Tuesday, July 10, 2012

Dems Push Bogus Tax Relief For Small Business

They are at it again! The Democrats in the Senate are pushing what they call the Small Business Jobs and Tax Relief Act. It would grant small businesses 10 percent tax breaks for expanding payrolls either through hiring or raises, and would extend for another year the 100 percent bonus depreciation that businesses can take on assets. The bill, which also contains a break on the alternative minimum tax for corporate taxpayers, would cost about $28 billion overall.

Here is why it is a red herring. The tax "break" is only for "expanding payroll". In other words, if you cough up $50k a year to hire a new employee, you get a mere 10% tax break. And there is no assurance that tax break will last - it probably expires, or will be removed at some point. Then the business is stuck with a $50,000 salary and no $5,000 tax break. As if the small business, even with the tax break, has the "extra" $45k a year to shell out.

Not only that, the President is pushing to INCREASE the tax on the same small businesses by not extending the Bush Tax Cuts for them. So it's a wash.

I own a small business (actually, a couple). There is no way that saving a dime of taxes if I spend a dollar would induce me to spend that dollar.

They had a liberal think tank determine that this bill would create almost a million jobs. No way! Business owners did not own successful businesses by being stupid, and falling for this would be stupid. Further, the think tank did the study using preliminary estimates from Congress' Joint Tax Committee. We all know how accurate the Joint Tax Committee has been! NOT.

The Democrats adamantly refuse to accept that there is only one way to get businesses hiring. You need to make the climate friendly to hiring. That means a lower corporate tax rate, and a reduction of regulations, and it must be LONG TERM - at least 5 years. Businesses plan in 5 year cycles. If uncertain what the taxes or regs will be during that time, they get nervous and reduce hiring and expansion.  EVERY company that left the U.S. for "greener pastures" in China, India etc. did so because the tax rate is less and the regulations are not overbearing. Every one.

But to toss businesses a meatless bone is an insult.On the one hand I can keep my dollar. On the other hand, I can give to it someone as a raise and get 10 cents. Hm-m-m. A dollar in my pocket, or a dime.

Not a tough choice!


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