Doc's Talk: Taxes and small business

Thursday, October 09, 2008

Taxes and small business

GS Don Morris, Ph.D.

Facts:

1. Small businesses in America are responsible for the most job creation here in the USA
2. Most small businesses do not make the $250,000 threshold set by Obama’s tax plan on business. They make less than this amount each year. These types of businesses include home businesses, cosmetic sales, cleaning sales, dry cleaners, fast food street stands, lawn gardening and so many others. These businesses would not receive a tax increase.
3. However, the small businesses that meet and exceed this dollar threshold would see a substantial increase in their taxes under the Obama plan.
4. The small businesses that make more than $250,000 a year also are responsible for the creation of the most jobs in America.

Analysis:

I am a small business owner. Allow me to offer some observations based upon sound analysis. It costs money to operate any business. My overhead consists of the following:
· Monthly lease (rent) for my store
· Utility payments to operate the store, e.g., electricity
· Technology costs, e.g., computer, land line support
· Personnel, e.g., salaries, social security, benefits
· Our product costs, e.g., all products in our store
· Property and business taxes

These are common costs found among all small business owners. The preceding are fixed costs of doing business-I owe money every month on all of these items. My ability to make ends meet is generated by the number of my sales each month. When the cost of any of the preceding goes up, my ability to make any money is diminished.

This conceptually is the same thing that happens within all of our homes. Our homes are really “small businesses.” We all have fixed costs: rent/mortgage, utility, electronic, communication, food, clothing, taxes, transportation to name but a few. When any of these items increases our quality of life or even our ability to live is dramatically impacted. What do we do in times of economic challenge? We cut our expenses as best we can or we go out and look for more work or ways to increase our monthly income. Running a small business is the same as running a household.

Recently, where my store is located, the local authorities have indicated they want to increase taxes on our store, our sales and even upon our product line. In order to remain in business, I must examine my fixed costs and ask, “Where can I cut back and reduce my monthly costs? The answer is painfully clear: I must reduce my work force and lay off some of my workers. These are people with their own families, there own need for money-they have bills to pay and I must put them out of work. Now, multiply this by tens of thousands of small businesses across the USA and the results will be enormous. This will have the following impact on our entire economy:

· People without jobs cannot buy things as they do now
· Reduced employment means fewer people in tax brackets who actually pay taxes.
· Reduced tax payers reduces the revenue coming into local, state and federal agencies
· Within a matter of months and weeks in some states, e.g., California, existing programs and employment linked to these programs will be cut
· A domino effect will begin to occur as people will buy fewer products, reduce their service expenses, e.g., eating out once or more a week, going to a show. The tax base continues to shrink.

These are but a few of the outcomes we can anticipate-history proves the case being made. In times of economic downturn it makes no sense to increase the cost to a family or to a small business responsible for the creation of jobs. It is crucial to understand that economies world over experience ups and downs aka good and bad times. What we are going through is not new and we will get through it. Perhaps some of us have been spoiled and actually believed the economy would continue to grow as it has the last 18 years; yes, it has grown contrary to pundits and political parties operating out of their own agenda.

Does this mean there are some fundamental changes in order-of course, this is precisely what needs to happen and good people are working diligently to make sure this occurs. Again, in every economic crisis during the last 100 years in America, people in action created the change. Whining, complaining and blaming others have NEVER fixed a problem. Only people who focus on fixing a problem and then take the appropriate action behaviors transform a problem into a solution. I am pleased to say we, in America, are doing precisely this-yet, the whiners, complainers and blamers are receiving the most press-I wonder why? We know the answer don’t we?

As a family man, I ask that no one raise my taxes-I am not one of the 5-10 per centers. Belt tightening has been in place for some time. I realize it is my responsibility to “live within my means” even when I do not feel like it. This means saving money every month-I notice that we all adjust to the new threshold. Paying off all credit card balances each month and we do our best to no longer rely upon credit to buy products or services. We pay cash for larger items. For example, we want one of those new HD flat-screen televisions-rather than charging it we have established a flat screen savings account and by early next year, in time for the Super Bowl, we will have it! If we need to use credit, we do the research, secure the credit that is best for us and can afford! Individuals have to work in partnership with the organizations, agencies that contribute to all of our economic well- being.

To increase taxes on the very entity that provides us jobs, income and livelihood makes for great emotional speaking points BUT contradicts all economic common sense. Do you believe that you or any other family member in the work force today is motivated to improve his/her lot in life by working harder thus increasing his/her weekly salary only to have all of this hard work taxed away and given to local agencies, organizations and governments that do not use our money in any wise manner?

It is astounding, in today’s age of 24/7 information, how ignorant most of us are regarding taxes-myself included until I decided to get by the rhetoric of all parties. It is crucial to understand the facts and how they apply to our daily lives. Putting aside politics I discovered what do people think the rich pay in taxes:
· The IBD/TIPP poll found that 36 percent of those polled thought the rich contribute 10 percent or less of all federal income taxes.
· Another 15 percent thought the rich pay between 10 and 20 percent,
· While another 10 percent thought the rich's share is between 20 and 30 percent.
· In other words, most people thought the rich pay less -- far less -- than they actually do.
· Only 12 percent of those polled thought the rich pay more than 40 percent

Half of Americans believe, to this day, that the ”rich” pay little taxes-nothing could be farther from the truth. If you believe this no wonder you believe what some others are telling you about taxes. If you believe this false statement, no wonder you want to believe that a change in tax policy is fair. If by fair you mean that someone else, other than you, should shoulder the tax burden is “popularist” rhetoric and contrary to personal responsibility. What are the facts regarding the “rich”?
· The top 5 percent (those making more than $153,542 -- the group whose taxes Obama seeks to raise) pay 60 percent of all federal income taxes.
· The rich (aka the top 1 percent of income earners, those making more than $388,806 a year), according to the IRS, pay 40 percent of all federal income taxes.
· The top 1 percent's taxes comprise 17 percent of the federal government's revenue from all sources, including corporate taxes, excise taxes, social insurance and retirement receipts.

The common story line is “the rich can afford to pay these increase in taxes, so make them pay more”. The social and humanistic programs that so many Americans are the recipients of and employed by are funded by these taxes. To suggest that the “non-rich” are penalized is patently false, unfair and absurd at best. If you increase their taxes, less money over time will become available to fund these programs as I have previously discussed in this article. If you feel that it is a fairness issue, allow me to ask do you believe you are entitled to certain levels of money or do you believe it must be earned? Your response will explain much about who you are and what you value.

Rather than believe what some pundit or political talking head says about taxes seek out the facts. Listen carefully to each of the two parties positions regarding taxes and vote for the candidate of your choice.

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The IDF’s Minorities in Numbers and Pictures

In honor of IDF Diversity Week, we present diversity through numbers and pictures. Each year, more and more Muslims, Christians, Druze, Bedouin and immigrants from around the world take on the responsibility of defending Israel.

MUSLIMS:

Muslim Arab Israelis are not required to draft in the IDF, but there are many who volunteer. In 2013, there were over 200 Muslims serving in the IDF and over 300 in the reserves.

Bedouins:

Bedouins are nomadic Muslims who were in Israel when modern borders were set in place and are now considered Israeli citizens. They are not required to draft but a growing number choose to enlist. In 2012, there were over 1,400 Bedouin Muslim soldiers doing regular IDF service and almost 1,500 in the reserves.

Read more:http://www.idfblog.com/2014/02/27/truth-idf-numbers-pictures/#more-34027

Are you aware that in 2013, Middle class taxes go up-significantly?

In January of next year, the federal income tax rate for middle-class taxpayers is scheduled to rise from 25 percent to 28 percent, and the payroll tax is scheduled to rise from 13.3 percent to 15.3 percent… This drives the marginal tax rate based on the aforementioned three taxes to 48.12 percent. Add in state and local property, corporate, excise, and other state and local taxes, and the percentage of each additional dollar that is taxed hovers around 50 percent… When half of each additional dollar earned is taxed away, taxpayers experience a disincentive to start businesses or expand existing ones. This leads to fewer jobs being created.

Why is HAMAS Inside Tampa Schools?

Clare Lopez

Kelly Miliziano, who teaches history classes at Steinbrenner High School in the Tampa, Florida area apparently thinks it’s perfectly OK to invite a senior official of a HAMAS-affiliated organization into her classroom to discuss Islam with her students. According to local media reports, not only has this been going on for years, but in spite of the civil and criminal proceedings that could result from such reckless negligence, the Hillsborough County school superintendent, Mary Ellen Elia, and the chairman of the school board, Candy Olson, also expressed approval for students under their responsibility to be exposed repeatedly to guest speaker, Hassan Shibly, who is the Executive Director for the Council on American-Islamic Relations (CAIR) in the Tampa area.
More...

Did You Know... Ignoring the Call to Islam will Bring Jihad

‘Conquest through Da’wa [proselytizing] that is what we hope for. We will conquer Europe, we will conquer America! Not through sword but through Da’wa.’
-- Yousef al-Qaradawi , Muslim Brotherhood spiritual leader The Arabic word ‘Da’wa’ means the “call to Islam.” But do not think that Da’wa is the same thing as an invitation to an optional holiday event. The classical Islamic doctrine of jihad mandates that enemies must be given the opportunity to convert to Islam or pay the jizya tax before it is permissible to attack them.
Clare M. Lopez

Who is being discriminated-facts tell the truth

Religious bias

Hate crimes motivated by religious bias accounted for 1,409 offenses reported by law enforcement. A breakdown of the bias motivation of religious-bias offenses showed:

65.4 percent were anti-Jewish.
13.2 percent were anti-Islamic.
9.5 percent were anti-other religion, i.e., those not specified.
4.3 percent were anti-Catholic.
3.8 percent were anti-multiple religions, group.
3.3 percent were anti-Protestant.
0.5 percent were anti-Atheism/Agnosticism/etc.

http://www.fbi.gov/about-us/cjis/ucr/hate-crime/2010/narratives/hate-crime-2010-incidents-and-offenses.

On March 31, 1977, the Dutch newspaper Trouw published an interview

with PLO executive committee member Zahir Muhsein. Here's what he said:

"The Palestinian people does not exist. The creation of a Palestinian state is only a means for continuing our struggle against the state of Israel for our Arab unity. In reality today there is no difference between Jordanians, Palestinians, Syrians and Lebanese. Only for political and tactical reasons do we speak today about the existence of a Palestinian people, since Arab national interests demand that we posit the existence of a distinct "Palestinian people" to oppose Zionism.

For tactical reasons, Jordan, which is a sovereign state with defined borders, cannot raise claims to Haifa and Jaffa, while as a Palestinian, I can undoubtedly demand Haifa, Jaffa, Beer-Sheva and Jerusalem. However, the moment we reclaim our right to all of Palestine, we will not wait even a minute to unite Palestine and Jordan."

In March 1977, Zahir Muhsein, a PLO executive, said:

"The Palestinian people does not exist. The creation of a Palestinian state is only a means for continuing our struggle against the state of Israel for our Arab unity. In reality today there is no difference between Jordanians, Palestinians, Syrians and Lebanese. Only for political and tactical reasons do we speak today about the existence of a Palestinian people, since Arab national interests demand that we posit the existence of a distinct Palestinian people to oppose Zionism."

"For tactical reasons, Jordan, which is a sovereign state with defined borders, cannot raise claims to Haifa and Jaffa, while as a Palestinian, I can undoubtedly demand Haifa, Jaffa, Beer-Sheva and Jerusalem. However, the moment we reclaim our right to all of Palestine, we will not wait even a minute to unite Palestine and Jordan."

The Arab Apartheid

Ben-Dror Yemini
In 1948, the Arab countries refused to accept the UN partition proposal and they launched a war of annihilation against the State of Israel which had barely been established. All precedents in this matter showed that the party that starts the war - and with a declaration of annihilation, yet - pays a price for it. Between 550,000 and 710,000 Arabs fled because of the war and a larger number of 850,000 Jews were expelled or fled from Arab countries (the "Jewish nakba").
Population exchanges and expulsions were the norm at that time, occurring in dozens of other conflict points and affecting about 52 million people. In all the population exchange precedents that occurred during or at the end of an armed conflict, there was no return of refugees to the previous region, which had turned into a new national state.
Only the Arab states acted completely differently from the rest of the world. Instead of assimilating the refugees, they crushed them despite the fact that they were their coreligionists and members of the Arab nation - instituting a regime of apartheid. So the "nakba" was not caused by the actual dispossession, which had also been experienced by tens of millions of others. The "nakba" is the story of the apartheid, oppression, abuse and denial of rights suffered by the Arab refugees at the hands of the Arab countries. (Maariv)

International Law and Military Operations in Practice - Col. Richard Kemp

"Islamist fighting groups study the international laws of armed conflict carefully and they understand it well. They know that a British or Israeli commander and his men are bound by international law and the rules of engagement that flow from it. They then do their utmost to exploit what they view as one of their enemy's main weaknesses. Their very modus operandi is built on the correct assumption that Western armies will normally abide by the rules, while these insurgents employ a deliberate policy of operating consistently outside international law. "

Lost Historical Moments

What Rabin’s last Knesset speech really said:repudiation of a Palestinian state

Rabin ruled out a fully sovereign Palestinian state :

“We view the permanent solution in the framework of State of Israel which will include most of the area of the Land of Israel as it was under the rule of the British Mandate, and alongside it a Palestinian entity which will be a home to most of the Palestinian residents living in the Gaza Strip and the West Bank. We would like this to be an entity which is less than a state, and which will independently run the lives of the Palestinians under its authority.”

Rabin ruled out a total withdrawal from Judea and Samaria and thus a return to the pre-June 1967 borders :

“The borders of the State of Israel, during the permanent solution, will be beyond the lines which existed before the Six Day War. We will not return to the 4 June 1967 lines.”

Rabin ruled out withdrawing form the Jordan Valley:

“The security border of the State of Israel will be located in the Jordan Valley, in the broadest meaning of that term.”

Rabin ruled out uprooting settlement blocs, like the Gush Katif bloc in Gaza (which was subsequently uprooted by former Prime Minister Ariel Sharon):

“The establishment of blocs of settlements in Judea and Samaria, like the one in Gush Katif.

AND

Rabin ruled out removing any settlement before coming to a full peace agreement with the Palestinians:

“I want to remind you: we committed ourselves, that is, we came to an agreement, and committed ourselves before the Knesset, not to uproot a single settlement in the framework of the interim agreement, and not to hinder building for natural growth.”

Rabin insisted on Israel retaining full security control of the borders with Egypt and Jordan, contrary to Israel’s relinquishment of the Philadelphia Corridor on the border with Egypt:

“The responsibility for external security along the borders with Egypt and Jordan, as well as control over the airspace above all of the territories and Gaza Strip maritime zone, remains in our hands.”

Correcting Oslo Myths-Part 2

3) Kuttab laments that the post-1993 Oslo process resulted in a Palestinian Authority "whose ministers and legislators are not guaranteed passage between Gaza and the West Bank ...."

Before free passage or other perquisites, PA leaders were obligated, among other things, to eliminate the terrorist infrastructure in the West Bank and Gaza Strip, end anti-Israeli, antisemitic incitement in schools, mosques, and communications media, and resolve all outstanding issues through peaceful negotiations. They met none of these commitments, sometimes bolstering terrorism and greatly increasing incitement.

4) Kuttab complains that under Oslo the PA got "lightly armed police ---- but no real sovereignty over the land or contiguity between our communities in Gaza and the West Bank."

Oslo agreements repeatedly were revised, regardless of Palestinian non-compliance, until the authorized number of police grew from 8,000 to 40,000. Though they were to be the only armed forces in the territories, Israeli estimates early in the second intifada put the number of gunmen - police, "security services," terrorists, and armed gangs - at 85,000. Their armament reportedly included not only heavy machine guns and rocket-propelled grenades, but also anti-tank and anti-aircraft missiles.

Sovereignty was to be negotiated in the envisioned 1998 "final status" talks - after a five-year period of confidence-building. Palestinian leadership chronically undermined the process. Palestinian terrorism made the 1993 - 1998 Oslo period more deadly for Israelis than the 15 years preceding it.

The United States doesn't have contiguity between the lower 48 states and Alaska and Hawaii; territorial contiguity between the West Bank and Gaza Strip - that is, through the 20 miles of Israeli territory between them - was never promised and would destroy Israeli contiguity.

5) "Palestinians have been made to endure hundreds of checkpoints in the West Bank, an eight-foot wall deep in our territories, and tight Israeli control over borders."

The security barrier is not "deep in Palestinian territories," but rather encompasses less than 8 percent of Judea and Samaria, and is mostly a fence, rarely a wall; the land in question is not "our [Palestinian] territories" but disputed territory to which, according to the authors of U.N. Security Council Resolution 242, Jews as well as Arabs have claims; and there are no international borders, only the 1949 armistice lines with Jordan. Under 242, borders remain to be negotiated. As for checkpoints - like the security barrier and "tight Israeli control" - Palestinian Arabs precipitated these measures themselves. No terrorism and there would be no fence or tight Israeli control and few checkpoints - like before the first intifada.

Correcting Some Oslo Myths

1) In Oslo "Israeli, Palestinian and other world leaders promised that ... Palestinian sovereignty would be solidified."

No, they didn't. The 1993 Declaration of Principles and subsequent Oslo agreements outlined a process by which final status negotiations about the West Bank and Gaza Strip would be reached. The process required an end to anti-Israel terrorism and incitement and a commitment to peaceful negotiations. The PA, Fatah, Hamas, Islamic Jihad, the Popular Front for the Liberation of Palestine, and other terrorist groups, sabotaged the process from the start.

2) "The reality is that, in defiance of U.N. Security Council Resolution 242, which states that it is inadmissible to occupy land by force, Palestinian territories are still under foreign military occupation."
Wrong again. Resolution 242 (1967) does note "the inadmissibility of the acquisition of territory by war." It also affirms the right of every state in the area "to live in peace with secure and recognized boundaries free from threats or acts of force." There were no "Palestinian territories." Jordan occupied the West Bank, Egypt controlled Gaza. Israel did not have "secure and recognized boundaries," so retention of some of those territories was possible under 242. Israel is not a "foreign" military occupier in the West Bank but, pending final negotiations, the lawful military administrator as a result of a successful war of self-defense.

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