This is an open letter to peddlers of disinformation regarding what ending irresponsible tax cuts truly mean. If you are interested in the perspective of a successful entrepreneur in (hopefully) plain English about how the rhetoric seems so backward and amazingly hard to swallow then follow me below the fold.
I know, it's the same for everyone here. It's been hard to watch the proceedings of the past several years with everyone around losing jobs, homes, security, etc. The odd part for myself is that on the face of it - no - not on the face of it, on the fact of it, I have been blessed with the right combination of luck and ideas that I have been successful enough to have made my way ever so slightly for each of the past 3 years into the tax bracket which would be impacted if the taxes return to previous levels and I would be more than happy to pay the tax on any profit over $250k in the hopes that the country could get its feet back straight.
This is a simple statement because I AM the premise of the rethug lie machine and I can tell you it's a bunch of bullshit.
So, for quick explanation I own a technology business, I busted my butt from bootstraps. After years of working a good corporate job in my field I had an idea and I chose to be that entrepreneur that they talk about. It took some years but I had a product I believed in. I scraped pretty hard for the first year and went through the fits and fears of entrepreneurial life. I gave up on fun for a while and buried myself in the work along with my business partner until things started rolling. We've had 3 great years with various pieces of luck and so I have been just on the border of that $250K line - lucky, blessed and extremely sad that the prosperity we have had during this time is a complete anomaly.
I needed to say that piece because here are some things I KNOW. First off this idea that the tax hit on small businesses is a burden is a load of crap. How is it that no one manages to jump up and say "The tax is ONLY on PROFIT!!!!!!" - that means you only get taxed if you as a person walk away from the year with $250K more than you put into the business for the year. If you own the biz yourself then that means that maybe you sold $500K to the customer and it cost you $250k to do it. If you have a business partner then it's double - the business made $500K in PROFIT before you get this tax.
So - here's a talking point - if you don't walk away with $250k in your personal pocket - no matter how much product you sell - you won't pay more taxes. If you are lucky enough to make $250k the return to the higher tax rate means a measly extra $3000 per every 100k past 250k. I hold that anyone who can't get by and accept that amount on top of what is already a ton of cash needs to re-evaluate because they are living life the wrong way. Period.
By contrast, if you spend the money your company brings in on making that company bigger then you don't pay those taxes. So for example - let's say I am looking at my end of the year and I am saying "Ok, if I put those profits in my pocket this year I will pay tax on them, but, if there is something I can do to make my company even more money next year but I invest into the company this year, then I kill 2 birds - I grow my company and I don't pay taxes. So, let's look at this situation and say - hey - I am forecasting $350K in profit - that means extra tax on $100k. Hm, why not buy extra raw material up front and then save the taxes. Next year I can hire another person, bring in more money and I didn't pay the tax on the PROFIT I took home.
Am I the only person who sees this? The tax is NOT on the money you put into the business - it's 100% opposite - it's a tax on money you DONT put into the business. I just can't see how the threat of taxes would cause business owners to actually spend more on business and then grow the economy – am I just missing it?
Now let's talk a little bit about how entrepreneurs operate in the real world. First and foremost, when talking heads and other media morons nod their heads when rethugs talking about entrepreneurs not starting their business because of the fear of taxes on great profits I want to smack them. One thing about every entrepreneur who has EVER jumped into it is unmovable faith in their own product. The winners and the losers alike - they all start with a plan that they expect will make them money. The last thing that they are EVER concerned about is "Gee - I'm not sure I want to start to pay taxes when I start making massive amounts of cash". It's BULLSHIT. Can someone PLEASE bring this up in talking points? Please?????
Also, real entrepreneurs - real "boot-strappers" don't come to the table with fist fulls of cash. If they borrow it, they borrow it from either friends and family - who - almost certainly - are not thinking "Wow - maybe I won't give this person cash because if my investment starts to make me $250K then I will pay some extra taxes is on" so - count that out from stopping the entrepreneur. Or else, the entrepreneur borrows it from really, really rich people who, again - just aren't going to stop trying to make money because the taxes on the profit that they might make will go up.
So - the smoke, the mirrors, the snow job, the con-job and the willingness for everyone to go along with it.
Like we know here but with some real examples to think about. The ONLY use for the extension of the country-killing tax cuts is so that really rich people who do nothing useful with their money can have more of it and buy yachts and mistresses. Don't let anyone ever say anything otherwise.