Sunday, October 12, 2008

Can you afford 50% tax?

Hey I'm still new at blogging so scroll to bottom and click ontaxman to listen to song while reading. :)

Well lets see; Obama says he will not increase taxes on families under 250,000, but some of his proponents have said it is 227,000 . Okay so which is it?

This week he wants to cut taxes TEMPORARILY, for Small Biz. Just a 5 months ago, he wanted to raise taxes up to 50.3% on businesses that are sole proprietorship. Of course this week he wants to be like Bill Clinton. One can only hope.

I'm kind of confused on where he stands but mostly it will be a 40% tax rate for sure. I guess in his mind that is a CUT because although it is higher than it is now, it is less than what he originally wanted? who know?

He further confuses me by saying this on his website
"Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s. Obama will ask the wealthiest 2% of families to give back a portion of the taxes they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility. But no family will pay higher tax rates than they would have paid in the 1990s."
One can only hope because in the 90's I was so broke and actually only paid 10%. 4 kids etc well this would be great..... I'll work my butt off make a million and only get taxed at my 90's rate? And since when did I receive taxes?????? his plan doesn't sound "fair" to me.

One note here: Our biz is sole proprietorship and makes far less than 250,000 (but we are growing) and have been working hard so that we can be successful... when we do, we have tons of debt to repay. That means, not only will we be paying interest, BUT we will be taxed on the debt incurred earlier.

and if you die its even more expensive ...... Here are some highlights.
  • Restore 36 and 39.6 percent income tax rates.
  • Restore personal exemption and Pease phaseouts for households making more then $250,000 and increase the threshold.
  • Make permanent the estate tax with $3.5 million exemption ( that won't last) at 45 percent rate.
  • Impose additional tax of 2-4 percent on families making $250,000 for social security/payroll.
He also has a couple good thing: invest in company up to 50K results in 20% tax credit. Right now we have that in the form of depreciating assets. I'll let the number crunchers figure it out but I always thought depreciating a laptop over years and years was stupid!

Of course coming up with 50K (like is that his fav number?)for investment can be difficult without credit. He wants to make sure that all have access to private health insurance regardless of preexisting conditions= good idea.

to recap:
40% for us work at homers and then another 2-4% for soc. sec .
Further many dem's want a 50.3% tax rate heck that so only another 10% and heck if people vote in both democratic congress and democratic president - they just might get their way!

I want to mention here that in most families I know of sole proprietors, BOTH PEOPLE are working and sometimes the kids too are chipping in. Most are working long long hours. And could be making more working separately at jobs with benefits matching 401 contributions, partial health insurance payments and best of all paid days off .

Be careful what you wish for when you wish for change - I think these are some changes that will kill the economy. What do you think?

WANT TO SEE Some of the Changes?

One thing straight from Obama's site.
Eliminate capital gains taxes for small businesses, cut corporate taxes for firms that invest and create jobs in the United States, and provide tax credits to reduce the cost of health care and to reward investments in innovation. UH DUH small biz does NOT pay capital gains now

Now if you want to judge for yourself just click the title and it will take you to an article that outlines both tax plans and what they mean..


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