PoliCHARTZ - Thread of U.S. Politics & the Presidential Election

[Aiemond]

halogamer1989 said:

Final-Fan said:

halogamer1989 said:
I'M BAAA-AAAKKK!!!! BTW, thanks Montana, I appreciate it. Notwithstanding my McCain support and the way I have tried to present facts (hey that whole bit with the contributions in italics was straight off one of my emails from the HQ staffers) I am now going to at least try to say one thing more if I can. Bear with me on this one.

Obama always likes to say that he will cut the capital gains tax on small businesses. It is one of his best selling points in his economic plan. One prob though. Businesses DO NOT pay capital gains--they pay income taxes which are different. People should pay attention and read between the lines.

BTW, for my other posts: I am not racist and I do not condone it. In addition, I take offense to the notion that all GOP members are racist Southerners with little education and are mostly old. There are tens of millions of Young YRs (myself one of them).

I've heard people say that Obama's tax hike on very high personal incomes will hurt small businesses that choose to file as individuals. Perhaps it is these small businesses that he is referring to? Just speculating here but that would seem to make sense.

Obviously not all Republicans are old racist Southern hicks, but I believe it's a statistical fact that younger people tend to be more liberal and older people tend to be more conservative. And the South is a well-known Republican stronghold. (...although Obama is looking like he has a chance to crack it...)

You hit the nail on the head final. What is sad, though, is that he continues to twist small businesses with HOPE and CHANGE with c.g. tax reduction promises when that is not what they pay! In fact he will increase the taxes on small biz's.

 

 

No one said you were a racist. I just think you are wrong. I used to be a young republican myself in HS (hardcore too) and a couple years in college, and voted bush for bush in '04. But, these last four years have shown me how the party is changing and its not for the better. I was not happy before 04, but felt that bush was better than Kerry. Anyways, on the tax issue. Small business can pay capital gains in some instances. Second, prove to me that small busniess will be paying more. Give me evidence. Because I am going to show you how it is not true. First off, the most common argument is "Well, income is not profit. he may make 500k but only 50k is profit!" This is flat out wrong. Small business is not taxed on income. It can be if the owner takes no care into how he runs his busness though. But then again, normal people can pay more in taxes if they don't pay attention as well. Here are how small busniess is taxed.

 

from
http://www.nolo.com/article.cfm/objectId/FE1875A0-239D-48E5-B7D2565E0CB62159/catID/3FED35C1-7BBA-4468-901354F101CBEBE2/111/182/147/ART/

"You'll be taxed on all profits of the business -- that's total income minus expenses -- regardless of how much money you actually withdraw from the business. In other words, even if you leave money in the company's bank account at the end of the year (for instance, to cover future expenses or expand the business), you must pay taxes on that money.

You can deduct your business expenses just like any other business. You are allowed to expense (deduct) much of the money you spend in pursuit of profit, including operating expenses, product and advertising costs, travel expenses, and some of the cost of business-related meals and entertainment. You can also write off certain start-up costs and the cost of business equipment and other assets you purchase for your business."

Also, (http://www.nolo.com/article.cfm/objectID/B407A867-3EE5-410F-8718C78B2EF698D6/111/277/235/ART/)

"How tax savvy a businessperson you are has a great effect on how much money is in your pocket at the end of the year. You probably know that the tax code allows you to deduct costs of doing business from your gross income. What you are left with is your net business profit. This is the amount that gets taxed."

 

also,

"Internal Revenue Code § 162. 'Trade or business expenses.'

"(a) In general. There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including

"(1) a reasonable allowance for salaries or other compensation for personal services actually rendered;

"(2) traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business; and

"(3) rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity."

"
this from the tax code.

 

So what we learn from this is that everything that is not profit can be deducted, thus lowering the income of the individual to profit only. THIS is what he will be taxed on and THIS is the bracket he will be in (combine with any other types of income of course, such as gambling income, if he has second job, etc, but this would be the same with or without obama). Anyone counting business income as personal income is INSANE because THEY are liable in all cases. This means if they get sued they are PERSONALLY responsible. By making it an llc or sole proprietership only the business section can be liable and personal finances cannot be taken by a plantiff.

 

Now, what the advantages of Obama's plan? First, the making work pay break that helps mitigate the employer tax. Second, you have increased funding for incubator. Read this site to see what incubators are: http://www.smallbusinessnotes.com/starting/busincubation.html

 

The advantages of incubators are basically that you have help from EXPERIENCED small business investors. They are popular and have a significant effect on starup success.

 

This is why, imo, the small business plan of obama is superior.