Evan Bayh on why the well-to-do need tax breaks...

[Kurt_and_Hunter]

When asked whether he agreed that only 3% of small business owners would benefit from keeping the over $250K tax cut Evan Bayh replied, "But that 3% makes most of the hiring decisions."

Okay... but if they are real businesses (as opossed to solo day-traders with their whole family on a bogus payroll) they do not make any hiring decisions based on personal marginal tax rates.

Let's say I own a small business.

I clear over $250K/year... that is my take from the business. Pure profit after all salaries, rent, expenses, materials, advertising, junkets to Tahiti, etc..

Okay. So the question arises, "Does my business need to hire an additional employee?"

In Evan Bayh's world I make this decision based on my personal after-tax income.

What the fucking fuck? Nobody does that. Nobody in the world. What employees are paid out of after-tax personal income? The business deducts all employment costs... employment costs are paid out of pre-tax business revenue.

Here is the actual business view of business:

I am going to clear $300K this year from my small business. Should I hire another employee at $35K/year?

a) If that hiring decision will return MORE than $35K to my company then I should hire the person.

b) If that hiring decision will return LESS than $35K to my company then I should NOT hire the person.

This is business. Employees are not consumables, they are a means to making money. Hiring an employee does not "cost" a business anything because the employee is worth more than the cost of her compensation. Unless it is an unwise hire. When small businesses have to let someone go it is because the business is not making enough money. First, it's odd that a small business that is not making enough money manages to pay the owner over $250K/year. Second, do we have some reason to suppose that tax cuts on personal income cause the largest small-business owners to hire or retain unprofitable employees as an act of charity?

Here is how it works in Evan Bayh's world:

I am going to clear $300K this year from my small business. Should I hire another employee at $35K/year?

Well, that depends on my personal income. Let's see how much money I have after taxes and if I'm feeling flush I will hire somebody for the Hell of it because I'm so rich... even if that decision will lose money for my business.

On the other hand, if taxes on my personal income go up by $5,000 then obviously my business will not hire needed employees that would cause my business to make me more profits... because I hate money or something.

Evan Bayh, you fucking idiot... in the largest 3% of small businesses the employees are paid by businesses, not business owners. And businesses hire people based on whether they need to hire people in order to make more money, not based on how much money the owner can afford to blow on un-needed employees.

The pro-business community is, in my experience, marked by a singular incomprehension of basic principles of business. Are they that dumb, or just working an unstated agenda? (Probably a mix of the two. There are "useful idiots" in every movement.)

[Guy Whitey Corngood]

1. He's such a useless tool. nt

[Nite Owl]

2. Bayh is leaving the Senate

and about to make big bucks and that is what he is thinking about. Even Bayh thinks about Evan Bayh.

[onehandle]

3. Go start your lobbyist career already. nt

[DefenseLawyer]

4. They always have to pivot to "small business"

because they think they can convince everyone that they are just one "pet rock" away from the big time. Your analysis is right on the money. That's the way I've run my business for all these years anyway.

[still_one]

5. It will be sooooo nice when he is out of office /nt

[Jokerman]

8. And replaced by a republican?

Bayh is a sellout, no doubt about that but there's a very good chance that his seat will be occupied by Dan Coats next term.

Bayh's final insult to hoosier democrats was to announce his resignation after the primary deadline and hand-pick his successor, leaving us stuck with a conservative dem who doesn't inspire anyone.

[Dr.Phool]

16. I always thought he was Republican.

He always acted like one anyway.

[still_one]

17. Unfortunately in this case, and for the reason you stated, bayh is WORSE than a repuke

[Roland99]

6. Great way to get it across clearly!

[Kurt_and_Hunter]

13. Thank You

:hi:

[kentuck]

7. He's a fake Democrat.

He is as Republican as they get. It's good that he is leaving.

[DefenseLawyer]

11. He's just fake. Period.

being from Indiana, I know people that know him pretty well. Most people will tell you that he just isn't all that bright and has no real philosophy beyond being in politics and raising money.

[LittleGirl]

12. clinging to the coats from dear ole Dad...

(Birch) I'll never forgive him for dropping his "I'm not running news" less than 48 hrs before the filing cutoff. He's a quitter, just like Palin.

Littlegirl in Indy

[ladjf]

9. Will he ever shut the Hell up? nt

[neverforget]

10. He just wants to keep his tax cut. Leave the poor man alone. It's tough

being wealthy don't you know? Why the poor have it so easy trying to make payments on all their possessions. But the rich, they don't know what possession or stock to buy! See? It's so much harder being rich.

just in case :sarcasm:

[COLGATE4]

14. Fuck Evan Bayh - and the horse he rode in on. That is all. n/t

[spanone]

15. a bayh quote is like a popcorn fart

[Kurt_and_Hunter]

18. ...

[Kurt_and_Hunter]

21. ...

[PBS Poll-435]

19. Household Employees. Sch H nt

[Kurt_and_Hunter]

20. I considered mentioning this but the OP was too long already...

Someone drawing a large salary from a company may decide, based on disposable income, to personally hire or not hire someone as a household employee.

But that doesn't relate to the Evan Bayh question, which is about hiring by small businesses with owners clearing over $250K income.

(If you are deducting your au pair's salary on a schedule C you probably need to be audited.)

Well-to-do persons having more disposable income may create a job at a jewelry store if they blow the tax cut on jewelry. It may create a construction job if a tax cut induces some folks to build an addition on their house.

Tax cuts for the rich have a pitifully small stimulative effect, but there is some stimulative effect. And a stimulative effect does create some job somewhere.

The one kind of job a personal income tax cut is least likely to create is a job at the small business the person receiving the personal income tax cut owns (!) which is the one kind of job these a-holes claim it does create.