My boss's boyfriend's employer is cutting jobs because of "Obamacare".

[gateley]

Is this valid?

She was also listening to Dave someobviouslyrightwingasshole who said that "you can go right to the IRS website and see that the vast majority of those earning over $1M annually are paying closer to 30% -- just a few thousand are like Romney only paying the capital gains tax of $15%". Is THIS valid?

I'm looking for rebuttal, here -- (at work now so can't go searching on my own)

Thanks!

[Capt. Obvious]

1. Because of Obamacare?

Which doesn't go into existence until 2014? Way to plan ahead.

Unless he/she just wants to strip health care from his pre-existing employees and kick their healthy 25 year old kids off of the existing plans.

[gateley]

7. He doesn't have health insurance -- it's the mandate to provide it that they say

they can't afford.

I couldn't remember when that goes into effect -- thanks!!

[Capt. Obvious]

8. So he's shrinking to avoid fed laws then

I'm sure his employees will leave of their own accord to a company that is then mandated to insure them.

[gateley]

11. He's planning on leaving anyway, but my real desire is to just subtly let my boss know that

she NEEDS TO VOTE FOR OBAMA.

As of now, she's leaning toward anti-Obama.

[Yo_Mama]

24. How many employees?

Edit to add:
If the restaurant has more than 50 full-time equivalent employees and did not offer insurance, it would be fined per employee that used the exchanges to get insurance. That's not until 2014.

One reason that a restaurant might fire employees would be to drop below the 50 FTE mark. I do know of some businesses that are dropping a few employees to get down below the mark. Some are combining duties and others are using contractors to provide those services. If you had 55 FTEs and did not offer insurance, the penalty would be $2,000 X 25, or $50,000.

Larger restaurants that are open longer hours often do go over the 50 FTE mark, so there is a high incentive to cut workers.

Of course, the major cost for most restaurants will be the menu labeling requirements. That is an added source of liability and costs, but I thought this mostly affected chains?

[gateley]

33. I'm not certain, but I don't think it's greater than 50 employees. And they're not

cutting jobs (as far as I know), just taking away what measly little perks and bonuses they currently offer.

But thanks for the explanation -- I'm sure the info will come in handy at some point!

[sinkingfeeling]

27. Does he have more than 50 employees? If not, he's blowing hot air.

[gateley]

34. Don't know, but I used that (thanks to you) in my rebuttal today. :-) nt

[warrior1]

2. what is the business?

[gateley]

9. A restaurant -- he doesn't get health care now, but they get

some little incentives which is what they're taking away from him and those employed in the same positions.

[Botany]

3. no point in answering this pack of bullshit

It is just right wing talking points that are not true.

[madokie]

28. Exactly, by giving an answer it will only legitimize the lie

A serious eyesroll would be sufficient without giving any ground I would think

[gateley]

35. I thought of your response today when she didn't answer my email or contact me

at all. I was VERY courteous and brief, but when no communication was forthcoming, realized it was falling on deaf ears.

[SmellyFeet]

4. I call BS on your boyfriend's employer.

They most likely are using it as an excuse to lay off some people and attack Obama at the same time.

Business owners care about one thing, and that is making money. There is zero reason that any employer could use right now to lay off someone because Obamacare.

[gateley]

14. They're not even laying him off. He doesn't have health care now,

but gets some little perks/incentives/bonuses along the way. They're halting all that -- and it really couldn't have added up to much anyway. Not nearly as much as insurance coverage. I agree -- they're using this as an excuse and it IS bullshit, which is why I came to you guys, knowing you'd help!

[patrice]

5. She thinks the published tax-rates, on the IRS website, are the rates rich people actually pay?

Apparently she has never heard of loopholes, write-offs, tax-shelters, tax attorneys, and the whole multi-million dollar industry of being sure that as many taxable entities as possible pay as low or zero taxes as possible.

[karynnj]

13. The average rate is lower than 30%

Last edited Mon Apr 23, 2012, 11:40 AM - Edit history (1)

Here is the best link I can find. Table 8 has the percent of AGI that is paid by income groups. In the text earlier it says that the top .1% includes people making over $1.4 million. Scroll down to Table 8 and you will see that on average this group paid 24.28%. There have been no major changes in the last two years that would greatly change this.

As this table has a long historical series, you can see lots of other things:

- the effect of the Bush tax cuts by income level
- the relative percent paid by the top group over the last several decades. (They only started looking at the top .1% in 2001.)
- notice that the average tax rate has fallen rather dramatically over the interval

http://www.taxfoundation.org/news/show/250.html

[patrice]

38. And top rates dropped 20% under Reagan alone.

[patrice]

41. Shouldn't they raise the bottom of the top income brackets to at least $1 million, or maybe $700K?

Isn't the bottom of the top brackets, at under $300K, too low?

[gateley]

36. I went to the IRS site today because of your response (the radio guy she heard said

"just look on the IRS website!" and that was indeed the published rates. You are so right that they most likely don't pay anywhere near that!

[JoePhilly]

6. Its probably BS ... there is an email going around that says something similar ...

In the email, the person says the employer has 17 employees, and he's going to fire some because of Obamacare.

The thing is, business's with fewer than 50 employees are exempt.

So that's one way to test the story.

The other point that others mentioned is that this part of the law has not gone into effect.

The 30% thing is also BS. A person making over a million a year have access to all kinds of tax breaks. Most folks who make that kind of money are usually able to DEFER salary, which can have some tax benefits (depends on how structured), stock options, and other "perks" which shift, delay, or reduce the taxes.

[Botany]

15. If you own a business you can cut your personal taxes by re-investing your income back into the biz

That cuts a person's personal taxes and builds their wealth at the same time too.

I smell right wing email/fox news/rush .... behind this "story."

[gateley]

37. The more I think about it, I think you're right in your assessment. nt

[gateley]

21. Ooooh -- that's a good one about the fewer than 50 employees --

and you're right on about the tax breaks that they can take advantage of.

[ProudToBeBlueInRhody]

10. Of course it's probably valid

There are a lot of right-wing assholes out there looking for excuses to fire people.

[Yo_Mama]

12. Yes, it is possible

Some of the ACA provisions are in effect now, and companies are beginning to plan for the 2014 date. It is 2012, after all.

Among the provisions in effect now are continuing coverage for kids (26) on their parent's policies. That is raising costs on some plans (kids with health problems are somewhat more likely to stay on their parents' plans longer). Also no coverage caps. That is raising costs on some plans.

But there are other aspects of the law that are causing some companies to make changes now. There is a cap to how much an employee can be charged for his/her premiums in relation to salary. For some companies with higher costs and a lot of lower paid employees, they will be fined even if they continue the grandfathered coverage, because they cannot meet that cost. The alternative is to raise the company's contributions for lower-paid employees, but that raises employment costs and therefore will cause some form of cost-cutting in the company.

As for the tax stats, you can look them up yourself here:
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html
Table 4A is the easiest one to use, and the latest currently available is 2008.

For incomes between 200 & 500K, the average MTI percentage was 24.8%.

For incomes between 500K and 1 million, the average MTI percentage was 30.3%
For incomes in the lower millions, the MTI percentage is in the 32% range.
For incomes in the 2-10 million zone, the MTI percentage goes up to the 33% range.
At the ten million break, the MTI percentage drops again to the 32% range. There are only about 400 tax returns in this range.

MTI is modified taxable income, which is AGI minus stuff like charitable deductions.

[gateley]

39. I think my boss's premiums went up (I don't have insurance) but initially she showed me a

letter from her insurance carrier about the "changes" -- pre-existing conditions, no max, etc., and she thought that was good. UNTIL her premiums went up.

Thanks so much for all the info!

[Ian David]

16. Another example of incompetent and selfish people blaming Obama for everything.

"I'm not laying you off because I'm a terrible boss. I'm laying you off because of ObamaCare. So, don't blame me. Blame Obama. And vote for Romney, who invented ObamaCare."

[Atman]

18. You're boyfriend's employer is already a Republican douche bag.

If not this, he'd find another way. A restaurant needs people to survive. People at the tables, people in the kitchen, people taking care of the customers. Eliminate any one of these crucial points, and your business is already f00ked. My guess is, things aren't going all that well anyway. Does he honestly think he'll get more business and increase profits -- or even hold the line -- if his service turns shitty, or he has to replace his chef with a short-order cook? Does he really think his dwindling customer base will suddenly GROW if he only cuts some of his staff? He's an idiot.

.

[Proud Liberal Dem]

23. Any employers whom honestly believe that

must be operating on the same kind of Republican principle that maintains that tax cuts on the wealthy generate more revenue. Come to think of it, considering how much Republicans profess to hate government revenue (taxes), one might wonder exactly why they would posit such an argument let alone make that a reason to support the tax cuts on the wealthy.

[unblock]

19. when people say "obamacare" in a context like this, they usually mean "the economy"

or actually, they mean "the state of my business", which they blame on "the state of the economy", which they blame on obama, and the only thing the know obama has done that could conceivably have an impact on anything is "obamacare".

ergo, all bad news gets blamed on obamacare.

probably has nothing whatsoever to do with the actual affordable care act.

[Yupster]

20. The very rich people put their investments in

tax free municipal bonds which of course are tax free.

So if you have lots of your income at 0 %, of course that's going to drive your overall tax rate down.

I haven't herard anyone say they want to eliminate tax free bonds though, so the 30 % thing has me completely baffled.

You can't believe in both municipal bonds and a 30 % overall rate.

[JHB]

30. Nothing to be baffled about...

...it comes straight from the OOTA database. (Out Of Their Ass)

[Yupster]

48. I don't get it?

Whose ass?

[JHB]

49. The people claiming the 30% rate while ignoring tax-free munis

[Yo_Mama]

22. Found a brief to explain some of the insurance issues

http://www.academyhealth.org/files/nhpc/2011/AH_2011AffordableCareReportFINAL3.pdf

[gateley]

40. And thanks again! nt

[obxhead]

25. It's possible, but the more likely scenario is actually hiring more people

and cutting everyone to less than 28 hours a week.

That's all if he does not currently offer health insurance. If HI is already part of his compensation packages I call BS on blaming the ACA for cuts in employees.

As for the IRS thing ask for the link to the IRS page that points it out. Chances are he's never even seen the link, just "heard about it" and is just repeating a talking point.

[JohnnyRingo]

26. My friend lost his job in 2008 because his employer "was afraid Obama would win the election".

...at least that's how he rationalizes losing his job during the Bush presidency.

It didn't have anything to do with a crashed economy, no sir, it was a pre-emptive move to prepare for the bad times ahead. Of course if that were true, his very wise employer had to send customers to the competition until the election.

I pulled a back muscle last week because of "Obamacare". I was mowing the lawn for the first time this year and twisted around to back up. If it wasn't for the government takeover of health care, that wouldn't have happened.

[gateley]

44. Wonder if that would have happened if the Dem coming into the WH was white. I doubt it. nt

[Evasporque]

29. No, he is cutting jobs so he can get a bonus this year.....nt

[EC]

31. I didn't look it up, but I thought

small businesses got subsidies to help pay for insurance?

Also on the 1% and tax rates. As I recall there are only 400 people in that tax bracket and they make their income on capital gains...therefore only paying 15% taxes on their income (of course there are write-offs too, lowering it even more). Romney plans on eliminating capital gains tax completely, meaning all those trust fund babies won't be paying any taxes, since most of their income is taxes on interest in their trust funds. Investors etc. like Romney won't pay any taxes either, since that's how they make their money. Their side says that investors won't invest if they are taxed higher...I say bull-shit...they invest to park their money someplace where it will make money, they'll keep investing.


On Edit: Oh, and I remember reading in the NYT that 40% of that 48% that pay no taxes at all....were from the top 5%, so it's not all the poor that aren't paying fed taxes. Of course there are also all the corps that aren't paying a dime and in fact are getting refunds.

[gateley]

42. I'd forgotten she said that 40-some percent of people didn't pay tax last year, and of course

it was assumed they were all poor people, living off the government.

[krispos42]

32. Who is going to pick up the slack of the fired employees?

If he was over-staffed, then he should have cut back way before this.

If he was under-staffed or appropriately-staffed, this will not endear him to his customers as it will make his service worse.

[gateley]

43. Not getting fired, just getting some bonuses and incentives taken away.

What a way to get loyalty and good performance from under-paid, non-insured hourly employees. Brilliant!

[krispos42]

50. you get what you pay for

Depressed, unhappy employees are not the path to competitiveness

[Odin2005]

45. That employer is a lying POS.

He's probably just looking for an excuse to screw over his workers.

[gateley]

46. And relishes blaming Obama. I think you're right. nt

[CreekDog]

47. the employer is lying

there is no cost to Obamacare at this point. to be cutting jobs now because of Obamacare is a lie.

i recommend you tell your friend to learn a little about Obamacare.

also, you have been here long enough to know yourself about Obamacare and to provide your friend some simple info about the law.

it doesn't sound like you are done with your homework.

[LiberalFighter]

51. Tell her that the average itemized deductions for those with over $200,000

of income is $64,000.

A single person had a total of $9500 of income that was not taxed in 2011. $3,700 personal exemption and $5,800 for the standard deduction.

A family of 4 with 2 of them being parents had a minimum total of $26,200 of income that was not taxed in 2011. Standard deduction is $11,400 a far cry from the $64,000 that the rich on average are able to claim.

Tell her also that someone with income that does not include dividends and capital gains over $379,150 does not pay 35% on all taxable income. Their taxable income is taxed at 6 different rates.

The first taxable $12,150 is taxed at 10% (The same for all married filing jointly)
The amt between $12,150 and $46,250 is taxed at 15% (The same all married filing jointly)
The amt between $46,250 and $119,400 is taxed at 25% (The same all married filing jointly)
The amt between $119,400 and $193,350 is taxed at 28% (The same all married filing jointly)
The amt between $193,350 and $379,150 is taxed at 33% (The same all married filing jointly)
The amt over $379,150 is taxed at 35%.

Single and Head of Household filers have the same tax rates but lower amounts taxed at higher rates.

[LiberalFighter]

52. More than likely jobs being cut because of two possible reasons

1) Not running the business very well and losing business.

2) There is more competition and losing business.

[bluestate10]

53. The Health Care Reform Act will make cost of insuring employees less expensive

for the employer. The bill sets up the framework for exchanges. My state has grown it's exchange over several years, it is the only state with flat health care costs. The objective is to bend the health care cost curve downward through the Health Care Exchange. The exchange alows consumers and small businesses to comparison shop health care plans and pick the best, most cost effective plan for their needs. My state is one of the healthiest in the country.

[gateley]

54. I finally got more info. They are "preemptively" cutting back hours to below 30,

so when Obama care DOES go into effect, they won't be required to provide health insurance. The belief is that they're doing it now so it won't be obvious at the time. They don't provide coverage now, and they're damned if they're going to because of that socialist President!