GOPers, Connect the dots for me

[Texsox]

I was listening to a three hour GOP campaign speech disguised as a talk show. The Democratic major of Youngstown was speaking out how Kerry's Tax plan would destroy their local economy. I am trying to connect the dots here.

 

What he outlined was Youngstown was in dire times and these brave business startups arrived in part to aggressive tax plans that Youngstown was offering. These zones, dubbed brownfields, offered tax breaks and other incentives for business to move to.

 

Fast forward a number of years and he claims to know all of these owners, and they all are earning over $200,000 in personal income. He claims if their personal federal income tax increased, it would destroy all those jobs and future growth. We've heard this before. Tax the business owner and you lose jobs.

 

Here's what I don't understand. If one of those owners was paying $60,000 in annual taxes and now he is going to pay $70,000 in personal taxes, exactly what does he do that eliminates jobs?

 

Does he close down his company?

Does he fire 15 workers?

Does he stop the $2,000,000 expansion?

 

Connect the dots, what does the business owner whose take home income drops from $140,000 annual to $130,000 do to cripple the economy?

[Chisoxfn]

He hires a couple less employees. For example in California a lot of companies that would hire more then 15 employees don't because then they have to pay more in a lot of employer taxes and those taxes are so expensive that it makes no sense to do so.

 

The other thing it will do is prevent the employer from adding more employees.

[sox4lifeinPA]

10k less a year means one of his 4 children doesn't go to college, can't get federal aid for college because apparently 140k a year is a lot of money to the government, and subsequently everyone suffers due to Kerry's "better plan to do things better"

[jackie hayes]

Okay, I'm not GOP, but I do understand the logic. Basically, the argument is that taxes destroy the incentive to work. So consider the $2 mil expansion -- he might say, well, my personal gross profits from undertaking this will be $200,000 per year. Right now, I'll take home $130,000 extra per year. But after the tax increase, I'll only take home $120,000 extra per year.

 

So the business owner might say, screw it, it was barely worth the extra effort when I got $130,000, let's just scrap the thing. Or he might say, it's not worth the effort of doing the full expansion, I'll just concentrate on the closest towns, a $1 mil expansion. I'll get less extra income, but I won't be away from my family as much. Obviously, that means fewer jobs.

 

The key thing is that the success of the business has to depend very closely on the amount of time put forth by the business owner, personally, and that time must be valuable to him. I'm sceptical; there will certainly be an effect, but I think the GOP exagerates its size. The more direct effect on jobs is due to the reduced spending power of consumers. But I don't think even those negative effects will outweigh the benefits of rescinding the tax hike.

[bmags]

I've heard this so many times...and it hasn't happened in each consideration...they either raise their prices by .20 cents...(ooh) or don't hire one extra employee at 5.25 an hour-to-whatever an hour...and that changes america.

 

And personally i could care less if one assf*** town has a business close when there are hundreds of towns that need the social programs and tax relief that kerry is offering to get their middle and lower class workers out of the funk they are in.

[EvilMonkey]

And personally i could care less if one assf*** town has a business close when there are hundreds of towns that need the social programs and tax relief that kerry is offering to get their middle and lower class workers out of the funk they are in.

bmags, how are they going to pay for those social programs when the businesses in those assf*** towns close, resulting in a loss of TAX REVENUE to PAY for the social programs? Who do you think PAYS the taxes? The small business owner. I pay a HUGE amount of money in taxes as a small business owner. The unemployment people get? I PAY FOR IT. Not the state, they take money from ME, even though I haven't laid anyone off in over 12 years. You think your taxes on your home phone are bad, look at the taxes on a business phone. Almost doubles your bill. Every government body imaginable dips their greedy hands in there. Social security? Sure, some comes from your check, but the same amount is also paid by your employer. Oh, and raising my prices isn't an option, at least not if I want to stay in business. And for most of the jobs I need, I couldn't get someone for $5.25 per hour, more like $15.25 per hour.

 

Tex: To answer your question on a personal level,if my taxes went up $10k per year, my designer would be let go. I keep toying with the idea of hiring another person on part time, but that would just be a dream if taxes on me go up.

[mreye]

Let us not forget that Kerry wants to raise the minimum wage. That also would take it's toll on a lot of small business owners.

[Texsox]

So if a business owners personal tax bite is going to increase by $10,000 per year, instead of increasing sales, the let someone go. They tell one of their kids they can't go to college. Interesting, so if $10,000 per kid stops parents from sending their kids to college then someone who makes $90,000 cannot afford to send any of their kids to school.

 

$130,000 4 kids go

$120,000 3 kids go

$110,000 2 kids go

$100,000 1 kid goes

$90,000 sorry kids, here's a job in the coal mine

 

If that designer isn't going to increase your business and make you a profit, hiring him is just a charity effort on your part. So charitible gifts go down.

 

Any thought on that guy taking advantage of the tax breaks to locate there?

 

In order to give himself a raise to cover his projected loss in take home pay of $10,000, he will have to fire workers. How many companies have "extra" employees around?

 

With all the hurdles to starting a business, I find it interesting that the guy is going to cave in because his personal taxes go up.

[southsider2k5]

Let us not forget that Kerry wants to raise the minimum wage. That also would take it's toll on a lot of small business owners.

Speaking of minimum wage. I wish they would just go ahead and index it to inflation, the same way they have SSI. The problem is nothing gets done about it for years, then when they do, it is way above inflationary levels in order to catch up, and it takes years for shock to wear off and hiring to recover.

 

To me there is no reason they can't index it.

[mreye]

Speaking of minimum wage.  I wish they would just go ahead and index it to inflation, the same way they have SSI.  The problem is nothing gets done about it for years, then when they do, it is way above inflationary levels in order to catch up, and it takes years for shock to wear off and hiring to recover.

 

To me there is no reason they can't index it.

Never thought of that. Good point.

[Texsox]

Speaking of minimum wage.  I wish they would just go ahead and index it to inflation, the same way they have SSI.  The problem is nothing gets done about it for years, then when they do, it is way above inflationary levels in order to catch up, and it takes years for shock to wear off and hiring to recover.

 

To me there is no reason they can't index it.

Then it takes away voting for it. The Dems like to use it as a campaign issue (Look what we are doing for the poor !) and the GOP already thinks it is too high. So both parties would like some control over it.

[southsider2k5]

Then it takes away voting for it. The Dems like to use it as a campaign issue (Look what we are doing for the poor !) and the GOP already thinks it is too high. So both parties would like some control over it.

Yeah, I know... once again my thinking is way to rational for practical governmental application

[sox4lifeinPA]

So if a business owners personal tax bite is going to increase by $10,000 per year, instead of increasing sales, the let someone go. They tell one of their kids they can't go to college. Interesting, so if $10,000 per kid stops parents from sending their kids to college then someone who makes $90,000 cannot afford to send any of their kids to school.

 

$130,000 4 kids go

$120,000 3 kids go

$110,000 2 kids go

$100,000 1 kid goes

$90,000 sorry kids, here's a job in the coal mine 

 

If that designer isn't going to increase your business and make you a profit, hiring him is just a charity effort on your part. So charitible gifts go down.

 

Any thought on that guy taking advantage of the tax breaks to locate there?

 

In order to give himself a raise to cover his projected loss in take home pay of $10,000, he will have to fire workers. How many companies have "extra" employees around?

 

With all the hurdles to starting a business, I find it interesting that the guy is going to cave in because his personal taxes go up.

how many kids do you have tex?

[Texsox]

Yeah, I know... once again my thinking is way to rational for practical governmental application

Exactly. The push down here among the churces is the so called "Liveable Wage". They are lobbying large employers to set a minimum wage at the poverty level which is a couple dollars above minimum wage.

 

Which is an interesting comment on the minimum wage. Should it be almost 25% below the poverty level?

[southsider2k5]

Exactly. The push down here among the churces is the so called "Liveable Wage". They are lobbying large employers to set a minimum wage at the poverty level which is a couple dollars above minimum wage.

 

Which is an interesting comment on the minimum wage. Should it be almost 25% below the poverty level?

It shouldn't be. The problem is if you increase minimum wages 25% tommorrow, you can bet that 1/4 of that workforce will lose their jobs. Is it worth having 3/4's of those people at poverty level, while expelling the rest of them into unemployment? There would also be inflationary considerations, but I would have to figure out how many people would be affected before I could guess as to how big it would be.

[Texsox]

It shouldn't be.  The problem is if you increase minimum wages 25% tommorrow, you can bet that 1/4 of that workforce will lose their jobs.  Is it worth having 3/4's of those people at poverty level, while expelling the rest of them into unemployment? There would also be inflationary considerations, but I would have to figure out how many people would be affected before I could guess as to how big it would be.

I don't think business are that fat to be able to cut 25% of their workforce. If they have that many unskilled workers extra, then they are running a charity, not a money making business. Down here letting go that many would cause the call centers have to close, the fast food places would close, the convienent stores, etc. I would see more outsourcing. The extra janitor gets let go. An extra QC operator. Companies get tighter on who they hire. They may not be able to lay off 15% of the minimum, but they may lay off a manager. The middle management gets squeezed.

 

Everytime discussion in minimum wage comes up, there are all these dire predictions on one side and all the rosey predections on the other.

 

Imagine if all those minimum wage people now had an extra $500 annually to spend. Wouldn't that grow the economy? The very companies that are employing minimum wage people would see a big increase in business with all this extra business.

 

Both sides are overselling their hands.

 

I believe there are some jobs that are not meant to support a family. They are excellent starting out, extra income, types of positions. I feel bad for the so called working poor who are working 3 of these jobs to support their family. I know of a couple where both parents work full time and the father works an extra job.

[EvilMonkey]

So if a business owners personal tax bite is going to increase by $10,000 per year, instead of increasing sales, the let someone go. They tell one of their kids they can't go to college. Interesting, so if $10,000 per kid stops parents from sending their kids to college then someone who makes $90,000 cannot afford to send any of their kids to school.

 

$130,000 4 kids go

$120,000 3 kids go

$110,000 2 kids go

$100,000 1 kid goes

$90,000 sorry kids, here's a job in the coal mine 

 

If that designer isn't going to increase your business and make you a profit, hiring him is just a charity effort on your part. So charitible gifts go down.

 

Any thought on that guy taking advantage of the tax breaks to locate there?

 

In order to give himself a raise to cover his projected loss in take home pay of $10,000, he will have to fire workers. How many companies have "extra" employees around?

 

With all the hurdles to starting a business, I find it interesting that the guy is going to cave in because his personal taxes go up.

Most business are ALWAYS trying to increase their sales. My designer is simply the one person who's job I can do if I have to. She is not a luxury. If I were to let her go, it would mean extra hours every day for me, since I still would have to do sales, and all the usual admin stuff.

 

As for the college thing, those numbers may be right! I don't know what various colleges cost these days, but the one I went to now costs $25,000 per year. I think a $10,000 hit in income would seriuosly effect anyone's ability to fund a college education.

[sox4lifeinPA]

Most business are ALWAYS trying to increase their sales.  My designer is simply the one person who's job I can do if I have to.  She is not a luxury.  If I were to let her go, it would mean extra hours every day for me, since I still would have to do sales, and all the usual admin stuff. 

 

As for the college thing, those numbers may be right!  I don't know what various colleges cost these days, but the one I went to now costs $25,000 per year.  I think a $10,000 hit in income would seriuosly effect anyone's ability to fund a college education.

those numbers are similar to my upbringing and I know that any fluxuation in income had a tremendous effect on everything. There were 3 of us in college at the same time. With zero government help, how are the middle class of america expected to thrive? The answer obviously wasn't government assistance.

[Texsox]

Most business are ALWAYS trying to increase their sales.  My designer is simply the one person who's job I can do if I have to.  She is not a luxury.  If I were to let her go, it would mean extra hours every day for me, since I still would have to do sales, and all the usual admin stuff. 

 

As for the college thing, those numbers may be right!  I don't know what various colleges cost these days, but the one I went to now costs $25,000 per year.  I think a $10,000 hit in income would seriuosly effect anyone's ability to fund a college education.

So if your take home went from $140,000 to $130,000 you would start working both jobs?! In effect you would do all that additional work for an 8% pay raise and give up on hiring a part timer.

 

Then I assume out of that $140,000 you would be spending almost all of that for living expenses. I know the cost of living is expensive up north, but I have a hard time understanding that a drop from $140,000 to $130,000 in take home, causes you to work a second job and give up on your dream to expand with a part time employee.

[Steff]

So if your take home went from $140,000 to $130,000 you would start working both jobs?! In effect you would do all that additional work for an 8% pay raise and give up on hiring a part timer.

 

Then I assume out of that $140,000 you would be spending almost all of that for living expenses. I know the cost of living is expensive up north, but I have a hard time understanding that a drop from $140,000 to $130,000 in take home, causes you to work a second job and give up on your dream to expand with a part time employee.

It doesn't for most.

[EvilMonkey]

So if your take home went from $140,000 to $130,000 you would start working both jobs?! In effect you would do all that additional work for an 8% pay raise and give up on hiring a part timer.

 

Then I assume out of that $140,000 you would be spending almost all of that for living expenses. I know the cost of living is expensive up north, but I have a hard time understanding that a drop from $140,000 to $130,000 in take home, causes you to work a second job and give up on your dream to expand with a part time employee.

I can't hire a computer designer part time for $5.25 per hour. As I mentioned earlier, it would take something like $15 per hour to get anyone that knew what they were doing. I could take a chance and hire someone out of school, or with no experience, but then I would be spending just as much time training them and checking thier work. As for doing the work, i will do whatever it takes to keep the bills paid, the lights on and food on my plate. I have done it while 'in-between' designers (one got an offer at a downtown advertising agency), and I will do it again if I have to. I just don't want to have-to.

[Texsox]

I can't hire a computer designer part time for $5.25 per hour.  As I mentioned earlier, it would take something like $15 per hour to get anyone that knew what they were doing.  I could take a chance and hire someone out of school, or with no experience, but then I would be spending just as much time training them and checking thier work.  As for doing the work, i will do whatever it takes to keep the bills paid, the lights on and food on my plate.  I have done it while 'in-between' designers (one got an offer at a downtown advertising agency), and I will do it again if I have to.  I just don't want to have-to.

What I am having trouble with is the Mayor's comments that repealing the Bush tax break would destroy those businesses. I believe he is overplaying that portion of the debate. There are far better arguments against our graduated tax rates and the burden that higher income individuals are paying then destroying business.

 

I wonder how many business owners hired someone with their personal Bush tax break? Is the reverse true? How many full-time people would someone hire if they received a $10,000 tax break?

[Chisoxfn]

I've heard this so many times...and it hasn't happened in each consideration...they either raise their prices by .20 cents...(ooh) or don't hire one extra employee at 5.25 an hour-to-whatever an hour...and that changes america.

 

And personally i could care less if one assf*** town has a business close when there are hundreds of towns that need the social programs and tax relief that kerry is offering to get their middle and lower class workers out of the funk they are in.

Bmags, I can't talk about your state specifically but I can tell you that businesses are freaking getting up and leaving California in droves because of the absolute ridiculous taxes and social programs in regards to unemployment, etc.

 

When all these companies are running out and your creating incentives for them not to hire, then all of a sudden the gov is gonna be receiving less and less in taxes and money.

 

I'm a big believer in free markets and that the government really had to do very little to keep things involved. Every one in a while they have to step in, but in general people will manage themselves wiseley. It failed a long time ago and certain programs were needed, but with news coverage teh way it is now (pretty much accessable to everyone), people and businesses aren't going to get away with absolutely screwing their employees, etc.

 

Of course their are some gov programs that are needed, but why would I'd rather have someone in charge of everything thats in it for profit and minimizing costs then I would for a government which is just their to do it and quite frankly does it at a ridiculously more innefficient rate then the private sector.

 

Consumers and Suppliers both create the demand and supply needs and in a sense both have a control of the market. Their are some industries where that doesn't happen right now, for example pharmaceutcals and I think some things need to be done to fix it.

 

I think in due time we'll see the US enter agreements with certain other countries pharmaceutical producers to open up a bigger supply and other options for US customers which will lead to lower prices. THe key is to make sure the products coming in our safe and the FDA has always been insanely conservative when it comes to new mediciation and approving medication. Well at least compared to France and other governments who are a little more leniant and don't have quite the acceptance laws (Not saying France's medication sucks, far from it, I'm just saying prior to getting approval, the US medicines have to go through a much more strict and long term test).

[EvilMonkey]

ving trouble with is the Mayor's comments that repealing the Bush tax break would destroy those businesses. I believe he is overplaying that portion of the debate. There are far better arguments against our graduated tax rates and the burden that higher income individuals are paying then destroying business.

 

I wonder how many business owners hired someone with their personal Bush tax break? Is the reverse true? How many full-time people would someone hire if they received a $10,000 tax break?

If some of those businesses are running on a tighter budget, that $10,000 could be the difference between being open and being closed. Maybe these owners lifestyles have grown to match their income levl. That happens for MOST people, whether they realize it or not. After I bought my business, my income dropped by about 30%, since I had to take out a HUGE loan to do so. I have adjusted, but get pissed at myself when i realize all the money I could have been saving. Maybe some of these business owners need to adjust their personal lives in order to stay open. but then again, they may decide it is not worth it, and close. You did say ONE thing I agree with earlier, both sides are overplayign their hands. This IS a problem, but probably not as big as some make it out to be.

[Texsox]

If some of those businesses are running on a tighter budget, that $10,000 could be the difference between being open and being closed.  Maybe these owners lifestyles have grown to match their income levl.  That happens for MOST people, whether they realize it or not.  After I bought my business, my income dropped by about 30%, since I had to take out a HUGE loan to do so.  I have adjusted, but get pissed at myself when i realize all the money I could have been saving.  Maybe some of these business owners need to adjust their personal lives in order to stay open.  but then again, they may decide it is not worth it, and close.  You did say ONE thing I agree with earlier, both sides are overplayign their hands.  This IS a problem, but probably not as big as some make it out to be.

He specifically stated he knew them all, and they were all earning over $200,000. And if the Bush tax cuts were not made permanent, unemployment would increase and cripple his city.