Taking Jobs
Tell me what the government doesn’t get when it comes to the new ‘stimulus’ plan. How about the fact that business owners that create the jobs and employ more than half of all Americans won’t be hiring anytime soon. That’s the reality of the market today.
Why should it be any different? The message coming from Washington is that my taxes will be going up sharply within the next two years. Right now, marginal tax rates for successful business owners are north of 50%…that includes federal, state, local, etc. That means if you are fortunate enough to build a successful business, more than half of your success goes to the government.
What’s being proposed is far more than the incremental 5% being discussed by the administration. It’s actually north of 7% when you consider the reduction in mortgage interest deductibility and the loss of other deductions…and that’s before they get around to messing with the issue of Social Security, which is sure to increase payroll taxes. For business owners, that tax amounts to more than 12% on the first 110k of profits. If they raise that cap, watch out. Marginal tax rates could see close to a 20% increase, driving overall marginal rates north of 70% for business owners.
And that’s the problem. You see, if I have to consider giving 70% of any new venture to the government to redistribute, I’d be better off ‘investing’ in CD’s. My return would be guaranteed and I wouldn’t have to worry about employees and the headaches of building and running a business…plus, I wouldn’t have to worry about losing my investment, a very real possibility in any new venture.
If people are truly interested in job creation or keeping their existing jobs, they should consider these facts. Most of the people in Washington have never created a thing or actually run a business, yet they are making policy to ‘create’ jobs?
