One argument raised in favor of cutting taxes for the wealthy is that you will lose your job if you don't!
On Snopes today, this missive is dissected. No one seems to know who wrote it, but I suspect it was sort of a put-up job. Frankly, if I worked for that asshole, I'd quit. I mean, what a pompous ass!
Not that I don't feel sympathy for employers. Yes, it is true that being an employer sucks. But the amount of taxes are not really the issue - it is the staggering paperwork and hassles needed to collect them. And yes, most employees don't realize that in order to get paid $10 an hour, an employer needs to cough up close to $15 an hour, what with payroll taxes, unemployment taxes, workman's comp, gross receipts taxes, accounting costs, and the like.
And since it is darn hard to fire anyone these days, hiring someone is not something anyone takes lightly anymore. So it is no surprise that most employers are reluctant to hire these days.
But the premise of the piece is that if the Bush Era tax cuts are allowed to lapse, the purported owner of this company will sell everything and move overseas is a bit overstated.
Most people don't understand marginal rates or whose taxes the Bush era tax cuts actually cut. And the reason for this is very simple - the actual numbers and data are rarely displayed, talked about, or shown.
1993 saw a tax hike on the wealthy (via two new brackets at the top), and then 2001 through 2003 saw a series of tax cuts (the so-called Bush tax cuts) that lowered the tax brackets as follows:
|1992|| 1993 - |
|2001||2002|| 2003 - |
| 2011 - |
| 2013 |
As you can see from this chart, the tax rates of the very top earners were sliced by 2%, from 38.6 to 35, and from 35 to 33.
Do you think your boss is going to close his business and "move overseas" over a 2% tax increase?
And again (and it is a shame I have to explain this) these taxes are levied on profit not on gross income. So the argument that a tax increase "leaves less money to hire new people!" is just bullshit - utter bullshit. Wages paid to employees are tax deductible.
And if you look at the income levels where these rates kick in, you can see that you have to be pretty well off before this 2% means anything. In fact, you have to be making well over $100,000 year before you see anything at all and over $380,000 a year before it makes a real difference.
Year 2011 income brackets and tax rates
|Marginal Tax Rate||Single||Married Filing Jointly or Qualified Widow(er)||Married Filing Separately||Head of Household|
|10%||$0 – $8,500||$0 – $17,000||$0 – $8,500||$0 – $12,150|
|15%||$8,501 – $34,500||$17,001 – $69,000||$8,501 – $34,500||$12,150 – $46,250|
|25%||$34,501 – $83,600||$69,001 – $139,350||$34,501 – $69,675||$46,251 – $119,400|
|28%||$83,601 – $174,400||$139,351 – $212,300||$69,676 – $106,150||$119,401 – $193,350|
|33%||$174,401 – $379,150||$212,301 – $379,150||$106,151 – $189,575||$193,351 – $379,150|
Yes, these truly are "tax cuts for the rich" no matter how you slice it. And yet, people in the 15% bracket are sold on the idea that somehow, they are making out on this deal. People making less than $69,000 a year, jointly, are in the majority. Their taxes were not cut one iota. And yet, these folks are more likely to vote Republican, so that their daughter won't get an abortion and their son won't get gay-married. People are idiots.
But, the question remains, are our tax rates an onerous burden on employers? Considering that a few decades ago, the top marginal rate was 70% (!!) and our economy still thrived, it is hard to believe that rates of 40% and less are onerous. And again, this is a tax on how much the employer takes home as income, not on the gross receipts of his business. If hiring an employee will create more profit for his company, a 2% increase on the taxes in the employer's take-home pay is irrelevant to that decision. You do not turn away profits because your personal taxes are increased. It is an argument that makes no sense at all.
And unfortunately, one side effect of this tax cut has been an increase in deficit spending, which has trickled down to the States in the form of unfunded mandates, which the States kick down to the Counties, which in turn crank your property taxes up. And what this means is, staggering increases in property taxes for homeowners. Death and taxes - unavoidable it seems.
Of course, Republicans say to "cut the budget" and get rid of all that "waste" like various government agencies. But as I noted before, these are trivial amounts of money compared to Defense, Social Security, Medicare, and Welfare. Guess which slice of the pie the GOP says is untouchable and which desperately needs to be cut? You don't need to be a rocket scientist to figure that out. But if you are a rocket scientist, your job is safe, if the GOP has its way (but don't count on collecting Social Security!).
Defense, Social Security, Medicare, and Welfare make up the four largest slices of the government spending pie.
Of course, the GOP is willing to cut defense spending - if that means cutting soldier's pay and benefits. But cut the a bloated high-tech weapons system? Not on your life, buddy! So you can see, that "balancing the budget" will be done on the backs of the poor and middle class, once again.
People are protesting that "the rich get richer and the poor are getting poorer" and that income disparity in the US is increasing. Part of that is due to the tax cuts for the very rich. And these tax cuts were voted for, by you, the American voter.
So, whose fault is it? And what are you going to do about it? Vote for Herman Cain? Nein! Nein! Nein!