Discussion:2009 / 2010 Taxes

• Raise the top bracket on the income tax back up to 40 percent from its current 35 percent. • Increase the Capital Gains Tax from its current 15 percent to 30 percent or, perhaps, eliminate it entirely and tax these gains as ordinary income (at 40 percent). • Double, triple or perhaps eliminate the ceiling on FICA taxes so that instead of taxing only the first $99,000 of income, the levy covers a much higher portion of earned income. • Repeal much of the rollback in estate taxes passed by Bush.

I wonder what other aspects of the current tax law that affect many of the small businesses are likely to sunset or be rolled back. The leading candidates are all lawyers. I bet none has done a tax return. They think someone who has an income of $200K is rich. A lawyer with $200K probably has disposable income close to that amount. A small businessman with $200K is probably cash poor if he had to purchase any capital equipment or increase inventory. And, we know who creates the jobs!

According to the 11/2/07 Kiplinger Tax Letter, one of the tax increases being considered is a SECA tax on shareholders of S firms and partnerships. It would add self employment tax to the share of company income derived from the owner. Sounds like this is what the IRS person in Seattle that Sea-Tax mentioned was talking about. Question is: If I put my husband (not a stockholder) on payroll for the computer consulting that he does, how much of the income generated by the bookkeeping company can be said to be related to him?

Not again taxes ... Oliver Holmes said it is the price of civilization. I am again dumb taxes that stifle innovation and productivity. I certainly believe that there are those that could pay a higher tax rate because most if of their income is disposable ... lawyers and even retirees :) Some point out that Clinton budget did not happen until there was a divided government. I am old enough to also remember the malaise of the Carter years with the high taxes.

There is an article in the NYT (http://www.nytimes.com/2007/05/13/business/yourmoney/13view.html?n=Top/Reference/Times%20Topics/Subjects/T/Taxation) that says economists say that tax cuts don't result in economic growth. Well, economists know nothing about taxes either ... I know ... I am one. I had to go back to classes after graduate work to understand the real world accounting and tax problems. I would be interested in knowing how many of your small clients ( Sch C, Partnerships, Subc S) that actually sell from inventory, make something or build something that have good incomes but cash flow problems? How important are the tax breaks to their purchasing more inventory, buying capital equipment, etc? (What does Sec 179 benefit you compared to depreciating that computer you are using over 5 yrs? By some of the posts, I think some of you are trying to use 5 yr old computers :)

Now to none tax issues …As far as the foreign adventure goes … history will have to judge. While my experience in the Middle East is somewhat limited, I believe that Syria and Iran keep Hezbollah and Hamas in check because of greater fear what Bush would do if they hit us. We could not conquer and occupy, but our black jets could drop a bomb on a speaker’s podium. I think if Barack Obama is elected, he will be tested by one of those countries just like JFK was with the Cuban Missile Crisis … which was almost WWIII . As to the “greedy defense contractors”. I would rather be in an Abrams M1 than a socialist T-80.

More seriously, I would be interested what the impact on taxes are to your small clients, they are the ones that create the jobs.

What happens when one of our clients overspends 1) bankruptcy, or 2) he gets a loan, or 3) he can try to raise revenue. Well, no one is going to want to loan (buy Treasuries) money to the U.S. in the future with so much red ink. The world is voting against the dollar as we speak. Do you propose we go bankrupt, or raise revenue? I feel sorry for any party, and any person, that follows this Administration into office; the choices are going to be tough. I agree with you: the impact will fall on the little guy (and gal). But, maybe they should pay more attention when they vote. There's no free lunch. Interesting discussion, and I like to hear all points made.

While I don't like red ink ... I don't think the situation is as bad as "bankruptcy." I would like a stronger dollar ... it was great traveling when $0.85 = 1 euro not so much fun now. However, it is a lot better for US exports ... the French Pres is talking trade wars because of the weak dollar. I will get concern about the Dollar when OPEC wants to be paid in Euro's. However, OPEC countries know we have a history of redeeming our debt and allowing foreign investment. I cannot think of a major European country that has not at one time nationalized industry and cancelled foreign debt. I am going to try and embed a chart If this doesn't work go to http://zfacts.com/p/318.html I would not trade this economy for the Nixon/Ford and Carter years.

As a side note, what do you think of the national health plans? I have vision of regulations written by the IRS and customer service administered by the post office or state DMV

However, in the 60s/70s/80s; just make that any year, I know of no one that has ever written a (separate) check to pay the national debt down. No one, that I know of, has ever said, hey our national debt went up this year, everyone send a national debt check to us in August, or more importantly, did you hear Carter/Clinton say, hey our national debt is down, a check is on the way to you by August.

In my rural America, people don't give a rat's asset about the national debt. If it takes 2 billion to prevent an IED from fragging dear old granny on her way to the Safeway, then so be it, because she deserves and has earned the protection.

The big hit to our economy will not be the increasing of the national debt, it will be when we quit spending billions overseas, and the IEDs come here. Unlike most of the European countries, The US can not be driven across in 3 or 4 hours. When the people of the US become too afraid to drive, too afraid to go on vacation, too afraid to go to the Safeway, then you will see what devastation to the economy is when people reduce their spending.

Spend a billion on the greedy, crooked defense contractors??? I say yes, besides, Clinton says she will have a special tax rate for corporations anyway.

When you said "healthy people", you identified the problem. We have a health crisis in this country … much of it is driven by obesity. My group, the retirees are the worse. They don’t have time to exercise, cannot walk a mile, but can make 5 trips to the buffet. I have never seen Michael Moore’s film, but have seen a few interviews. He is a poster child for what is wrong … looks like 300 lbs. I get a laugh out of him blaming the insurance industry. All he would need to do is take a few of his millions and start an insurance company. Not a lot of obstacles to entry in the business, basically handling transactions. I would not put my retirement funds into it …

Now back to taxes … maybe we solve the health problem with marginal tax based our weight … 10% over weight, 10% income tax, 100% over weight … 100%. Solve the deficit and health problem at once :) Well back to something more serious, looking for part time work for the tax season ... in a warm climate!

Snowbird 08:14, 13 November 2007 (CST)

Last yr on my 62nd birthday

http://www.bikeforums.net/showthread.php?t=233580

This year, no such luck, twisted my knee pulling carpet up from a motor home. Wish I could say it was rugby or something!

With the weather getting cold ... I got too much time on my hands ... otherwise why would I be writing insane things on these forums during the middle of the day!

Snowbird 12:59, 13 November 2007 (CST)