Small business prepares for battle with the administration
It seems a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/04/26/AR2009042602838_pf.html"that many small businesses are bracing /afor a tax battle, according to this emWashington Post /emarticle (via a href="http://nalert.blogspot.com/2009/04/small-businesses-brace-for-tax-battle.html"Newsalert)/a: br /br /blockquoteBusiness groups say they're bracing for even more battles with the administration. br /br /"They're desperate for revenue. And therein lies the concern of the broader business community," said R. Bruce Josten, chief lobbyist for the U.S. Chamber of Commerce. br /br /"We're going to be a permanent target, and we understand that," added Catherine Schultz, vice president for tax policy at the National Foreign Trade Council. "The way they see it, corporations don't vote." /blockquotebr /br /A nurse turned entrepreneur is used as an example of how much the extra tax would cost, to her pocket book as well as her ability to expand and hire:br /br /blockquoteThe accountant, Carroll Hurst, said Johnson is unlikely to owe any federal taxes this year due to accounting changes that confer a one-time tax benefit. But in a typical year, he said, Johnson and her husband earn about $515,000 from various entities related to the schools. They claim around $90,000 in deductions -- much of it contributions to charity -- reducing their taxable income to around $425,000. Johnson said the sum they take home in wages is "substantially less." br /br /In a typical year, Johnson's federal tax bill would be about $120,000. But starting in 2011, the higher marginal rates would add about $13,000 a year, Hurst said. Capping the value of itemized deductions at 28 percent would add another $10,000, for a total increase of $23,000. br /br /And Johnson's tax bill stands to grow dramatically if Obama were to revive a plan to apply Social Security tax to income over $250,000 instead of capping it at the current $106,800. Because Johnson is an employee and an employer, she would have to pay both portions of the tax, Hurst said, tacking another $30,000 onto her bill. br /br /Johnson said such an increase would force her to consider scaling back operations. /blockquotebr /br /My prediction? More and more businesses like Johnson's will decrease hiring and expansion, and/or "go John Galt." People will wonder why their opportunities are drying up and look to the government for help, not really understanding that the government created the mess to begin with.
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