Clearly we’re gonna have to CUT spending and SAVE more of the money many of us have been too willing to fritter away. That goes for you and me and the government. And as much as I hate to admit it, the Deficit Reduction Commission came up with some sound ideas. It should be painful for everybody. It’s outta hand and we have to do it.
But first . . . .
Regarding the extension of the Bush tax cuts, let’s quit with the class warfare game. First of all tax policy in effect for 10 years is just that- policy. Maintaining that policy is not a tax CUT, it’s a continuation of policy which, BTW should be made permanent. To bring back the tax levels of ten years ago clearly is an INCREASE! Just ask anyone with kids under ten whose child tax credit will go from $1000 to $500 per kid. Is that a tax increase or a tax cut?
Try to keep in mind that small businesses are the engine to our economy creating some 70% of all private sector jobs. The diehards who draw the “rich” line at $250K ($200,000 for individual filers) really need to get a clue. Obviously, they’ve never owned a business or been self-employed.
For nearly half of my working career I a was self-employed business owner, and yes some of those years I would have been called rich by the $250K standard. Millionaire or billionaire? Not even! So you need to be honest with yourself when you hear the rich described by the $250K standard.
Look at the real world. For starters, that’s $250K of GROSS income. Like many small businesses, my company was an S Corp in which case those earnings went right to our personal joint return.
As a Hawaii resident I got majorly whacked before even smelling any of that cash-ola:
- 15.3% of the first $106,800 earned is owed for Social Security tax
- 2.9% of the remaining $143,200 of income goes to pay Medicare taxes
- 33% federal income tax
- 8.25% Hawaii state income tax
- 4% Hawaii GE Tax
Aside from all that, the business owner is the risk-taker. Their cash and reputation is on the line. Nobody else assumes that role for you. You pay liability insurance, professional insurance, health-care for yourself and your employees, and in a really small business like mine you’re also the one worrying about who cuts the grass and does the janitorial and maintenance on your building or pays the rent if you don’t own it. And if you think keeping track of all those tax obligations and everything else is fun -hardly. It’s nothing but a time suck and drag on your productive energy.
Pension, retirement fund, personal investments, paid vacation, sick leave or family leave -ha! Fuggedaboutit! You’re the last to get paid and every time you take off from work it’s costing you money whether you’re sick or on vacation or going to your kid’s soccer game. So please shut up with the $250K rich thing.