Who needs a $250,000 income per year? President Obama says rich people need to share the wealth! As a businessman, I can tell you from first hand experience why he is dead wrong.
Most small businesses are Sub S, or LLC companies, in legal terms or IRS rules. Company profits are added to the owner's personal salary in calculating income taxes due by the owner. For example let's say the owner had a $50,000 salary and his company earned a $350,000 profit before tax so he has a total income of $400,000 for the year.
This puts this businessman in President Obama's proposed highest income tax bracket, and after adding State income tax, this businessman could owe nearly 50 percent or $200,000 in taxes. This leaves only a profit of $150,000. It would not be uncommon for a business like this to have $2,000,000 or more of debt, which would require most of the remaining $150,000 of after tax profit to service the debt, leaving nothing to grow the business and thereby create jobs. Debt has to be paid from company profits after the income tax due is paid.
I was in business during the Carter Administration; the highest income tax rate at the time was 70 percent. President Carter's policies caused high inflation, high taxes, almost killed many companies including mine. The prime interest rate climbed to 18 percent, my company was paying as much as 23 percent on funds barrowed for inventory, etc. Fortunately, the American voters woke up and thanks to President Reagan I was able to recover. I am afraid if President Obama is reelected he may destroy the whole country and leave our children and grandchildren with a huge debt, high taxes, high interest rates, terrible inflation, wiping out retired peoples savings, and destroy the job creators.
To get this economy going we need to do everything possible to help job creators, reduce the size of government, cut all the redundant and unnecessary government regulations. Our tax system needs to be changed to either the Fair Tax or the Flat Tax. It only hurts our economy to tax business profits. A businessman looks at taxes as a cost of doing business and it is all added into the prices that we pay at the pump or in the store. Small businesses are the nation's job creators; don't forget that at the polls this fall.
Aug. 14 is primary Election Day; please vote for Dave Collins for State Representative, he understands how to create jobs.
Richard L. Bogaard