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Perspectives: Obamacare, “cap and trade” July 28, 2009

Posted by vsap in Blogroll.
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What does Obamacare mean in the real world? From the Washington (DC) Business Journal, July 27 (bold is mine):

“A proposed surcharge on high-income Americans to help fund an overhaul of the health care system could hit one-third of small businesses that employ 20 to 250 workers, according to the National Federation of Independent Business.

The House Ways and Means Committee approved an income tax surcharge on individuals with incomes of more than $280,000 as part of its health care legislation.

The surcharge, which would kick in at $350,000 for households, starts at 1 percent and rises to 5.4 percent for households with income of more than $1 million.

The surcharge’s effect on small businesses has become a major issue in the health care debate. Most small businesses are sole proprietorships, S corporations or other entities where profits flow through to their individual owners for income tax purposes.

Republicans quickly labeled the surcharge a tax on small businesses, while House Democratic leaders countered that it would not apply to 96 percent of small businesses.

Overall, about 600,000 individuals with small business income could be hit with the surcharge. Those business owners may be a small percentage of the small business community, but they are the ones who tend to put their money back into their businesses and create jobs, surcharge critics contend.

Based on a survey of small business owners in December 2007, NFIB estimates that one-third of companies with 20 to 250 employees could face the surcharge. Businesses of this size create about 33 million jobs a year, according to the Census Bureau…

Manufacturers would be hit particularly hard by the surcharge. Nearly 70 percent of manufacturers pay taxes at the individual rate, according to the National Association of Manufacturers. Taxable income at small and medium manufacturers averages around $570,000, the association states.”

Arthur Laffer, deemed guru of supply-side economics, had this to say in a recent Q&A with the Houston Business Journal (bold is mine):

“The founder and CEO of Nashville economic research and consulting firm Laffer Associates, sat down for an interview with the Houston Business Journal before the event.

Q In Houston, the proposed cap and trade legislation related to climate change is a hot topic considering the city’s dependence on the energy industry. What’s your assessment of the impact of such a policy, given what we’ve seen on the direction it’s taking?

A Cap and trade is nothing but a huge tax increase. It’s like increasing the federal income tax by more than 50 percent. I’d say it’s not only bad for the energy industry but it’s an economy killer.

A long time ago, (former vice president) Al Gore proposed his own carbon tax. He always recommended that to do a carbon tax, you offset it 100 percent with income tax or payroll tax. He wanted to see less carbon used but wanted to see the economy be healthy.

All (the current legislation) does is raise revenue to pay for other programs put in by this administration and doesn’t make sense, except for the aggrandizement of government.

Q I would think you aren’t a big fan of the stimulus package either.

A Have you ever heard of a poor person spending himself into prosperity? It’s true that a person who receives the stimulus will spend more to buy things he wouldn’t normally have purchased and that, in turn, would create jobs for people producing the things he’s buying that they normally wouldn’t have produced. But for every stimulus recipient there’s a stimulus payer. The people who pay the money are therefore de-stimulated, so the net effect is zero. If you tax the people who work and pay people who don’t work, don’t be surprised if you find more people not working.

The administration has already said the economy is in worse shape than they imagined, and I think the more the stimulus program takes effect, the worse the economy will be.”

Yes, there is legitimate concern with PresBO and the direction he wants to “lead” this nation in. I hope the health care issue will be his “Waterloo”, as Sen. DeMint described last week. That way, this will be his only term and he can follow Jimmy Carter into early retirement.

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Comments»

1. maxey - December 4, 2009

The stimulus plan within the structure of NSP gives states,local goverments and opportunity to address the core community. One of the benmefits is to move small business into the mainstream when proposals are generated by the state for road construction, safety highway programs. home maintenace, through weatherizations programs blight contol programs. Small businesses contracts with these projects by linking with DBE’s disadvantage business enterprises money that are provided by government . Most small businesses are disadvantage ! and they can use stimulus money to increase their business by developing training prograns for the unemployed, help homeowners maintain their property and other projects within their business scope. Take advantage of these opportunities, be innovative, work with local goverments, complete date research on various stimulus programs”get involved” Involment in these stimulus initiavites can make the difference to many family’ businesses that are struggling!!.My question! how can we reject stimulus money’s when the programs directely challenges the individuals with small business
to become larger business creating a work place for the unemployed who would circulate money in the community in which they could meet basic needs and beyond for their stability.Above all the business owner would be prosperous, familly’s would becom stable and community’s overall would become stable “America communities would be prosperous.


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