Unemployment hits 9.8%

[spookyturtle 9,466]

You cannot PUNISH American emplyers for hiring Americans with payroll taxes, insurance requirments, safety requirements, etc. and then ALLOW them to avoid all that and hire illegal aliens and pocket the difference.

It is NOT the "illegal's fault" it is the government's fault for allowing this to happen.

So true.

[Mr. Big Dog 10,747]

3 percent tax increase in pretty hefty when most businesses have slim profit margins. Think of what a tax increase like that can do if the business is operating at an 4-5 profit margin to stay competitive.

If you have a slim profit margin, then what we're talking about is 3% of slim above 250K. Say you do $1,000,000.00 in sales at a 4% margin. That leaves you with $40,000.00. No tax increases there at all. It's just that simple. Say you do 10,000,000.00 in sales at 4% margin. That leaves you with $400,000.00. You will continue to pay the lower tax rate for the first $250K and will pay 3% higher rate on the remaining %150K. 3% of $150K is $4,500.00. So, really, measured on your total income, you're looking at just over 1% more in terms of tax liability. That's not the end of the world when you take home $400K.

Edited December 4, 2010 by Mr. Big Dog

[JohnSmith2007 353]

If you have a slim profit margin, then what we're talking about is 3% of slim above 250K. Say you do $1,000,000.00 in sales at a 4% margin. That leaves you with $40,000.00. No tax increases there at all. It's just that simple. Say you do 10,000,000.00 in sales at 4% margin. That leaves you with $400,000.00. You will continue to pay the lower tax rate for the first $250K and will pay 3% higher rate on the remaining %150K. 3% of $150K is $4,500.00. So, really, measured on your total income, you're looking at just over 1% more in terms of tax liability. That's not the end of the world when you take home $400K.

When you have a business that deals in equipment that costs 500K a unit it is pretty easy to go over that 250K. At that point it begins to hurt the companies ability to fund its next project. A tax increase on the top 250K will cost jobs. A lot of them.

[Usui Takumi 1,562]

When you have a business that deals in equipment that costs 500K a unit it is pretty easy to go over that 250K. At that point it begins to hurt the companies ability to fund its next project. A tax increase on the top 250K will cost jobs. A lot of them.

If their making more than 250k PROFIT then they are in the roughly the top 2% of small businesses...certainly not the norm. IE a 500k machine would be an operating cost.

Edited December 4, 2010 by Sousuke

[JohnSmith2007 353]

If their making more than 250k PROFIT then they are in the roughly the top 2% of small businesses...certainly not the norm. IE a 500k machine would be an operating cost.

They make more than one of them each year. The margin is somewhere around 50K per machine. If you have a turnover of 25 each year that is 1.25mil. One million of that would be taxed at the higher rate. Trouble is that money must go to pay for the next project. A small business is lucky if it makes 3% profit. This tax would stifle new hiring and in the end cost jobs.

[Usui Takumi 1,562]

They make more than one of them each year. The margin is somewhere around 50K per machine. If you have a turnover of 25 each year that is 1.25mil. One million of that would be taxed at the higher rate. Trouble is that money must go to pay for the next project. A small business is lucky if it makes 3% profit. This tax would stifle new hiring and in the end cost jobs.

Meaning the company makes 10% profit? Far better than the average small business and no wonder its in that top 2% that will be affected.

On one hand your saying many small businesses will be affected because their profits are low and then on another your picking a business that fits into that very small percentage of small businesses that may actually be affected. That's nitpicking....... If 98% of businesses are not affected is it not disingenuous to say that lots of businesses will be affected and lots of jobs will be lost?

Now you mention the profit goes to the next project. Can you explain this further? It sounds like the money is going towards new expansion? If your saying it MUST go to the next project it sounds more like its still an operation cost and not profit.

Edited December 4, 2010 by Sousuke

[luckytxn 2,265]

If you have a slim profit margin, then what we're talking about is 3% of slim above 250K. Say you do $1,000,000.00 in sales at a 4% margin. That leaves you with $40,000.00. No tax increases there at all. It's just that simple. Say you do 10,000,000.00 in sales at 4% margin. That leaves you with $400,000.00. You will continue to pay the lower tax rate for the first $250K and will pay 3% higher rate on the remaining %150K. 3% of $150K is $4,500.00. So, really, measured on your total income, you're looking at just over 1% more in terms of tax liability. That's not the end of the world when you take home $400K.

Sounds like we should be happy that the rich are getting soaked huh. OK now lets assume that 4500.00 is chicken feed and that much is OK to rip out of the hands of that business owner to pay for your health care. That amount could have been used to pay for some much needed business expenses. Also as many don't seem to understand is that almost all of the expenses that the business will incur will now be costing more as the companies they buy from are being hit by the same taxes. So across the board the expenses will be rising making that 4500.00 way more. Since I own a business with my wife and also have owned several business in the past I could post here the many expenses that is accrued daily just to be in business but I am sure that anyone with an ounce of sense knows what I mean. These costs now have to absorbed or passed. To absorb the costs mean that a possible employee is let go or no new hiring. I would wait till I see what additional expenses are going to be accrued before I make a major decision to hire anyone. Now to pass that increases onto my customer I will hope that all of my competitors will do so also so we have a level playing field or I am toast and lose my loyal customers who are also hurting and looking to cut costs. The small business owner is the engine of hiring in this country. It is all well and good to trot out the huge major corporations and vilify them but playing this game is making the ones that can ill afford to handle the major increases. To make the huge corporations look so bad and show their huge profits means that we have to vilify the small business too and that is why we will have high unemployment numbers for awhile to come.

[luckytxn 2,265]

Also I like how the Socialists like to vilify the business when it shows a profit and their now take home pay. As an example lets take that 400,000.00 figure that owner now has and is going to take home and splurge. That business owner now has to try to realize what they need to live on and then figure how much business expense they want to expend to keep their business viable. Do they need any new equipment? Do they need to do any refurbishment on the interior or exterior? Would they like to maybe do something for their hard working employees and maybe give a certain percent to them as a bonus? There are many decisions to be made here and each will be affecting whether that business will be hiring any new people. Their decisions also mean that any and all services or spending will determine those companies they would of been expending their profits on will be hiring. That 400,000 is a perceived profit and not reality at all.

[slim 1,530]

much of which actually went to states allowing them to keep teachers in the classrooms and police on the street.

And let's not forget those 22,000 jobs at Caterpillar we heard about or GM, Chrysler, etc.

I find it hilarious (in a dark comedy sort of way) that we tout saving jobs in failing businesses as "success." Teachers and cops make no product and work for institutions that make no money. They are entirely dependent on govt. money (tax dollars) for support. Without taxes, they fail.

Auto makers, banks, investors and other businesses that are losing money have to cut costs to survive. If we the people (through taxes) pay for them to survive, aren't we doing them much like we're doing the teachers and cops? We're basically paying them to work?

I'd like to see in the constitution where it says I'm supposed to pay for teachers, cops, auto makers and investment bankers.

[Mr. Big Dog 10,747]

When you have a business that deals in equipment that costs 500K a unit it is pretty easy to go over that 250K. At that point it begins to hurt the companies ability to fund its next project. A tax increase on the top 250K will cost jobs. A lot of them.

The cost of doing that business isn't income and hence not subject to any tax that is being debated. Your argument makes no sense.

[Mr. Big Dog 10,747]

They make more than one of them each year. The margin is somewhere around 50K per machine. If you have a turnover of 25 each year that is 1.25mil. One million of that would be taxed at the higher rate. Trouble is that money must go to pay for the next project. A small business is lucky if it makes 3% profit. This tax would stifle new hiring and in the end cost jobs.

Any part of the margin that pays for the next project, is not income anymore and hence not taxed as such.

[Mr. Big Dog 10,747]

Sounds like we should be happy that the rich are getting soaked huh. OK now lets assume that 4500.00 is chicken feed and that much is OK to rip out of the hands of that business owner to pay for your health care. That amount could have been used to pay for some much needed business expenses.

What pays for business expenses doesn't get taxed as income unless you're stupid enough to report it as such in which case we should probably levy a higher rate. After all, you'd be screwing yourself so there would be no problem if Uncle Sam gets in on that action.

Also I like how the Socialists like to vilify the business when it shows a profit and their now take home pay. As an example lets take that 400,000.00 figure that owner now has and is going to take home and splurge. That business owner now has to try to realize what they need to live on and then figure how much business expense they want to expend to keep their business viable. Do they need any new equipment? Do they need to do any refurbishment on the interior or exterior? Would they like to maybe do something for their hard working employees and maybe give a certain percent to them as a bonus? There are many decisions to be made here and each will be affecting whether that business will be hiring any new people. Their decisions also mean that any and all services or spending will determine those companies they would of been expending their profits on will be hiring. That 400,000 is a perceived profit and not reality at all.

If it isn't reality, then it isn't taxable as income. What's your point?

[luckytxn 2,265]

What pays for business expenses doesn't get taxed as income unless you're stupid enough to report it as such in which case we should probably levy a higher rate. After all, you'd be screwing yourself so there would be no problem if Uncle Sam gets in on that action.

If it isn't reality, then it isn't taxable as income. What's your point?

I will try to make this simple for your sake. As you go along through the business year you will have expenses and that is an operating expense and not taxable. You are saying that after all is said and done that person now has 400,000.00 profit and they take that home and do whatever so a extra tax bite of 4500.00 is nothing. You are vilifying that person and making it look OK to hit that person to pay for others Socialist wants. That is playing Robin Hood.

Now after all is said and done and all operating expenses to just be running a business have been accounted for and the Taxes levied and there is a profit showing is the time any business person has to make some decisions. A business wants to grow of course and also to keep their employees happy at the same time but of course they need to also bring home some bacon for the family. It is from the profit that they must decide if they want to expend on any infrastructure to grow or maintain the business in the same mode. They also need to see about setting aside any bonuses for their employees or have that Christmas party or whatever. Now the following year they are able to then take any expenditures and tax deduct them but they have still decided to spend that money from their profits. (Like now I am looking at maybe spending a lot of money to buy a more energy efficient central air and heat. It will cost a ton of our profits we have had but in the long run it will save us money and even pay for itself in the long run I am hoping. This means I am now spending what little profit we have had and having actually no profit this our first year.) It is usually at the end of a business year that decisions are made on what to do with profits and how much to plow back into the business. It is also the time of the year that one must make decisions on how much to reward the employees for their hard work.

And to make it all simple also is that you refuse to acknowledge that the tax bite also goes to any of my suppliers and contractors and any and all that charge my business for things I need and so that very small tax bite (You say) is also their tax bite and they need to either absorb or pass that cost on to me. That small tax bite has now meant that all my operating expenses has risen so there is no small tax hike but a ripple effect that hits everyone. I have no idea which of my suppliers are going to absorb or eat that cost or pass it on or even a combination of the two so I need to keep more money on hand for any unseen expenses. This money could have been used to maybe give raises to valuable employees or even hire an additional employee but I am uncertain on how much I will have exactly to spend on that until I see stability.

Profits are there but it all a perception of what one sees as a profit. After all normal operating costs and expenditures are done and the outflow is decided and that is a profit to be sure. From that we must make decisions on what to plow back and if by plowing back will be a growth enhancer. There are a few but not most of business owners that will take that profit as all theirs and not care a whit about using some of that profit back into the business. You are right though and that expenses can be tax deductible at the end of the next tax year but not this one from where the profit is accrued. Remember the old saying, "it takes money to make money." No profit means no money to make money.

[Usui Takumi 1,562]

I will try to make this simple for your sake. As you go along through the business year you will have expenses and that is an operating expense and not taxable. You are saying that after all is said and done that person now has 400,000.00 profit and they take that home and do whatever so a extra tax bite of 4500.00 is nothing. You are vilifying that person and making it look OK to hit that person to pay for others Socialist wants. That is playing Robin Hood.

Now after all is said and done and all operating expenses to just be running a business have been accounted for and the Taxes levied and there is a profit showing is the time any business person has to make some decisions. A business wants to grow of course and also to keep their employees happy at the same time but of course they need to also bring home some bacon for the family. It is from the profit that they must decide if they want to expend on any infrastructure to grow or maintain the business in the same mode. They also need to see about setting aside any bonuses for their employees or have that Christmas party or whatever. Now the following year they are able to then take any expenditures and tax deduct them but they have still decided to spend that money from their profits. (Like now I am looking at maybe spending a lot of money to buy a more energy efficient central air and heat. It will cost a ton of our profits we have had but in the long run it will save us money and even pay for itself in the long run I am hoping. This means I am now spending what little profit we have had and having actually no profit this our first year.) It is usually at the end of a business year that decisions are made on what to do with profits and how much to plow back into the business. It is also the time of the year that one must make decisions on how much to reward the employees for their hard work.

And to make it all simple also is that you refuse to acknowledge that the tax bite also goes to any of my suppliers and contractors and any and all that charge my business for things I need and so that very small tax bite (You say) is also their tax bite and they need to either absorb or pass that cost on to me. That small tax bite has now meant that all my operating expenses has risen so there is no small tax hike but a ripple effect that hits everyone. I have no idea which of my suppliers are going to absorb or eat that cost or pass it on or even a combination of the two so I need to keep more money on hand for any unseen expenses. This money could have been used to maybe give raises to valuable employees or even hire an additional employee but I am uncertain on how much I will have exactly to spend on that until I see stability.

Profits are there but it all a perception of what one sees as a profit. After all normal operating costs and expenditures are done and the outflow is decided and that is a profit to be sure. From that we must make decisions on what to plow back and if by plowing back will be a growth enhancer. There are a few but not most of business owners that will take that profit as all theirs and not care a whit about using some of that profit back into the business. You are right though and that expenses can be tax deductible at the end of the next tax year but not this one from where the profit is accrued. Remember the old saying, "it takes money to make money." No profit means no money to make money.

Great! It sounds like a higher tax rate will actually cause businesses to spend more and lower their profit margin to escape the higher tax. Almost sounds like stimulus!.

[luckytxn 2,265]

Great! It sounds like a higher tax rate will actually cause businesses to spend more and lower their profit margin to escape the higher tax. Almost sounds like stimulus!.

Doesn't surprise in the least that you see it this way.