Hultgren Calls Obama Tax Proposal An Increase on Small Businesses
President proposes extending Bush-era tax cuts only for those earning less than $250,000.
U.S. Rep. Randy Hultgren criticized President Barack Obama's call to extend the George W. Bush-era tax cuts for people making less than $250,000 a year, while at the same time allowing the tax cuts on those who make more to expire.
Republicans, including Hultgren, criticized the refusal to extend the tax cuts for all, citing that many of those who will be impacted will be small business owners, and it will affect their ability to expand business and hire new employees.
“Unemployment has been above 8 percent for 41 months now. U.S. Census data tells us that small businesses employ more than 25 percent of the total workforce. Insisting on a small business tax hike is the last way to create jobs," Hultgren wrote in a press release.
Hultgren, who represents the 14th District, said the president claimed to have cut middle class taxes every year of his presidency, yet pushing new taxes through the passage of the Affordable Care Act. At the end of June the Supreme Court ruled that the federal government can levy a "tax" on individuals who do not buy into the system. The justices said the individual mandate cannot be upheld under the commerce clause, but that Congress's ability to tax and spend in this case is upheld.
“He conveniently left out one of the largest government expansions of all time - his health care law, which originally included 22 new tax increases (12 of which were direct taxes on the middle class, violating his own pledge)," Hultgren said. "What the President is advocating is a tax hike that has already been rejected by the House, the Senate, and the American people. We don’t have a revenue problem. We have a spending problem, and this is not the time to be raising taxes on anyone, especially not job creators."
Despite the president's urging to extend the tax cuts for some Americans, it islikely to result in another standoff between the administration and the U.S. House, the Washington Post reports -- something Obama is counting on in order to paint Republicans as unwilling to support the middle class.
During his Monday proposal Obama said it's time to let the tax cuts for the wealthiest Americans expire. He added that most small business owners will not be impacted by his proposal.He said 98 percent of the public, as well as 97 percent of small-business owners, would fall under the $250,000-per-year threshold, the Washington Post reported.
Ray Galbiati
1:02 pm on Wednesday, July 11, 2012
SAME SONG.............................CHECK BACK WHEN CLINTON WAS PRES...........THE TOP 2% DID PAY MORE AND THERE WAS NO DEF.
Tim
3:47 pm on Wednesday, July 11, 2012
What a bunch of pandering.
This political comment is aimed at people who do NOT have businesses. Why? Because everyone that does have a business knows that the tax is PERSONAL income tax, not business tax. If you want to pay yourself more money, instead of keeping it internal to the books of your business, you SHOULD pay more taxes.
Raising the personal tax on those earning over 250K actually encourages them to keep more money invested in their business, instead of taking it out as personal income. Keeping more money in the business increases the amount of capital available to a business that enables it to further expand. And it will not be taxed even one cent more when it is kept in the business.
Claiming a personal income tax increases taxes on a business, is nothing short of a lie, and all of us actual business owners know it. The only people that this fools, are those who havent touched a business ledger in their entire life.
Keep talking Hultgren, talking yourself right out of office for either being incompetent enough to believe what you are saying, or deceitful enough to know you are lying for personal gain.
Oswego Resident
4:10 pm on Wednesday, July 11, 2012
+1 Tim.
Well said.
JPauly
6:47 pm on Wednesday, July 11, 2012
Word...
Tim Not
11:21 pm on Saturday, July 14, 2012
Tim, what kind of business do you have? What is its structure? If it's a proprietorship, a single-member LLC, or a subchapter S corporation, does it make any difference in tax rate if the income is taken at the personal level or at the business level? Doesn't all the business income just flow right to your personal income tax return anyway? For these cases, does it make any difference if you leave the income in the business or take it as personal income?
If it's a C corp, then don't you have to pay a tax rate of 34% (or more) on income over $75K, as well as an Illinois corporate income tax of 9.5%? As well, when you do leave the income in the corporation for now, and take it out later, won't you have to pay either income tax on it THEN, or else a dividend tax? In order to have an incentive to leave income inside a C corp, then, wouldn't personal rates have to rise A LOT before there would be an incentive to leave income "in the business"?
If a business owner wants to put money back in a business, he could do it by taking it as income now on his personal return, and then loaning it back to the business, so that he could retrieve the money later with no additional income tax. Since he can do this, wouldn't lowering his personal income tax rate leave him more money to do this with?
Are you sure about your position on this issue?
Tim
12:18 am on Sunday, July 15, 2012
Yes, I'm sure.
Sounds like you have a good start on the topic. If you keep at it, you can be sure too.
Tim Not
3:46 am on Sunday, July 15, 2012
Tim, is that all you have to say? "Keep at it"? The facts and logic embedded in my questions indicate that your rationale is faulty, in a completely neutral and non-confrontational way, and you decline to address them? Why?
Tim
8:36 am on Sunday, July 15, 2012
Yes, that is all I'm going to tell you. In no way do I feel the need to give away any competitive advantage I have, to prove anything to you.
Either you can figure it out yourself, or you can't.
Tim Not
9:40 am on Sunday, July 15, 2012
Anybody can figure it out just from your comment. This is your only possible reply when you're wrong and don't want to admit it. Thank you!
Tim
11:00 am on Sunday, July 15, 2012
because 35(not 34%)% is less than 9.4% ?
(note also that not all corporations are incorporated in IL, like in your example)
If that margin isn't preventing it now, why would a slight raise prevent it in the future? It seemed to work quite well when the rate was >90%. The country had its largest growth in GDP ever, during that period.
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213 (top marginal rate peaked at 94%)
http://www.tradingeconomics.com/united-states/gdp-growth (GDP growth peaked at 15.1% in a year when the top marginal rate was 91%, peaking at 94% in the immediately prior years)
Now, what gives me better leverage against a business credit line? paying myself money taxed at 35%, or keeping it internal to the business as an asset(in many forms other than money/cash), to use as collateral when securing an expansion loan(which allows for further tax credits on interest payments and depreciation)?
You seem to understand the words you are using, you just don't understand the concepts. After all, the answer to your question is right in your own post, staring right back at you.
The math and documented historical measurements are not in dispute. This works, and it would be a shame if you are not using these concepts in any business of your own.
So yes, I stand by my position. Do you have any verifiable historical data, not personal opinion, that contradicts the linked information?
Tim Not
1:21 am on Monday, July 16, 2012
Tim, thanks for re-engaging. In order:
1. No, because 34%+9.4% (C corp fed + IL) > 33% + 5% (personal + IL) (based on $250K income, not max). Simplistically, it would rarely make sense to transfer income from right to left, even if the 33% is increased to 35%.
2. I'll concede that not all corps are IL corps, but you and I and the Rep are all in IL, aren't we?
3. I don't need any new verifiable historical data; we can just use yours, kinda. I couldn't download the data from tradingeconomics, so I used your taxpolicycenter data plus equivalent GDP growth data from BLS (http://www.bea.gov/national/index.htm). It's not logically valid for you to cherry-pick a couple of years that make your point, and ignore all the other data that doesn't. (Example: The peak BLS GDP growth rate year was 1942. Wouldn't you think that maybe that GDP growth was caused by the buildup for WW2, and that the high max personal tax rate, instead of being key, was irrelevant?) Instead of cherry-picking a couple numbers, calculate the R-squared correlation coefficient for ALL of your tax rate data and your GDP growth rate data. If it's like the BLS data, you'll get an R-squared value of between 0.06 and 0.09 (depending on whether you use nominal GDP or chained 2005 dollars). Conclusion: The data in your links provides no statistical justification for drawing even a conclusion of correlation, much less causality. All you can say is high tax rate doesn't preclude GDP growth. (continued...)
Tim Not
1:22 am on Monday, July 16, 2012
4. I think I understand your "business credit line" tactic. It's not a general tool, it's a very specific one. In my opinion, in order for it to be valuable, your business has to NEED the asset you're talking about anyway, it needs to be a short-useful-life asset, and you have to want to use it to leverage your business to the level that suits your needs. In addition, your bank has to offer a reasonable loan-to-value ratio for the collateral. It doesn't work for many businesses. Mine for example. (Two of my little businesses throw off enough cash to keep all 3 self-financing. I don't need banks for financing at all.) But thanks for sharing the tactic anyway.
So, bottom line: The Rep's statements are true for many $250K+ small businesses, but not all (per your argument). BUT, you rationale is ALSO only valid for some $250K+ small businesses (most notably, NOT proprietorships, subchapter S, or single-member LLC's, and also not for many C corps). Therefore, it doesn't seem to me that your rationale justifies the intense invective you levy at him in your initial comment. Besides which, you're an intelligent guy who can adequately present his data and logic without resorting to that kind of behavior. It should be beneath you.
Thanks for listening. I wish you every success with your business!
mg
8:00 pm on Wednesday, July 11, 2012
What an empty suit. Can't even come up with an original talking point. Please move to some southern state where they actually believe this kind of nonsense.
Mark
6:33 am on Thursday, July 12, 2012
THANK YOU Tim!
It's also ridiculous blanket statements like "we don't have a revenue problem, we have a spending problem" that are so typical of the polarizing positions that have caused our gridlock. We need compromises, you Norquist worshipping fools!
Logansdad
3:34 pm on Thursday, July 12, 2012
Since the Republicans believe in trickle down economincs and have said tax cuts stimulate job creation where are all the jobs that should have been created since the Bush tax cuts have been in effect?
Brian
3:37 pm on Thursday, July 12, 2012
China.
It's good business.
David Edelman
8:55 am on Friday, July 13, 2012
I attended the town hall he had in Oswego. He really could not give a straight answer on anything. All you heard were talking points as noted above. No ideas, no thought, just talking points. I give him credit for doing the town hall, but he is really hard to pin down on ideas and taking a chance at doing something. In Time magazine recently - they noted this current congress has passed only 132 bills - one fifth of them were for naming post offices. That says a lot of how little he and his congress have done in these two years of 2011-2012 since he was elected........ We cannot afford these lack of results anymore.
russ harrison
11:58 am on Sunday, July 15, 2012
Am I the only person that has heard that Bovine Scatology before?Same words, different politico.Fact is,each time tax cuts have been allowed to the upper wealthy levels, jobs and economic growth has dropped, not improved. Yet, when the tax rate has been at the highest levels, money was forced back into the economy in order to reduce tax burden.That created work and jobs,and the public benefited from it.That happened under leadership from BOTH parties.
Trickle down theory is just that..theory, and a bad one at that.It has never proven to be a sustainable tool, nor has it ever shown much benefit.Grover Norquist had a good idea about limiting spending and cutting taxes, but he turned it into an idiotic and impractical mandate that burdens all that subscribes to it.Objecting to the REMOVAL of tax breaks for the very wealthy is not a hurt against small business. Small businesses do NOT get tax subsidies and corporate welfare for the most part.Small businesses would actually be stimulated by extending tax breaks for 250K and below and eliminating above 250K. When GE gets BILLIONS back and pays zero in taxes,the system is wrong.When Wells Fargo lays off thousands and still gets tax subsidies the system is wrong. When Republicans and Democrats block useful acts and legislation simply because its sponsored by opposing party,the system is wrong. Hultgren needs to drop the "party line at all costs" stance and start working for us, the public.Public first, party second.