47% of Americans pay no federal taxes, another 25% pay so little it’s insignificant. The national debt is apparently less of a concern to these people. That is not right at all.
The nation’s infrastructure (bridges, dams, roads, schools, water supply) all received a failing grade and need $2.2 trillion to be upgraded to “pass.” These are all the things that define quality of life in America.
Small Businesses
70% of all new jobs are created by small businesses. Obama loves to say nobody making under $250k will see an increase in taxes, implying every time that all small business owners make more than $250k. The average salary of small business owners is $40k to $100k.
Large Businesses
The minimum tax for every corporation in the U.S. is 20%, based on their net profits not gross income. The rates increase quickly, to a maximum of 35% to 40% for the largest companies.
In addition, large and small businesses pay (1) 6% of your salary or wages into unemployment insurance, (2) half of your Social Security taxes or 6%, (3) half of your Medicare taxes or 1.5%.
Taxes
The top 5% of wage earners pay 60% of federal taxes. The bottom 50% pay 3% of the taxes. Obamacare and the expiration of the Bush tax cuts at the end of 2010 will increase the tax burden on small business owners by 20% or more.
Other taxes being debated in Washington imply that a further tax burden will be placed on corporations and small business owners very soon. Nobody hires new workers when you can’t even be sure if you will be able to pay your taxes.
VAT Tax
The President’s “Debt Commission” is apparently keen on a VAT tax, a kind of federal sales tax. The tax is not added at the register when you pay for the item, but is added back in the manufacturing and distribution pipeline for every item or service you purchase.
The plan is to reimburse poor people for the extra cost of this VAT tax by increasing the Earned Income Credit. This is good for poor people, but it also puts the entire burden of this extra tax upon the corporations and the small business owners.
Again, nobody hires new workers when you can’t even be sure if you will be able to pay your taxes. Doing so assumes extra risk, and puts the livelihood of your existing workers in jeopardy.
