Business/Finance

Dear Joe the Plumber: if you wind up paying more taxes, you're an idiot (update #2)

by JS O’Brien

Dear Joe the Plumber,

Welcome to your 15 minutes of fame. It’s not everyone who gets his name mentioned 286 times in a presidential debate.  If you haven’t already, you simply must change your business’s name to Joe the Plumber.  That’s just good marketing.  Oh, and don’t forget to add the tag line, “As seen on TV!”

OK, Joe, so you had a conversation with Barack Obama and, while media reports are very sketchy about exactly what your circumstances are (not surprising), it appears you want to buy a business that “brings in” more than $250,000.  I have yet to find out if “brings in” means $250,000 in revenue or profit (a very important distinction, Joe), but let’s assume for a moment that it’s profit we’re talking about.  Under Barack Obama’s plan (as sketchy as it is on his website), a good guess would be that you would go into a higher tax bracket, paying about 3.6% more in taxes on every dollar you earn over $250,000, for a total marginal tax rate of 39.6% — exactly the same as it was in the 1990s.

But let’s take a closer look at your situation, shall we Joe?

You say you’re planning to buy this business, and it must be a very large small business, indeed, if it covers salaries, expenses, trucks, inventory and the like and still yields a $250,000 + profit.  I’m going to guess that you don’t have the cash to buy this business outright, Joe, and if you do, I think you’re holding back on us.  I think you’ve inherited some money.  But let’s assume that you’re borrowing a fair amount of money to buy the business, using its book value (what the business is worth if you sold all the assets and paid off all your debts) as security and using the revenue stream to pay off the loan.  Let’s also assume a business this size is incorporated.

Here’s what you do, Joe.  First off, you have your corporation pay you a salary of, say, $249,000 per year.  Now you’re not in the higher marginal tax bracket, right?  Payments on the loan you took out to buy the business are fully tax deductible, so profits will be reduced by that amount.  If you still have more than $250,000 in profit, we’re talking about a rather large business here, and probably a very large down payment (which suggests that you can manipulate your down payment to reduce your taxes, doesn’t it?)

But here’s the thing, Joe.  When you own a business, you can do all kinds of things to reduce taxable income (profit).  For instance, you can buy more equipment, which can then be depreciated over the years, providing a tax deduction and increasing the company’s book value and, thus, your wealth.  Even fully depreciated equipment can generally be sold, in the future, for something.  You can spend more money on advertising and hire on a new plumber or two.  The advertising costs and the employment costs are generally fully tax deductible.  Well, let me take that back.  If you provide your employees with health insurance, your costs for health insurance won’t be tax deductible under John McCain’s plan, but who’s counting, right?

By advertising and hiring on, you can drastically increase your revenues (the amount of money coming in) while keeping profits below the $250,000 mark.  The increased revenues will make the resale value of your business much higher than it already is, increasing your wealth without getting taxed on that increase.  If you want to take more wealth out right now without paying taxes, there is a cornucopia of tax-free or tax-deferred retirement options, benefits, and the like that can move money right around the IRS’s outstretched palm.

Eventually, Joe, your company will be so large, and you will be so wealthy, than an extra 3.5 pennies in tax on each dollar on income you earn over $250,000 will be chickenfeed to you (if it isn’t already).  But, hey, it’s up to you.  Increase the underlying wealth in your company without paying taxes, or take cash now and pay a few additional taxes on it.

But, please, don’t complain to me about paying more taxes.  All it says to me is that you’re not smart enough to run your business’s financial side.

All the best to you and yours,

JS O’Brien

UPDATE

It turns out that Joe is not a good businessman for a simple reason:  He doesn’t own a business, appears to have no immediate prospects to do so, has no plumber’s license, works for a small firm doing residential work (which means his employer is unlikely to be clearing $250k per year), and has occasionally talked to the owner about buying the business — someday.

Poor Joe.  He’s about to get ripped to shreds by the media, and he seems like a pretty decent guy.  I feel for him.

On the other hand, Joe is a great example of those who are so terrified that they’ll get rich some day and owe an extra 3.5 cents on every dollar over $250,000 that they spend a lot of time worrying about it.  Joe doesn’t know that he is unlikely ever to make that kind of money.

UPDATE #2

It just gets better and better.  Bloomberg is reporting that Joe owes around $1200 in back taxes, and there is an Ohio lien filed against him.

59 replies »

  1. You even left an angle out. If he sells that fully depreciated equipment he realizes a taxable gain. But if he then takes the proceeds from the sale and uses them to reinvest in a like-kind asset (say he’s selling a truck and buys a new truck) he can defer the taxable gain on the sale indefinitely by executing a 1031 Like-Kind Exchange.

    There’s all kinds of ways a smart guy like Joe can avoid the poorhouse.

  2. Damn, I’ve been scratchin’ my head about whether that $250k would put him in a higher tax bracket. Thanks for trying to sort it out.
    He went on Good Morning America today and said that he wasn’t actually making $250k, but thinks he could be soon. Looking at the few interviews he’s done it looks like he was looking for a way for Obama’s tax plan to hurt him. But kudos to him and Obama for putting on a better town hall debate than the official one.

  3. I ain’t even telling nobody what business I’m in, JS. I’m just pointing out a basic fact of the tax code.

    When you know as little about the tax code as I do, you take what few chances you get to show off….

  4. JS:

    I’m in full agreement with you regarding Joe the Plumber. There’s no way that Obama’s tax increases on anyone making $250K should affect anyone with a half of degree of intelligence. I made a day trip over to the Bahamas earlier this week, and was startled at how the Bahamas is starting to ramp up for all the business they’re going to get from astute American businessmen. People are going over in droves, setting up corporations to take advantage of the friendly business climate and easy tax codes. A banker that I talked to said that deposits are flowing into their banks at the highest rates ever. If anything, I’d be bullish on the Bahamas. If one wishes to legally minimize their tax bill, there are many ways to make it happen. I’ve gotten a crash course in the offshore world as of late, and find it amazing, and 100% legal as long as one declares their personal income. I only wish that I had taken advantage of offshore business entities 25 years ago.

    Jeff

  5. I think we can agree that whether your country cares about you or not, and thus deserves your taxes, depends on the regime in power.

  6. Actually, jeff, the reality is that a Republican run country doesn’t care about you, and a Democratically run one tends to.

    Republicans want to cut spending on the little guys while giving money to the big dogs.. Democrats want to circulate wealth (stagnation causes rot, dontchaknow) and care for those that are chewed up as a matter of course by the big dogs.

    The real point is, there’s more than enough wealth in America for _everyone_ to live pain free lives, and for the rich to STILL have ass loads of money.

    The right-wing has taken the sub-title “compassionate conservatives” as a cover for the truth. The right-wing mantra is “I got mine, fuck you if you can’t get yours”.. then they cry like babies if someone DOES take theirs.

    And the _other_ major problem (aside from letting the very wealthy lock up the wealth indefinitely, which causes stagnation and rot) is the fact that you CAN offshore money to avoid paying taxes on it. If you live and do business in America, you should have to pay taxes here. Allowing people loopholes to bury money in is dirty. All of these free trade agreements that allow us to kill humans in other countries so we have cheap shit here doesn’t change the fact that American companies are killing people for profits.. it just hides where they do it. … shameful.

    And Joe the Plumber is a lacky for a single plumber (from what I read, the “booming business” is handled by one plumber [licensed] and the lacky). I’d like someone to get their tax records and show me how 2 people fixing toilets and installing furnaces is clearing $250,000 a year in profits. If that’s the case, I’m in the wrong business!

  7. Joe doesn’t have a plumbers licence, the owner of the business he works for doesn’t have a plumbers license. The plumbing business Joe works for consists of him and the owner. Now you know why he leans republican. He’s convinced that he’ll be wealthy, but there’s not much of chance that ever happening. People like him consistently vote against their best interests because they’re ignorant.

  8. So Joe the Plumber is practically related (through in-law status) to Keating. Where have I heard THAT name before? Oh, yeah, he’s practically related (through in-money) to McCain! “Joe the plumber” indeed. More like “Joe the Republican Lobbyist”! If this gets out into the mainstream media, McCain/McSame is a cooked Bush!

  9. Here’s some nice irony for you that even the CNN bimbo Mary Snow did’t care to report: Apparently the Republican dirtbags who are trying to suppress the vote would also have prevented this smart-aleck moron from voting:

    ‘Joe the Plumber’ happy to help candidates make point
    http://www.cnn.com/2008/POLITICS/10/16/joe.plumber/index.html

    “Local election officials confirmed that Wurzelbacher was registered to vote. They said that he was incorrectly registered as Samuel Joseph Worzelbacher and that he voted for the first time in Pennsylvania’s Republican primary on March 4.”

    Obviously his SSN and address would not have been verifiable given the error in his name that he apparently was too stupid or too lazy to correct, so he should have been purged:

    Ohio elections chief appeals court ruling
    http://www.ohio.com/news/break_news/31101144.html

  10. Poor Joe. The guy spends all day replacing wax rings on other people’s toilets; trying to avoid a mouthful of sewer off gas; and reminding people that tampons are NOT flushable. Here was his big moment, when everyone would know his name…the day that Joe Wurzelfuckshisface would ring across the amber waves of grain. He would show that socialist, terrorist loving Obama. And maybe John McCain would make him secretary of hot water or something.

    But alas, it was not to be. His dreams are swirling away like turds down a well installed toilet. He may even have to contest his right to vote because his driver’s license doesn’t match the spelling on the voter registration list. It would be damned near Shakespearean if he were denied his right to make sure that Murica never goes socialist.

  11. Hah, man. Some great comments here. I won’t rebuke any of you because I’ll be dogpiled, but it’s awesome seeing real people ask the government to take more of their money so the fatcats on top can decide how they live. Amazing.

    Live the American dream! Unless the American dream involves making over $250,000, you big-headed, selfish, hard workers!

  12. Several sites are now reporting that Joe the Plumber Wurzelbacher from the Toledo event is a close relative of Robert Wurzelbacher of Milford, Ohio. Who’s Robert Wurzelbacher? Only Charles Keating’s son-in-law and the former senior vice president of American Continental, the parent company of the infamous Lincoln Savings and Loan.

    So Joe is not a licensed plumber, cant afford to buy his boss’ company, claims it earns $250,000 per year when tax records show it earns less than half and is a member of the Charles Keating family? Is anyone else thinking what I’m thinking?

  13. Many years ago when my husband started in business the first year he made $6ooo profit. Our accountant said” that won’t happen again”

  14. The government doesn’t take care of you or your family. YOU should. Simple as that.

    As a pharmacist wanting to open his own store my profit will be over 250k. But when you have to stock over 150k worth of medications, pay staff, pay lease and utilities there isn’t that much left for you. And not to mention licensing, theft/business insurances, poor federal, state, and even private insurance reimbursement policies puts you way below 100k a year that I make before tax. Income tax and federal program take as it stands is 27% so that leaves me as a PharmD at less than 70k a year in my pocket. Kick that up to 28% and even 30% then I’m in an even worse situation.

    I became a doctor for this…

    Baby mama can’t pay for her kids antibiotics but can pay for her Navigator… Welfare at its finest. Before expanding medicaid and welfare, why not try to look towards cutting the fraud in the system.

    I’m getting tired of taking care of you people.

    Republican pharmacist.

  15. Nick:

    Well, Nick, if you’re a doctor, I have just become very, very frightened about the state of my health care. A man who can get a medical degree but doesn’t understand the most basic business math is very likely to get the size of a prescription wrong by an order of magnitude. Please please please don’t tell me that you work anywhere NEAR me. When it comes to prescription drugs, I really try to avoid misplaced decimal points.

    You’re using the word “profit,” Nick, to describe (as best I can tell) top-line revenue. All the expenses you list reduce your profit so that it’s much, much less than $250k. Barack Obama’s plan will actually reduce your freakin’ tax rate.

    As for “taking care of you people,” based on the numbers you present, I can assure you that I pay more tax than you do. And that means I’m taking care of you. And you know what? Bill Gates is taking care of both of us.

  16. If only that were true…

    I’m not a medical doctor, I’m a pharmacist, and one that supports cost effectiveness over therapeutic efficacy when applicable. Affordable prescription healthcare is available now if one would ask their pharmacist to talk with your MD/DO etc… to make their treatments cheaper. I do it all the time if someone can’t afford their copay.

    The government only knows how much businesses make by how much you have made total before my take home and expenses. So if my store made 250k then they would tax the 250k before I made my take home. So an increase in that tax bracket would decrease MY take home. And I am not making 100k+ a year in salary, I would be looking at 60k if I’m lucky NOW as an independent.

    The pharmacy is a good example of taxing small businesses. Another is the plumber who makes over 250k in revenue only to spend over 150k on skilled worker salaries w/ benefits and the cost of utilities and supplies. Joe the plumber made a good concern present in a world where small business is becoming scarce. I would like to see Obama crunch numbers with Joe to see where he stands financially in his first month.

    If he is willing to do that successfully then he’s got my vote. But I doubt that will happen.

  17. Nick, even if anyone believed you and you were netting more than $250K Obama wants to tax everything above that amount at 39% so you would pay another, what, 3 cents on the dollar? So $30 more per thousand? I would suggest you buy the Yukon instead of the Hummer in that case.

  18. Nick,

    You are dead wrong. Have you ever actually filled out a Schedule C? I have. I’ve owned my own business for many years.

    Schedule C takes top line revenue. From there, you deduct all business-related, deductible costs, which include advertising, costs of goods sold (your inventory), employee costs, etc. You then enter what’s left (profit) on the 1040. THAT’s what gets taxed. I know, Nick, because I’ve done this many, many times.

    The feds tax profits, not revenues. If what you say about your situation is true, your taxes are going down.

  19. Nick, you are wrong, wrong, wrong. You state “The government only knows how much businesses make by how much you have made total before my take home and expenses.” NO NO NO. Since you are just waiting to open up your own pharmacy, this is forgivable. I assume, then, you have never filed tax as a business entity. I have a business as a sole proprietor. As such, I file a schedule C. You can set up your business as a Corp or LLC or whatever and use a Schedule D. CONSULT A BUSINESS ATTORNEY. But, the basic business tax forms remains the same. Check out a schedule C or D. It’s online from the IRS. This is what businesses file. On it you will see there are oodles of places where a company puts all sorts of expenses that lower their taxable income, including places for INVENTORY, RENT, INSURANCE, EMPLOYEE WAGES and on and on and on. This is how the government knows how much a company makes. There are no W-2 for businesses.

    Let’s go to your example. You have a business. You have GROSS SALES of $250,00. You put that on your tax form. You then put in Business Expenses, which include all the things I talked about above. You also put in YOUR SALARY, what your company pays YOU. It is a Business Expense. (NOT IF YOU ARE A SOLE PROPRIETOR.) All these things reduce your business revenue. Whatever is left, after you’ve calculated all your expenses is taxable business income. You tell the government what your company makes. No one else. Bottom line, the government does not tax unprofitable businesses (and I even won’t mention carry-over). And keep proof of all expenses paid because the government will not believe you if try to say your business is making zero a year, year after year, without evidence.

    Don’t get happy just yet. You haven’t escaped the tax man. Because you will pay taxes on your salary from your company as an individual. If you can manage to squeeze a $100,000 a year salary out of your business after expenses are paid, you will pay taxes at that $100,000 a year rate. And if you still think that is unfair, count yourself lucky that you where born in a country where you can make that kind of money as a pharmacist. Because you would not make that kind of money in 95% of the countries on this planet.

  20. Nick, as pointed out, you clearly don’t understand how business and taxes work, hence I call bullshit on your having your own pharmacy.

    A, “revenue” is not what you get taxed on. You get taxed on “profit”.
    B, “profit” is the total dollar amount you have left after you take GROSS revenue and subtract ALL “deductible” expenses (salaries, rents paid, inventory purchased, utilities, etc. etc). That leaves you NET revenue, or PROFIT.

    The government doesn’t tax your GROSS, they tax your NET. …. you don’t do your own taxes, do you..

    Now let’s look at the “welfare baby mama” crap you’re talking about. While it’s true that some poor people abuse the system and don’t use the money given to them for their children to actually care for their children, you’re wanting to punish the vast majority for the effective minority. That is, not “that” many “baby mama” (and man! does that intentional choice of words stink of bigotry.. hmm..) are out there driving “Navigators”. You’re perpetuating an exception (and likely a myth based on a supplanted income of drug money or prostitution) as the “rule”. I was on Welfare once.. and there was no where near enough money there to afford a “Navigator”. Unless we all wanted to live IN the car and not have money for anything else.

    I agree that we have some issues in how welfare is handled. I agree that it’s problematic to let someone get on welfare, then have more kids while on it.. But those are issues deeper within our society and punishing the vast majority of people that end up on welfare and use it for what its meant for is not acceptable.

    Besides, what do you suppose drives those dirt poor people to buy shit they don’t need, try to have “status” instead of food, try to impress people? It’s what the RULING ELITE want them to do, and so bombard them with every day on TV.. images of “you deserve more!” and “go spend money and be COOL!”. The “average” person isn’t smart enough to see past the intent (consumerism), which is _exactly_ what the “fat cats” are paying for (they spend billions on “professionals” to write ads that pull at the very core of our instincts and cause impulse buying and allow for easier use of poor judgment).

    It’s interesting to me that you’re railing on the extreme (baby mama) on the bottom, then pick the “cutting line” for tax increases and say “why should those people [living pretty damn comfortable lives] help take care of the rif raff?”. Yet, we’re talking about (in general) the “fat cats” that are essentially abusing the populace and living in ways you can’t even imagine (think $3 million toilet, like Oprah bought). THOSE people will STILL live in ways you can’t imagine, and will never miss that extra 4% increase in their taxes (and if they DO notice, I’m sure not going to cry for them having to buy a $35 million jet instead of a $40 million).

    “Another is the plumber who makes over 250k in revenue only to spend over 150k on skilled worker salaries w/ benefits and the cost of utilities and supplies. Joe the plumber made a good concern present in a world where small business is becoming scarce. I would like to see Obama crunch numbers with Joe to see where he stands financially in his first month.”

    again, you don’t do your own taxes (if you do, I suggest you find an accountant to look over your books, you have a lot of money coming back). 250k in revenue – 150k in expenses leaves 100k in profit. That doesn’t move up tax brackets.

    And small business is becoming scarce because the right-wing keeps giving billions and billions in tax breaks to companies making record profits.. like the $4 BILLION to Exxon that McInsane wants to give. And Obama’s plan gives you $200 more in cuts (at $70k base salary a year) than McInsane’s and does NOT give Exxon a $4 billion handout.

    Go look at http://www.washingtonpost.com/wp-dyn/content/story/2008/06/09/ST2008060900950.html to see where the cuts/increases lie.

    The American Dream was never meant to be something that lets one person live like a king while forcing thousands to live in poverty. The system has been gamed for a LONG time, and it’s time to make sure the greedy stop abusing the laws and lawmakers to make sure they can steal the country’s wealth for themselves.

    And JS, Diane, if I was understanding her right, meant that “we’ll bury that money so you don’t show _any_ profit, so you don’t pay _any_ tax”. The only time you want to show profits is if you’re going to go public. On paper, you want $0 in profits so you pay no taxes, unless you want to convince people to give you free money.. or as it’s commonly called in today’s smoke and mirror casino, “investing”.

  21. Nick, if you really are a pharmacist, you need to step away from that Schedule II cabinet before posting… or doing your taxes. Or breeding.

  22. I guess the “left” is just tired of people spewing bullshit as gospel and saying it’s ok because they are on the “right”.

    Cliche is right, that’s what our nation has become. Mostly because it’s a way to live without thinking, which is good for business.

    Looks like I was right about Nick not having his own business, but I was in error for not having better reading comprehension and noting he said “wanting to have”. Yet, that’s another “Joe the Plumber without a license” here, making unfounded claims about tax law that they have never seen or used and simply railing against the “raise taxes! EVIL! DEVIL! KILL HIM!” mindset. Is THAT cliche, jeff?

  23. jeff,

    that was not mean spirited, that was just funny. And she’s just pointing out the obvious – the guy’s full of sh*t making up a story about a poor small business guy getting screwed by Obama when he clearly is not a real businessman any more that Joe the plumber.

  24. You know what else is cliche? Focusing on mean-spirited responses from anybody and generalizing them as “typical” of the “left” or “right.” Let us polite, rational people just ignore those folks, shall we?

    The facts of this case are rather simple: NOBODY will pay more income tax under Obama’s plan UNLESS they take home over $250,000 per year. That’s take-home profit, NET revenue, after all business expenses, capital improvements, and even loan interest have been deducted.

    This doesn’t preclude the idea that raising taxes on these folks is a bad idea, which is an economic theory I can respect even though I may disagree with it. However, it does pretty much disprove that Obama’s tax plan will raise income taxes on “Joe the Plumber” or any TRUE small business, which has become the thrust of the McCain campaign.

    (How many true “small business” owners take home $250,000 profit in one year? And if they do, how many jobs are honestly going to be cut by such small business owners — already quite successful, to the tune of $250,000 individual profit in one year — because of a 3% marginal tax increase on profit over $250,000? I think we’ve been hearing about this long enough that ONE example would have presented itself… instead, all we have seen, and all that the McCain campaign has latched on to, is people confusing profit and gross revenue. A tricky distinction for many, and an honest, understandable mistake, but personally I think the McCain campaign knowingly exploiting this confusion is pretty low. “Politics as usual” some will surely say, but I don’t know… this strikes me as particularly egregious.)

  25. Thank you, Andrew, for getting it. And Spycake is precisely correct – my personal meanspiritedness has nothing to do with politics right, left or center. It is natural, intrinsic to my character and springs to life in the presence of irrationality, certain types of bigotry, and utterly fatuous belief systems.

    And sloppy syntax. “Cliche” is a noun; “cliched” is the adjective or subject complement.

    Bitches.

  26. “But when I breed I can afford my children…”

    And since you don’t own your own business, nor can you be assured that your job will remain in a volatile market.. What happens when you lose your job? Can you “afford” your children then? for how long?

    Say you lose your job because you refuse to provide birth control pills to “baby mama” because it’s against your “values” (we’ll not even talk about the MASSIVE hypocrisy of telling someone to stop having kids, but denying them a socially and morally acceptable means to do that). It becomes well publicized, and your unemployment runs into the very long term. You take that job at McDonalds, because, as your party is fond of saying, “you do what ever it takes”. That second party time job selling shoes at the mall has become very stressful, and even with both of those jobs, you’re only clearing $25,000 a year. Can you STILL afford those kids you could so easily afford on $70,000 a year?

    I know, I know.. “it can never happen to you”, right?

  27. spycake said: “How many true “small business” owners take home $250,000 profit in one year? And if they do, how many jobs are honestly going to be cut by such small business owners”

    Senator Obama wants to raise taxes on people making more than 250K a year. Two-thirds of the $700+ billion of income from small businesses in 2006 was reported by households making $250,000 per year or more. Thus, raising taxes on 250K plus people effectively raises taxes on 2/3 of small businesses.

    If you raise taxes on small businesses, then either they hire less people (meaning you do more work), they lessen benefits, or they fire you.

    This also decreases growth in companies. A 50% tax rate will decrease a business’s likelihood of growing. The ones who do grow will evade taxes with creative book-keeping, or by incorporating overseas.

  28. Responder, you’re data is incorrect. Here’s the latest available from the IRS website (2005 data, unfortunately):

    Total number of sole proprietorships, S corporations, and partnerships: 28 million
    Total number of “high income” (> $200,000 NET income) individual tax returns with income from a sole proprietorship, S corporations, or partnerships (assuming no overlap): 2 million.
    MAXIMUM percentage of “small businesses” that will be affected by Obama’s individual high income tax increase: 7.0%

    And again, that assumes no overlap between high income households who are both in a sole proprietorship and an S corp or a partnership.

    Sources:
    http://www.irs.gov/pub/irs-soi/05sp01br.xls
    http://www.irs.gov/pub/irs-soi/05in01ar.xls
    http://www.irs.gov/pub/irs-soi/05co1120sfigd.xls
    http://www.irs.gov/pub/irs-soi/05pa01.xls

  29. Thanks Brian:

    Responder, you’ve made a logical error. If it’s true that 2/3 of small business tax revenue was reported by households earning $250,000 or more, that would not translate to 2/3 of all small businesses. All that means is that many small businesses are barely profitable and, so, pay very few taxes. A very few small businesses are quite profitable and pay many more taxes.

  30. Thanks for the clarification, Spycake, but I got it the first time. That’s why I went on to meanspiritedly mock your syntax and thread-monitoring. See?

    I yam what I yam.

  31. “This also decreases growth in companies. A 50% tax rate will decrease a business’s likelihood of growing. The ones who do grow will evade taxes with creative book-keeping, or by incorporating overseas.”

    First, it’s a 4% increase to just under 40%, and that’s on PROFITS. I’ve never understood how taxing profits (post-expense left over money) hurts a business since the business had already paid it’s employees from its gross receipts.

    As far as “creative accounting”, that’s called being dishonest. And yes, MANY “business owners” do just such things. Hence, the need for oversight, right? And a need to tighten up the tax code to shut down all of those loopholes that were INTENTIONALLY put in there by PRO-BUSINESS lawmakers who were simply earning their perk money.

    And incorporate offshore? You DO realize we control that, too.. right? Simply tax the shit out of their business instead of giving them tax breaks to encourage “free trade”. …. free trade is the lie that allows the richest 1% to keep fleecing the country.

    We can fix all of the concerns of the right-wing with respect to letting businesses flourish if the actual intent is to be reasonable. Unfortunately, that’s not the right-wing agenda. The idea for them is to make it possible for the precious few to control everything. What do you think corruption is all about?

  32. I’ve noticed with all the back and forth about numbers and Section Cs and whatnot, still nobody points out the obvious fact that “These people worked for their money, and it’s not right to take it away to give to people who aren’t working for theirs.”

    It’s a sad day when people who spent their entire lives building what they have are vilified because of the hard work they’ve accomplished. I used to want to work hard and move up the ranks, but I’m starting to think it’s much easier to stay on the bottom and be fed.

    I’m curious, if the government suddenly took stock of ALL the money in the system and ALL the people, and just gave everyone exactly the same amount (which is what this is, on a smaller scale), what are you left with? Why strive to innovate, invent, achieve, and push harder than “what’s necessary”, when all you have to do is let someone else do it? And, eventually, there won’t be anymore “someone else’s”.

    What’s the end goal here? What’s really fair?

  33. “These people worked for their money, and it’s not right to take it away to give to people who aren’t working for theirs.”

    First off, those inheriting billion dollar estates didn’t work a damn day in their lives towards those billions. Secondly, those making millions a year aren’t “working” that hard, and the board members that can have “4, 5, or 6 or more” “jobs” at a time (sitting on various boards) clearly aren’t working that hard either.

    You’re trying to make a black and white argument out of something with millions of shades of gray.

    “It’s a sad day when people who spent their entire lives building what they have are vilified because of the hard work they’ve accomplished.”

    no one is vilifying anyone. There’s a simple understanding of the fact that the rules are set up by the rich to allow the VERY unfair advantages in a lot of cases. It creates environments where the masses have no chance because the deck is stacked against them. We’re also looking at the FACT that there are a finite set of resources in the world, that means the “wealth” MUST be “spread around” via SOME mechanism, otherwise you have what we do today.. 10% of the population controlling 90% of all of the wealth. That leaves 90% of the population fighting over 10% of the scraps. … ever see two dogs fighting over a bone? are YOU gonna stick your hand in there and take it? ..if you were starving to death you’d kind of have to.

    “I used to want to work hard and move up the ranks, but I’m starting to think it’s much easier to stay on the bottom and be fed.”

    Then you’ve clearly never been “on the bottom”. Violence daily, hunger, disease, frustration, crime, death.. I’ve lived “on the bottom”, and I busted my ass to get out. I have one thing over the masses.. I’m a damn lot smarter. That means that MOST people “stuck on the bottom” don’t have a lot of choice, nor do they have a lot of options. Again, 90% of the people fighting over 10% of the wealth. Do the math. You work hard to have it MUCH better than being on the bottom, and that means SOMEONE has to be on the “bottom”. We can take some of the locked up wealth on the TOP, from those that tend to play a rigged game and live like kings, and lift up the whole bottom to a place that isn’t so rife with suffering… and the TOP can STILL live like kings, just not quite as over the top. …. seriously, does ANYONE need a $3,000,000 toilet?

    “and just gave everyone exactly the same amount (which is what this is, on a smaller scale),”

    Again you show either your dishonesty or ignorance. Lifting up the bottom while barely lowering the top is nothing like “giving everyone the same amount”. Get real.

    “Why strive to innovate, invent, achieve, and push harder than “what’s necessary”, when all you have to do is let someone else do it?”

    You apparently don’t understand the idea of self actualization. That’s what humans do when they are freed from the basics of living, when they don’t have to fight like wild dogs just to survive. You’re providing a lot of “what ifs”, but they aren’t based in reality. But that’s ok, I’ve come to expect nothing less from the “why should I care about anyone but me” crowd.

    “What’s the end goal here? What’s really fair?”

    To have a society where suffering isn’t mandated so the very few can have more than they could EVER spend or need or make use of. It’s not “fair” that human beings are being killed in the name of corporate profits. It’s not “fair” that one person can have access to the kind of money that allows them to drink a million dollar bottle of wine while hundreds of thousands of their countrymen are left to starve.

    If people would stop being petty and greedy and selfish, we have enough resources for the entire country to be ‘comfortable’ and STILL have an “upper class” that can lavish luxuries on themselves.

  34. Oh please. Top marginal tax rates in the US have been much, much higher than 39.6% in the past, and that was during boom times when the US economy grew to be by far the largest in the world. I have done executive compensation design since the 80s, and I never once noticed any executive saying, “Don’t pay me more! My marginal tax bracket will increase!”

    How silly.

  35. No, I’m still not getting it. People are working so other people don’t have to. I guess I’m just ignorant, but it’s been a long-standing ideal that if you want something you do what it takes to get it. People leave the ghetto every day, I’m not stopping them, some random CEO isn’t stopping them. GIVING them money, that’ll stop them. Consider for a moment how long the US has had welfare, how well has it worked? According to you people, the same evil scum shitting on people from the top of their golden skyscrapers are still doing it.

    When will it be enough? How is Obama’s tax plan going to give us economic nirvana? I’ll admit that I don’t think there’s any “perfect” economic system, but I’ll err on the side that lets me keep the most amount of the money that I worked to earn. Call me selfish, you don’t know anything about my charitable efforts. I want to decide who I help, I don’t need yet another person from “up on high (kind of like your evil CEOs)” deciding how much to take, and who gets, my money. I’m pretty capable of thinking for myself, and quite frankly, it pisses me off that someone can come along and tell me how stupid I am and that I should just work so they can spend my money for me.

  36. The Criminal, be my guest, err on the side of “keeping the most that you make for yourself.”

    But first, you are required to give up that which is provided to you by the government. No driving on our roads, no calling the police when you want them, no calling the fire department, no drinking the water, no using the court system, no protection by the military, no social security, no regulation of your health insurance company, no protection from the USDA for your food, no protection from the EPA, or the CDC against communicable diseases, or the FDIC against your bank going under, no protection against lead in your children’ toys, no accounting or reporting regulations on the companies on the stock market, (good luck knowing what companies to invest in) all this and much more for the little amount of money you pay in taxes. Oh, and before you forgo all those things and return to a self-sufficient state of nature, you are required to pay back your and your family’s portion of the national debt, the greatest portion of which was created under Republican presidents. If you are married and have a kid, that will be $102,000 please. Pay up before you leave.

    It sickens me to think that during World War II, millions of drafted Americans gave up their FREEDOM and their LIVES to support the country that they love, while, today, sloppy, soft American won’t support their country, the best damn country in the world, by paying a little more in taxes. Americans don’t deserve America.

  37. Thanks to all of you who’ve come out on this thread to talk about how evil it is that the government redistributes your wealth…you crack me up. You’re quibbling over a few percentage points and suggesting that only the Democrats redistribute the money you worked so hard to earn. You pulled yourself up by your own bootstraps for this?

    I agree that straight welfare is a disincentive to work and be productive, but leaving large segments of society to flounder only drags everyone down. So maybe instead of bitching about how bad the current system is, you should all present plans for improving the system. And bootstrapping isn’t a plan because it’s bullshit. You didn’t do it; nobody does. If you got an education that allowed you to succeed it was because there was money to educate you and that money comes from society as a whole. I have no children, but i pay property taxes so that other people’s children can get an education. Sure, i could use that money for myself, but then i’d be surrounded by a nation of fools and knaves far worse than this one.

    And how come none of you bitch about how the government redistributes your hard earned wealth to an army of bureaucrats inside the DoD and the DHS. What this country pays out in “welfare” is a pittance compared to what it pays out to be prepared for wars against imaginary enemies. Ike needed 300 generals to prosecute the European theater of WWII; your hard earned tax dollars support more than 3000 generals who, until 2001, had nothing to do except collect a paycheck…that’s welfare. (and most of them still don’t actually do anything except shuffle paper around)

    If you want to bring down big government, start with where it is really big and really useless and then we’ll talk. Until then you’re just garbling your message by speaking out of both sides of your mouth simultaneously.

    Finally, hit yourself over the head with a 2×4 until you understand that our current “conservative” administration has made up for “low taxes” by borrowing money that will have to be repaid – plus interest – by taxes in the future. The DoD is already paying $140B/year just to service its debt. Those are your hard earned tax dollars, no? To where are they being redistributed?

  38. TehCrim:

    The “welfare” you’re talking about is mostly a myth and always has been. Even aid to families with dependent children (AFDC), the most commonly castigated form of welfare, was never designed to pay deadbeats not to work, but to keep children eating and sheltered. And it hasn’t always worked, as you know, because some parents use up all the money for themselves. And it was never much money to begin with.

    Other forms of welfare included SS payments to the disabled (extremely hard to get, those who get it have paid into the system, and it’s also not a lot of money); SS retirement payments, Medicare, Medicaid, and unemployment benefits. Except for Medicaid, which allows the poorest families to sometimes get medical care, the others are paid into during one’s lifetime by either the individual or the individual’s employer.

    Obama’s plan has nothing to do with welfare, by the way. He’s proposing increasing the tax $36 on every $1,000 over a taxable income (that’s after deductions) of $250,000 per family. The money won’t go to AFDC.

    The fact is, we have a nearly $500 billion ANNUAL deficit. We can’t decrease spending substantially without decreasing spending on the military, SS, or Medicare. Those are the big pots. That’s where the money is. The rest is pennies. If we don’t decrease spending in those areas, we have to increase revenues. That means increasing taxes. The idea that we can decrease taxes and increase tax revenues was always voodoo economics. There is a Laffer Curve, of course, but we appear to be well below it.

    In essence, people who object to taxes, ANY taxes, are saying they want America to become a second-rate economic entity, at best. Whether they know it or not, they want the US to borrow itself into oblivion. At that point, we won’t have to make a decision about reducing spending on the military, SS, and Medicare. The decision will be made for us.

  39. I had a very long dissertation started.. I give up. If you can’t understand the premise that an advanced society shouldn’t have people dying of curable diseases, dying of malnutrition, abandon by the economic engine, then I doubt I can do anything to change your mind.

    Cognitive Dissonance. You were told a long time ago that “those dirty poor people are just lazy, if they would only work hard they would be fine”. You can’t see the universal truths that undermine that false premise, and cognitive dissonance keeps you from even trying to get it.

    How do you suggest we get the locked up wealth spread around the society? or do you not understand the principle of finite resources/wealth/energy?

  40. I had a very long dissertation started… I give up. If you can’t understand the premise that an advanced society shouldn’t have people dying of curable diseases, dying of malnutrition, abandoned by the economic engine, then I doubt I can do anything to change your mind.

    You’re right. You can’t. And no matter how often you come to that realization, it still sucks.

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