Earlier today, I wrote about why the Obama effort to raise income taxes on small businesses makes no sense for the country. The roughly 10% increase in income tax rates for those earning over $200,000 will surely suck capital needed for the expansion of small businesses out of the economy. The end result will be less investment, less growth, and fewer jobs. Everyone also needs to be aware that Obamacare has already increased the taxes on this group substantially. Starting with 2013, the medicare tax on income above $200,000 is going up by about 30%. Also starting with 2013, the tax paid on investment income for folks earning more than $200,000 will rise when a new additional tax of 3.8% is added. Obviously, each of these taxes only apply to part of the income reported by these individuals. The fact, however, is that there will already be a substantial tax increase for small businesses starting in January. Adding yet another rise on top of this -- like Obama is now proposing -- would just make a bad situation worse.
These tax increases are wholly above the extra costs that Obamacare puts on employers with regard to health insurance. Add those in and the loss of capital for investment just gets even worse. It won't stop all investment, but the lack of capital will stop a goodly percentage of the total. So, with an economy that is barely limping along, Obama wants to put another burden on the private sector. Obama's plan will force us into another recession. Too bad he does not understand this. We need a president who knows how the economy works. Having an amateur in charge has been a disaster.
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