Posted on 10/16/2008 1:12:48 PM PDT by paterfamilias
In all of this talk about Obama's plan to raise the tax rate on those making more than $250,000 per year, I have a very simple, and perhaps naive, question. Is he talking about gross or net income?
If he is talking about gross income, I can see that this would be a major hit for small businesses, especially those that use independent contractors, and also for professionals.
For example, doctors usually run about 50% overhead. So, for a doctor to pay himself a salary of $150,000 he would have to gross $300,000.
Can somebody help me out on this?
GROSS
Barack is so eloquent, how is it you have any questions? /s
I don’t think Obama knows the difference between Gross, Net, Subchapter S corps, Subchatper C corps, or a McDonald’s Fillet O’ Fish.
I was afraid of that.
LOL - That was good.
The first thing Obama will do is let the Bush tax cuts expire.
Then he would impose a win-fall profits tax from 15% to 28% and raise taxes on anybody making 250,000 or more. But in reality he will have to raise every bodies taxes more to give out his 850 billion dollar scheme. Then give it to 40% of people not paying any taxes! how does that grab ya?
thanks for the link
“The first thing Obama will do is let the Bush tax cuts expire.
Then he would impose a win-fall profits tax from 15% to 28% and raise taxes on anybody making 250,000 or more. But in reality he will have to raise every bodies taxes more to give out his 850 billion dollar scheme. Then give it to 40% of people not paying any taxes! how does that grab ya?”
The warm thrill going up Chris Matthews’ leg just turned into a cold chill going down my spine, ending in a pain in my @ss.
Obama’s so-called tax plan is a talking/debating point, a campaign creation which will NEVER see the light of day. There will come a point when we would be happy to have his campaign tax plan compared to the one that acutally get’s implemented. The Dem controlled Congress will sock it to Joe, punitively so—upity red neck.
I’d think that he’d have to tax net on any individual or individual proprietorship. It is still gross, though!
I would have loved to hear McCain ask this very question for the simple reason i doubt that Obama has a clue what the difference is.
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3 The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59.
So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beer by $20. 'Drinks for the ten now cost just $80.The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers?
How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so the fifth man, like the first four, now paid nothing (100% savings). The sixth now paid $2 instead of $3 (33% savings). The seventh now pay $5 instead of $7 (28% savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 ( 22% savings). The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. 'I only got a dollar out of the $20,' declared the sixth man.
He pointed to the tenth man,' but he got $10! "Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too.. It's unfair that he got ten times more than I! "That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!
"Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor! 'The nine men surrounded the tenth and beat him up. The next night the tenth man (the richest) didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
http://www.ktok.com/pages/mullinsinthemorning.html
MyWay news
Joe the plumber throws a wrench into tax debate
Oct 16, 3:33 PM (ET)
WASHINGTON (AP) - Small business owners, the kind Joe the plumber hopes to become, will need an expert from another profession - a good accountant or perhaps someone with a crystal ball - to know whether Barack Obama’s tax plans will help them or send money swirling down with the Drano.
Is John McCain right? Would someone owning a company that makes more than $250,000 a year pay higher income taxes under Obama, as McCain claimed in making Ohio plumber Joe Wurzelbacher the man of the moment in Wednesday night’s presidential debate?
Much depends on how such a company is organized for tax purposes, and what its profits are. Wurzelbacher could well end up with a tax cut under Obama if the company he works for and wants to buy - now a two-person operation - continues to share earnings.
On the other hand, it’s not certain that a business owner in that category would qualify for the tax credit Obama proposes to give to small businesses that provide health insurance for workers. Nor is it clear that the company would be off the hook from Obama’s health insurance mandate.
Here’s what the candidates say:
McCain, to Obama: “What you want to do to Joe the plumber and millions more like him is have their taxes increased and not be able to realize the American dream of owning their own business.”
Obama: “If you make less than a quarter million dollars a year, then you will not see your income tax go up, your capital gains tax go up, your payroll tax. Not one dime.”
Well, Obama would increase the tax rate to 39 percent from 36 percent on joint income over $250,000 and individual income over $200,000. Most families would get a tax cut under his plans.
But would Wurzelbacher pay more? There’s no telling based on the scant facts that are known. He said the company brings in over $250,000 but has not said how much he would earn personally as the owner. It also depends on whether he files business taxes as an individual taxpayer, as many small businesses do, or takes a more complicated approach to avoid higher taxes.
Obama has not defined a small business - and a lot of money rides on that unanswered question. The consequences of his plans, plus and minus, go beyond income taxes for business people whose earnings are in the vicinity of a quarter million.
Obama’s health plan makes crucial distinctions that are not defined. Medium and large businesses would be required either to provide health insurance for workers or to pay into a fund.
“Very small businesses” would be exempt from that requirement. Not only that, but Obama would give small businesses a 50 percent tax credit to help them afford health insurance for employees.
What’s very small, small, medium and large? Obama doesn’t say.
In Toledo on Sunday, Wurzelbacher told Obama that he wants to buy the plumbing company he works for, and that the company makes more than $250,000 a year. “Your new tax plan is going to tax me more, isn’t it?”
The answer: It depends.
By Calvin Woodward
http://apnews.myway.com/article/20081016/D93RPFO00.html
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