Small Biz Sector Facing Tax Rate Hike: Majority of Profits, Majority of Workers

ATR ^ | 8/13/10 | Ryan Ellis

[Andrea19]

• The Obama Administration and Congressional Democrats have said that they want to raise taxes in the top two income tax rates in January 2011. Under their plan, the 33 percent rate will rise to 36 percent, and the 35 percent rate will rise to 39.6 percent automatically in January. These rates affect families and small business owners earning at least $200,000 per year

• Unlike corporations, small businesses usually don’t pay their own taxes. Rather, business profits flow through to the business owner. The business owner pays taxes on her small business by adding the profits to her income tax form. Therefore, personal income taxes are the same thing as small business taxes.

• According to the IRS, most small business profits pay taxes in households making more than $200,000 per year. The IRS keeps track of two types of small business income: sole proprietors, and “pass-through” entities like partnerships and S-corporations...

Read more: http://www.atr.org/small-biz-sector-facing-tax-rate-a5310#ixzz0wW0MK6Jp

[Andrea19]

The Obama Tax Hike, engineered by Nancy Pelosi and Harry Reid, was always going to be a disaster.

Help promote Conservative activism here & here & here & here

[Huskrrrr]

Well as long as only the rich are affected. /S

[colorado tanker]

This is a big reason why businesses are conserving cash (if they have it) and are not hiring. The Obamaistas are getting ready to smack the economy with big tax increases next year - not just rate increases but the Obamacare taxes too. There is too much uncertainty and even downright fear in the business climate.

[RWGinger]

Everytime it is pointed out to a Dem that raising taxes on the over 250k bracket wil hurt small business they say that less than 2@ of small biz falls into that category
BUT they never back it up with provable stats

I’d like to know the facts and I’d like to call them the LIARS that they are

[updatedscreenname]

Section 179 deductions also expire on 12/31/2010. The maximum annual deduction of $250,000 was extended into the 2010 tax year by the Hiring Incentives to Restore Employment (HIRE) Act of 2010. The maximum annual deduction will return to $25,000 for 2011.

The main reason that small business isn’t hiring is that business is down! Actually many have more employees than they
currently need.

[colorado tanker]

Can you believe that on top of all this crap the Dims want to smack the economy with cap and tax? And they wonder why consumer confidence and the business climate are down.

[griswold3]

Yes, and even when the tax increase on the ‘rich’ goes through, they’ll soon realize that it’s not enough. It’s never enough. More wants more.
We’re in for at least a 5 year downturn. The small businesses/aware wage earners are simply becoming today’s ‘ants’ to the ‘progressive grasshoppers’. Long winter ahead.

[LambSlave]

What should be obvious to any semi-rational person, that the business owner will maintain his current salary and reduce the benefits of his employees or raise his prices, is totally lost on the Libs... This will have near-zero impact on the business owner, just his customers & employees.

[Leftism is Mentally Deranged]

This corrupt administration is working day and night to change the entire structure of the economy from one that barely worked to one that will collapse.

Upon collapse, they will do to the country what they did to GM.

Then their dream of a communist USA will be realized.

[WallStreetCapitalist]

>>> This is a big reason why businesses are conserving cash (if they have it) and are not hiring. The Obamaistas are getting ready to smack the economy with big tax increases next year - not just rate increases but the Obamacare taxes too. There is too much uncertainty and even downright fear in the business climate. <<<

You hit that on the head. In my social circle alone, virtually every business owner says things are much better than last year, sales are going up and their balance sheets are stronger, but they are holding onto every penny that comes through the door in total fear of a double dip recession, increased taxes, or more government monkey wrenches thrown into the mix.

A friend of mine owns a manufacturing company and wanted to hire more people because his sales are up double digits but he is pushing everyone as hard as he can; he is too scared to add fixed expenses that are hard to undo just in case things go south again.

(I suppose this should be an improvement from last year ... this same friend, during the height of the recession, was taking his profits each month and buying gold bullion so he now has almost as much in gold reserves as in working capital!)

[colorado tanker]

Thanks for that insight.