Freshman Dems oppose Pelosi’s tax increase

[Freddie Stubbs]

Source: The Hill

Twenty-one freshman Democratic House members have signed a letter opposing their leadership's plan to raise taxes to finance a healthcare overhaul.

Rep. Jared Polis (D-Colo.) circulated the letter, saying that the income surtax on the wealthy would place an undue burden on small businesses, some of which pay taxes in the same way as an individual. The letter had 22 signers, all freshmen except for Rep. Paul Hodes (D-N.H.), who is in his second term.

“Especially in a recession, we need to make sure not to kill the goose that will lay the golden eggs of our recovery,” the letter said. “We are concerned that this will discourage entrepreneurial activity.”

Polis voted against the plan at the Education and Labor Committee markup Friday as a protest against the tax. But the letter itself did not threaten that its signers would vote against the bill. Instead, it asks for a different source of money to be found, and says more cost savings should be found so that less money is needed.

Read more: http://thehill.com/leading-the-news/freshman-dems-oppose-pelosis-tax-increase-2009-07-17.html

[WriteDown]

1. This is a bad bill all around.

Use the Swedish model and trash this.

[taught_me_patience]

2. Jared Polis is a complete idiot

How many small busineses NET over 1MM/year? Most Americans are probably too stupid to even understand this outright lie.

[WriteDown]

3. If it was 1M there would be less of a problem...

The penalties start at 250K.

[taught_me_patience]

16. You're right

But I'd bet that 95% of small businesses NET less than 250k too.

[Telly Savalas]

17. Normally all caps bug me.

But the fact that Congressional Democrats are willfully ignoring the fact that it's a tax of net income, not gross income, is obnoxious and disingenuous. A slight raise on the top marginal rate for the net income of small businesses will do nothing to impair their ability to operate.

[No Elephants]

18. They don't hit full level until $400K and there are tax credits to help offset.

But, I agree, this is not the way to go.

[Beavker]

7. I don't seem to have representation in Washington.

Bad enough, Ben the piece of shit Republican in Donkey's clothing is my Senator, but it appears that there is just a lot of sold out Dems. Nothing can change. Morals and Ethics are not worth as much as the Greenback in any deflationary period it seems.

[madeup64]

4. Good point

Also how many businesses that do make that much file as a sole proprietorship? I am assuming that is what Solis is referring to. I doubt to many. Most are LLC's or corporations I would assume.

Where is the talk about the money small business will save becuase they won't have the disadavantage that big business have when it comes to offering insurance? People will be able to move more freely from job to job withouth worrying if their is good insurance. Is there something I am missing why this isn't a Dem talking point?

[harmonicon]

14. because most dems don't want single-payer

that's why it's not a talking point. It makes me want to bang my head against the wall, but it's the truth.

[Veilex]

5. ummmm pardon me?

An increased tax on the wealthy? Hmmm lets analyze that...wealthy = people who already have gads of money who in no way have any fear of being in financial dire straights.

Increased tax = more money to assist in a program designed to assist non wealthy American people.

I may not agree 100% with the wording in the plan... but its time for the wealthy to come to the rescue of the rest of the country...its time for them to take one for the team. Otherwise the team might well cease to be... and then where would their profits be?

in other words:

Greater Share of Wealth = Greater Share of Responsibility!

Pass it on.

[liberalhistorian]

6. And yet, I'm sure most or all of them were all too eager

to accept the "public option" benefit of their own generous, extremely inexpensive health care plan paid for by US, the taxpayers, many of whom don't have the luxury of insurance or money to pay for health care. So, if they feel that strongly about it, then I suggest they give up their own fucking plan and save the taxpayer money. Yeah, right, like THAT will ever happen. I'm beginning to think we'll need to take Congress's health care plan away from them before we'll get any action on this at all. Then let THEM live in the real world and deal with what most of us little people, their constituents (at least, theoretically) have to deal with. See how long THEY could take it.

[Eric J in MN]

8. If a small business provides health insurance, then only if it has PROFITS over $280,000...

...would it have to pay more.

Profits, not gross revenue.

http://www.freep.com/article/20090715/NEWS15/90714099/House-Democrats-propose-surtax-on-rich-to-pay-for-health-care-

[Lydia Leftcoast]

9. Right: Republicans and "business-friendly" Democrats get a lot of mileage

out of the fact that most people who have never run a business believe erroneously that businesses and individuals are taxed in the same way.

Individuals are taxed on their incomes minus a few deductions. Businesses are taxed on their incomes minus all legitimate business expenses. While being a free-lancer has its downside, the tax advantages are an upside: I can deduct all sorts of things that I couldn't deduct as an employee.

[quaker bill]

10. The flaw is that taxes do not

"discourage entrepreneurial activity".

Put it this way. I have a business, and on the day it nets, after all expenses and current taxes are paid, $250,000, I will be taxed an additional $2,500 leaving me with an after tax income of $247,500. Now let's just say I have a notion of how to expand the business so that next year I will have a post current tax net of $1,000,000, under the bill my surtax will jump to 5.4 percent, which would leave with the paltry sum of $946,000 after the surtax.

Now I get to choose, stand pat and pay the lower rate with an income of 247,500, of grow the business and pay the higher rate to get an income of $946,000.

Regardless of what is done with taxes, it is virtually always arranged so that more money is more money. There is never a real disincentive to making more money.

Further, businesses do not hire people because of lower taxes. They hire people because they have sufficient profitable work for them to do, which always comes from demand for their products, not tax rates. Lower tax rates can improve profits, but virtually never justifies an increase in workforce. In business, altruism is very limited, particularly in employment.

[Big_Mike]

22. Ummm, no it doesn't. To be more accurate, and factually correct

adds an additional $2500 to the year's tax bill, for the individual or business at $250,000. So that tax will be 40.4%, or $101,000. On the $1M, the tax goes to 45%, or %450,000.

Here in California, the state income tax is 9.3% for incomes greater than around $50K up to $999,999. Over $1M, it goes to 10.3%.

So now, the individual, sole proprietor, LLC, or Sub-chapter S corporation at $250,000 goes to 49.9% goes to $124,750. For the $1M, the tax goes to $553,000.

I don't know any millionaires. But I do know guys with businesses making around $300K per year (construction industry with union employees, carpenters and electrical companies mostly). They work 70+ hours each week, damn near every week all year. Would they continue busting their asses with these taxes? I don't know, but they probably would. But would they seek to expand their businesses further and hire more workers? After hearing them talk, I doubt it.

[road2000]

11. Tax the lazy rich, not the true entrepreneurs.

They are two different types of animal. It would be fairest, imho, just to go back to the Eisenhower-era tax rates. There was no lack of small business then.

[Deep13]

13. tax trust funds nt

[No Elephants]

20. Rockefeller's are still going, totally tax free all this time. Sigh.

[Deep13]

12. We ought to raise taxes on principle, just because. nt

[No Elephants]

21. So, you want us to raise taxes on principal, on principle? I'll drink to that!

:toast:

[Kingofalldems]

15. Bad Things About Democrats--that would be a great title for your book

:shrug:

[No Elephants]

19. Go single payor and primary the Blue Dogs. I think they are talking about

Subchapter S corporations. Their income is not taxed at the corporate level, but is distributed to owners and taxed as individual income. It is a tax savings for small corporations because you don't pay tax twice. Your income ges treated as though you were an unincorporated partnership, yet you get the corporate protection from personal liabilty for business debts. business lawuits, etc.

A least, I assume that is what they are talking about.

It could be fixed by adding a change in the tax laws to take care of the stockholders of Subchapter S corporations, which I am sure has occurred to these stinkin' Blue Dogs. Instead, they are torpedoing the reform bill.

Unless Pelosi needs these votes, she should tell them to sit down and shut up.