Obama's tax increase for those making over 250,000?
I'm planning on voting Obama, but I have a question about his tax plan. He's says only those making 250k a year will see a tax increase. McCain said that would hurt some small business owners because many of them make over this amount. So, does that mean corporations making over 250k will see tax increases, or just INDIVIDUALS making that? I work for a large clothing retailer. I'm concerned that retailers saw a plunge in sales last month. I worry that if they're taxed more, it will be a major problem. I was hired as seasonal help, and she said that it was a trial basis - the good workers are usually kept on, even if they have to switch departments. But the first thing she said when she called to tell me I got the job was that I understand this is just a temp job, right? So, I'm really hoping things go better with the economy so I won't get laid off. I don't think extra taxes for large corporations are a good idea, now or in the long-term. Maybe if/when things are more stable, it would work. All that I've seen says that the only retailers doing well are Wal-mart and grocers, though the store where I work is a large chain that sells to the middle/working class people, and I wouldn't expect it would topple.
- Anonymous1 decade agoFavorite Answer
by not raising taxes, america is increasing its deficit. you know those big guns you buy to blow up innocent iraqis? that money has to come from somewhere.
- 1 decade ago
I'm amazed by how many people don't get this.
I've seen people point to this URL - http://taxcut.barackobama.com/ -
where you can enter your income, and find out whether you'll get taxed or not- what a scam. it doesn't matter what you put in, you won't get taxed according to their widget.
You SHOULD worry. Think about it - a small business that has 4 employees and an owner making $50k each is hitting the 250k mark. Probably much more, since you have to pay their payroll taxes, workers comp, etc...
Tax cuts affect everyone. If you're trying to grow your business, and you see you're approaching 250, what are you going to do? slow down, for fear of being penalized? What about the people you were going to hire- oh, well - can't afford you right now.
This tax plan boils down to this -
If you choose to bust your butt and work harder than someone else, and finally start to succeed and make money - in comes the government and says, oh that percentage you WERE giving? That's not enough anymore-throw some more cash in our bucket!!
Or maybe this will make more sense-you bust your hump to get that $5000/year raise, and when you do, you've suddenly bumped up to the next tax bracket -now the boss takes $4500 of it and passes it out to the employees that did nothing. What would that do to your motivation to make more money, or work harder?Source(s): http://tinyurl.com/4v78xj
- 1 decade ago
Lets say we have a rich DVD manufacturer, that employs 100 middle class American’s. His taxes just went up based on the Obama plan. Do you think the Rich Guy is just going to take a pay cut? He will make sure his bottom line stays the same or increases. He will do one of two things. He will lay people off until the figures work to his benefit and that could be as little as two new unemployed middle class American’s or as many as five. If he chooses to keep all his current employees then he will raise the price of his DVD’s.
Well as it turns out the company our DVD manufacturer purchases his polymer from to make DVD’s also had a tax increase. The cost of the polymer went up (looks like he didn’t choose to lay people off either). Our Rich DVD manufacturer decides to increase the cost of his DVD’s $.25 to cover his new taxes and the cost of the polymer. The local grocery store whose owner is also considered rich wants to purchase those DVD’s to put in their paper/miscellaneous goods isle.
Sadly the shipping company’s owner is also considered rich and the price to deliver the DVD’s went up $.25. The store owner end’s up adding $.50 on top of the $.50 the Rich DVD manufacturer and shipping company increased the cost and now the DVD spindle the local student needed to finish his extra credit report for school is a dollar more than it was before the tax increase took place. Oh and that student that got his money from Middle class American Mom and Dad, he had to pay taxes on that additional dollar as well.
Now think about the:
Rich egg farmer
Rich dairy owner
Rich orchard owner
So how is your grocery bill looking? Does Obama's plan to tax only the rich effect you?
I forgot the third option for our rich DVD manufacturer; He could just move the entire business to a different country.
- 1 decade ago
Look, Politicians on both sides make promises to get elected, some of them will be implemented, some won't. The president doesn't have absolute power.
However, if Obama implements even half of the programs he's talking about, taxes will go up for everyone, don't be fooled. The money has to come from somewhere, since some idiot gardener chopped down the money tree behind the White House during the Carter administration.
And even if by some miracle YOUR taxes don't go up, prices of everything will go up because corporations don't pay taxes, the consumer does, in the form of increased prices. You can't just "tax the rich." And come on, don't we all want to be rich someday? Isn't that what we're all working for? Isn't that the American Dream, to work your butt off and retire in style? Higher taxes hurt everyone.
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- 4 years ago
You are neglecting to factor in the tax credits for business expenses, the tax credits for hiring american workers, the many and various other tax credits that these smaller companies get, and will continue to get. However many of the companies use these credits and other tax loopholes to pay a small fraction of the taxes that they should (that is what happens when you can afford to hire accountants and specialized tax lawyers) and these loopholes are going to be closed up. But if you really think that those making under 250k should continue to pay the bulk of this countries taxes while the companies that they work for, sweat for, buy from, and basically support in every way are exempt than perhaps while we poor saps are socialists, you are an elitist.
- 1 decade ago
One of his spokesmen on TV today was specifically asked if that was gross or net, she said net! Also, did Obama ever stop to think that anyone like Joe who "plans" to buy a business may have to take out a loan on his house to do so to buy that business. He's not getting it for free? So when he finally makes $250,000 after a few years of running up more debt, in stead of having extra money to pay down the mortgage that helped start that business, Obama's got his hands in your pocket so that he can pass the money on to those he wants to "buy" votes from. And give taxpayers hard earned money to organizations like Acorn that are trying to steal the election.
Obama's never had to make a payroll with money that he had to earn.
Isn't working thru May or June for the government enough! Government just wastes our taxpayer dollars anyway on special interest groups buying votes at our expense. Let the working man keep the money, spend it himself on what he want to enjoy and that will create jobs.Source(s): Personal experience of starting a business several years ago, employing 8 people, giving them a health care plan, going into debt "personally" thru equity lines on our home and credit cards, doing without vacations, working 60-80 hours a week and the daily stress of trying to make payroll, paying the rent, vendor bills, liability insurance, D & O insurance, worker comp insurance, fees for all the government fed and state regulations, taking a salary less than half the time in those years. So if and when the company finally makes a profit, that excess over $250,000 should not be taxed anymore, it should go to paying down our personal debt that was used to start the business, create those jobs, and pay the government all those federal and state taxes that were sent for the employees. I am not into re distribution of wealth, better know as socialism! That's what Obama stands for!
- 1 decade ago
This is a severe "out of touch" moment on the part of both candidates. McCain, for suggesting that Obama's tax cut would hurt small business, and Obama for not correcting it. It shows they don't understand the tax system. Individuals/families and businesses operate under two different sections of the tax code.
Businesses get their tax break in the form of deductions for expenses to do their business and tax credits for doing things that are not so much a part of their business. This would be things like putting in pollution controls, or an auto company retooling to make green cars, or a tax credit for providing health insurance for employees.
Individuals don't get to deduct the cost of automobile gas, but businesses do, as well as all the other expenses to operate their businesses. So in reality the Obama tax cut has nothing to do with small business.
For example: if a company brings in $250,000.00 gross for the year, under the current tax code they get to deduct, their cost of goods (materials to make products, or buy products to resale), all their expenses, and take their credits before they have to pay tax on what's left, only.
If say, $30,000.00 was left after expenses, and their regular tax rate was 10% then the business would owe $3,000.00 in taxes and put $27,000.00 in their pocket. Most families pay way more than this in taxes.This is why everybody and his brother has a small business!
Now if the bottom line after all the deductions and before tax is $250,000.00 or more, Obama may mean he is going to raise the tax rate on this, but he is not making this clear. But, the busines is not being hurt because it has gotten to deduct every possible expense, salaries, office expenses, everything, and take every possible credit. It is essentially a tax on profits. Remember all expenses get paid first then tax is taken.
Hope this helps
- 1 decade ago
I had the same question. For those of us that just get a paycheck, it is confusing. The proposed Obama tax is on income, not gross receipts. A simplified picture is this--If Joe the Plumber's business collects $500,00 from his customers, but 250,000 of that was for materials and such, ( You pay the plumber $800 but some of it is materials and some labor.) and $60,000 was what he paid to employees in wages, he only pays tax on his income-- what's left in this case the guy has $190,000 to be taxed--even though he originally took in $500,000.
That means a small business with 10 employees might take in $100,000, but after paying for the cost of the goods it sells and employee wages, the owner makes no where near $250,000.
An individual will pay higher taxes after $200,000, while a couple pays after $250,000...not sure about heads of households.
LLCs typically pay themselves a salary, and that's what they'd pay tax on.
- 1 decade ago
One of Obama's own staff members today in an interview clarified that Obama is indeed talking about GROSS INCOME when he is talking about the $250,000 limit. There are lot's of businesses that Gross over $250,000 but only NET $5,000, $10,000, $50,000, etc. etc. Some even break even or lose money.
This is going to cause a lot of businesses to close down and cause a lot of workers to lose their jobs.
- kidachanLv 51 decade ago
it will be the companies that make a gross of 250K which mean that the money that is being used to pay your salery woudl be taxed and you'd be out of a job.
if it were 250k net that would mean that after paying people and expensives there would be 250K or more left in profits left which would be taxed bbut he's taxing the gross before yo get paid.
ouch. i work on a similar bases and i sepect that if this taxe increa occurs then i will be out a job too
- 1 decade ago
Doesn't really matter about Obama tax plan. Where going in to a depression start saving money, better yet get silver coins or gold.