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Huh, since when do you pay taxes on gross income.

HD: Since last year, if you live in Texas.

The same thing is being proposed in IL.

The problem is people don't understand that a small business doesn't necessarily make a lot on what seems like a big gross. Also, most people don't realize that for a small business you might not be able to write off a large expense in a given year, but may have to depreciate or capitalize it over time.

For example, you may buy an xray machine that cost 25K, but you don't get to deduct the 25K, instead you have to calculate the cost over a 20 yr period even though the cost was incurred in one year. If gross receipts get taxed you might be running an actual deficit even though the return looks like you are making a big profit.

In the end, increased taxes on people means business is less inclined to expand and hire new people. The large pools of investment capital begin to look elsewhere for opportunity. IOW, less growth, fewer jobs.

The most insidious part of bambi's plan is the "tax credits" to those that don't pay any taxes, or pay very little. The "tax credits" are actually money that's taken from one group and given to another. IOW, redistribution of wealth. Just imagine what the govt. passing out other peoples money is going to do long term.

Just imagine what the govt. passing out other peoples money is going to do long term.

It's going to do exactly what it is doing for Hussein right now,,,

IT'S GOING TO BUY THE DEMOCRATS LOTS AND LOTS OF VOTES FOR A LONG, LONG TIME!

*sigh*

I just looked it up, and yeah, Doc's right. Texas now has a tax on gross receipts. See here. Effing Rick Perry. Well, that's gonna suck.

And you are quite right, WM, just because a small business has a high income, it doesn't mean it has high profits. We just did a $1.3 million engineering job, but actually lost money on it. Rick of the Hair is still gonna tax that $1.3 million.

Another thing that people may not think of is that, even if Obama's tax is on net profits, raw income - expenses, if your business doesn't have a steady flow of income and expenses, you could get stuck in the highest tax bracket because of bad timing. My dad and I build chemical and refrigeration plants. For a $1 million job, we might get only three payments of $333,000 apiece at certain times. Of course, most of that money is going to go to equipment and labor expenses. But if we just happen to have more than $250,000 of that payment still in the bank by the end of the taxable year even if it's in the middle of a job, we're going to get taxed on that amount. Doesn't matter if we post a loss at the end of the actual project. With this increase, that'll be more likely in fact.

And of course, even if we did post $250k in profit, it would just be reinvested into the business to grow it. Well, it certainly wouldn't grow as much with this tax hike. Thus a few people won't get jobs they might otherwise have gotten from us. Ahh, unintended consequences.

And we're about as middle class as you can get; this "only tax the rich" mantra makes me apoplectic.