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View Diary: Boehner: 'Job creators in America are essentially on strike' (183 comments)

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  •  You aren't talking to a lot of business owners (6+ / 0-)

    I'm a partner in a law firm (i.e., a small business owner) and I can guarantee you that if we believed that the risk of hiring more people -- either more lawyers or non-lawyer staff -- would be justified by the additional revenue we hoped to generate, we would hire.  Regardless of politics.

    Hiring is a RISK for a small business.  Any small business makes hiring decisions on whether the potential reward is sufficient to justify the risk.   Demand figures into that equation, especially when we consider whether to hire new lawyers.  However, the cost of hiring, profit, the amount of money my partners are making and taking home also figure in there, especially when it comes to non-lawyer staff.  If we aren't making as much money -- or if taxes are eating up what we take home -- we are less likely to hire non-lawyer staff for the sake of saving us time and making it easier to simply practice law.  They are an expense to the business.  When you aren't taking home as much money, you cut business expenses and live with additional inconveniences at work.  If you don't project taking home as much money, you don't increase your business expenses.  

    •  But Taxes Have Gone Down (8+ / 0-)

      Obama cut taxes.  Bush cut taxes.  Why are taxes still "eating up" profits?  Federal taxes, at least, are as low as they've been in nearly a century.

      Now, are you going to say that it's regulation?  Obama is canceling hundreds of regulations.  

      •  Doesn't matter when they can really fuck us over (0+ / 0-)

        by electing Thugs who will zero out the rich's tax bill.  

        YayNew Aristocracy!  Eat the Middle class.  

        'Bout time their rug rats were made into something useful... like Soylent.  

        Grandma too.

      •  You are mistaken. (1+ / 0-)
        Recommended by:

        twenty-plus year lawyers often fall into that household (two income) AGI $250,000 and up category, especially if their spouse is also a twenty-plus year working professional.  (Say, a $150,000 a year, 20-year lawyer married to a $150,000 a year, 20-year CPA.)  

        Taxes are not "as low as they've been in nearly a century."  Take a look at the second chart here for effective federal individual income tax rates.  They are as low now as they've been since the early 80's.

        But here's what's more important.  We don't hire for the short term.  When we hire, that's a long-term commitment.  So we have to project where we will be.  For the last two years, since the 2008 election, Democrats have been pushing to raise taxes on this group.  That would put them back to the Clinton effective tax rates, which are the highest since the CBO began keeping score -- even higher than in 1979, when top marginal rates were 70%.  (I'm sure you know better than simply to point to top marginal rates as if that alone reflected what groups actually pay in federal income taxes.)  In fact, the effective tax rates may ultimately end up being higher than under Clinton, since a lot of deductions now phase out at certain income levels.  And, if more deductions are eliminated (as per the President's proposal this week) AND marginal rates go up, the actual taxes paid by this group (working professional couples) will be the highest ever since the CBO began keeping score in 1979.

        Remember, when we make a commitment to hire, we don't do it based on what we took home in the past.  We do it based on what we think WILL happen.  And a lot of my partners think that soon they will face a reduction in take home pay due to higher taxes.  When they are taking home noticeably less, then they are not as happy with the business taking on additional expenses to reduce what they get even further.  And that means that, if we can make do with fewer employees, we will.    

        Again, hiring lawyers is more driven by demand -- will we have the legal work necessary to make them profitable.  On the other hand, non-lawyer staff are often there so that lawyers don't have to spend time doing non-billable (non profit-making activities) that are necessary to a business.  If my partners are taking home a lot of money, the additional time becomes more valuable than the incremental increase in take-home pay.  They are happy with hiring more staff to make their jobs easier.   On the other hand, if they are taking home less, they want the business to spend less whenever possible, and that includes not hiring, or cutting back to 2 employees in an area where we used to have 3.  

        I know a lot of people will be saying, if you are talking about household income over $250,000, they don't care -- raise your taxes.  I'm only posting this to show you that all those things -- demand AND expenses (regulations generally increase expenses on a business) AND  tax rates on the business AND tax rates on the business owners) can affect hiring decisions.    

        •  at least you spoke up but (3+ / 0-)

          so your family is taking home $300K+ and complaining about taxes?  maybe you should live on my families income for awhile.  you'd have something else to complain about then, and it wouldn't be about taxes on people who can afford it.

        •  thanks for the enlightening post (0+ / 0-)

          But then, outside of lawyers, businesses hire for both the short term and long term. In fact, more for the short term, since fulfilling demand, maximizing sales/profits, and showing quarterly growth is far more critical to stockholders and investors.

          And inside of lawyers, it's too dark to see the tax code. ;)

          Will drag Obama to the left if we have to

          by athenap on Thu Sep 15, 2011 at 05:17:20 PM PDT

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    •  Taxes are lower now than they have been in (3+ / 0-)
      Recommended by:
      wu ming, Plox, createpeace

      many decades.

      •  Only since the 1980's. (0+ / 0-)

        Take a look at the second chart here.  

        What's more important is that the President is going to raise taxes on working professional couples back to the highest levels since the CBO began keeping track -- i.e., the Clinton levels.   The top 1% paid more in individual federal income taxes under Clinton than they did under Carter, when top marginal rates were 70%.  

        If the President eliminates deductions AND raises rates back to the Clinton levels (as is proposed) working professional couples will pay the highest federal individual income taxes that group has ever paid.  

        Hiring is not about where you've been, it's about where you think you will be in the next several years. See my post above.  

        •  who cares??? (1+ / 0-)
          Recommended by:

          you all can AFFORD it!  you should be happy that you have to pay more in taxes - that means your making more!

        •  If that is true, good !! It is time we raised (2+ / 0-)
          Recommended by:
          wsexson, Brooke In Seattle

          taxes on those who can afford it.  

        •  those charts only go back to the 80s (0+ / 0-)

          Kindof hard to take your historical only since the 80s claim seriously.  It is also curious that employer FICA taxes are considered employee income.

        •  2011 - 1980 = 31 years. 3 Decades = Many. nt (0+ / 0-)

          And by other measures (commonly used by Republicans and anti-tax groups), the average or effective rates on federal income tax for the wealthy (Top 1%) were much higher in the 80s.

          During Clinton's years, they peaked at 28.87%, but in 1980, the end of Carter's term, they were 34.47%.  

          And even from your source, corporate tax effective rates were much higher in 1979.  

          In addition, capital gains taxes, which disproportionately benefit the very wealthy, are much lower than they were in the 1990s, 1980s or 1970s.

          Someone in a very expensive suit is at the front door and says he wants to foreclose on our democracy. Where should I tell him he can put his robosigning pen?

          by Into The Woods on Thu Sep 15, 2011 at 03:25:44 PM PDT

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        •  That's the weirdest chart I've ever seen (0+ / 0-)

          So a millionaire who doesn't work but who just cashes in $500,000 of stock he's inherited, that had a cost basis of $600,000 is considered by their definitions to have an "income" of -$100,000 (their capital gain).  Any sales taxes he pays are considered negative rates since it's a positive number divided by a negative number.  So these guys actually would prefer to have "higher" (closer to zero tax rates)!

          A poor person who does work, is counted for not just the income he sees, but also for pre-deducted things like Medicare and SS, and also for his employer's share of these things, plus the employer's contributions to any health plan and unemployment insurance that they pay.  And if he gets extra assistance such as rent subsidies or food stamps, those are treated as part of his income as well.  So even if he's paying 10% as taxes, this chart will make it look as though he's paying much less of a percentage in taxes.

          Unless I'm misunderstanding, breaks going to the poor are accounted differently from breaks going (typically) to the less poor.  So if I have a business and I take in $20000 and incur $5000 business expense, and the tax rate is 10%, that is counted as income of $15000 ($20000-$15000) and tax of $1500, but if I don't have a business and I have the same income of $20000 with child care expenses of $5000 and get a child care credit of $500 off of my tax bill of $2000, that is counted as income of $20000 and tax of $1500.  So the 2 individuals take in the same amount of money and pay the same amount of taxes, but the businessman is labelled as paying 10% taxes (15000/1500) and the poor person as 7.5% (20000/1500).  That's a direct consequence of the fact that business losses are deducted from income while tax credits to poor people are not.  

          If I've misunderstood please correct me, but it sounds as if the way these numbers are computed is skewed to exaggerate the "tax burden" of businesses and understate the "tax burden" of poor people.

        •  Good. Top 1% Starts at over $380,000 (0+ / 0-)

          AGI per year (2008) and averaged $1.2 Million  AGI in 2008.

          Taking away another couple % from them will not likely result in hunger, or homelessness, or no school for the kids, or no medical care.

          So I'm ok with that.

          In addition, the top levels of income categories spend a smaller portion of their disposable income than the lower categories, so it supports recovery better to do what Obama is proposing.  

          The Demand Creators need more purchasing power.  

          Someone in a very expensive suit is at the front door and says he wants to foreclose on our democracy. Where should I tell him he can put his robosigning pen?

          by Into The Woods on Thu Sep 15, 2011 at 05:03:27 PM PDT

          [ Parent ]

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