, and be replaced with legislation for cuts targeted at the 250k and below tax brackets with a retroactive effective date to cover the lapse.

Originally posted by HostileApostle
reply to post by charles1952

 

But individual income tax, no, it should not impact any business decisions you make. And individual income tax rates is what this thread is about.

reply to post by burdman30ott6

Originally posted by burdman30ott6
1. The Mayflower Compact was an interesting choice of quote by you. Seeing as how you're attempting to glean a single "still relevant" notion from a quote which contains two other notions many would say were no longer remotely applicable to the USA.
a. Stated "official" belief in a Christian God/Church of England.
b. Stated "official" allegiance to the Crown.

Now if the two issues above are openly thrown out the window by today's leaders and much of our citizenry, what's so special about implied community responsibility that it should persevere over these other two blatent statements?

Semantics. Computers connect to the Internet. Mine is black. Mine is a Dell.

Does the fact that two aspects of this statement happen to be case specific invalidate the third aspect? Of course not. Computers do, in fact, connect to the Internet.

Quoting the Mayflower Compact is valid in a discussion of this nation and of the framers as they were informed by it as well. Oh, as they were also influenced by John Locke, though conservatives, these days, don't like to own up to that fact. Imagine that, Thomas Jefferson ( and the other framers) influenced by the man popularly referred to as the "father of classical liberalism"?

Originally posted by burdman30ott6

2. I'm not sure what you're getting at with your quote from the Declaration of Independence and the definition of Democracy. It would seem to be counter productive to your points, in fact.
This:

Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security

seems to be pretty much in line with what the thread OP is all about. Listen closely and you will hear more people than ever before talking about how our debt, coming tax increases, and eroding way of life are becoming unsufferable. The government is becoming more abusive. The demands on the middle class, the lifeblood of America, are destroying our security. By God, it looks like it is time to start being prudent and start throwing off some Government.
The definition of democracy has no place here. America is not a democracy and, if anything, has drifted further away from being one.

My citing of that particular passage of the Declaration directly addresses the point you say it doesn't. In fact it addresses your rebuttal to it as well. The very reason we are a Republic and not a true Democracy is that the Framers were wise enough to realize that the many would not care about the few. So, in defense of the few, they followed the Athenian or Roman model - a Republic. The quoted "... that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed." demonstrates this intention and cause.

Originally posted by burdman30ott6

The definition of democracy has no place here. America is not a democracy and, if anything, has drifted further away from being one.

Explained above.

Regarding the rest of your post. I am angry too. And at the same things. We just have different reactions to that anger. Your seems egocentric to me. My approach is to protect everyone from the government. Your approach seems to be to protect yourself from the government and from everyone else too. I don't have a college degree - so imagine how this recession has been for me, and those like me. You've got a leg up and you're hurting. Imagine those without that leg ( and before it's tabled - my heart condition precluded me from higher education. I was not cured until I was 28 and, by then, was already supporting a family. ).

Where we stop being in agreement, I think, is where we each assign "blame" I put it at the feet of corrupt politicians - you seem to add in the disadvantaged to that group. I think if we had an honest Washington, not only would our personal struggles end - but there'd be plenty left to care for the disadvantaged too.

~Heff

Originally posted by newcovenant
reply to post by Xtrozero

 

Please stop with the far left talking points and actually type something from your own head for once.

Are you people not happy unless you are telling someone else what to do and how to think?
Why don't I do what I want and you do the same for a change? I am not asking you to agree with me. I don't give a crap what you do. You want to sell your snake oil to stupid people you can continue. I will not tell you how to think or what to do and appreciate the same respect. This isn't a right wing-Nazi Country yet though I see you are working on it.

Well I don't usally say stuff like that, but damn if your words are not word for word.....

BTW care to debate any other part of my post, other than just the one line. You said your info was correct and I demonstrated that just a slight change in how you look at it all paints a totally different picture...

BTW what is far right got to do with just wanting a smaller government that gives me the opportunity to succeed on my own without some massive tax bill to support 1/2 the country?

Is that a far right Nazi agenda to you?

Originally posted by macman
Thanks for the dissection.

Very simple really. Will taxes go up for middle to lower income?
The answer is yes.
Thanks Democrat Party. What a grand way to screw people.

Actually taxes will go up on everyone... its all about spending more and not reducing cost.

Lower middle class and the poor will get hit the worst, and I'm sure Obama right now is not saying that.

It's called sin tax...All that bad cheap food they buy will be taxed heavily because it is "bad" for you, but they can't afford the good stuff. Cigs and liquor....lol they better start weaning off that crap now... These people are voting Obama and don't even know he has already screwed them over...I guess they deserve what they get though...