FOR THE DAILY SOUTHERNER
We're just beginning to peek over the so called "Fiscal Cliff" and it is very scary, especially for small business owners. Laws are set to change at midnight Dec. 31, 2012 and the President seems to be pulling at the bit to have some kind of gunfight at the OK corral. The President seems to feel that the income tax should take a big hike on the so called rich.anyone (or any entity) earning over $250,000.
That ($250,000) sounds like a lot of money. And it is. But, if someone or a small group of people are operating a small business it's not such a huge amount of money. $250,000, or more, may be the minimum that's needed to just stay in business and to keep workers employed. Having an annual income of $250,000, or more, certainly doesn't mean that the owner (or owners) is putting that much money in their pockets.
These small business operators may be doing business as sole proprietors, partnerships or small "S" corporations. This means they're filing their taxes as individuals. Whereas the $250,000 of income may seem large, most of the time the majority of this money is actually invested right back into the business in order to keep operating and to keep paying their employees' salaries.
With the President's tax plan these small business owners can expect to pay an average of $24,888 in additional taxes. This average can cost one job or more jobs. It has been estimated that the President's tax hike could put about 1.2 million jobs in jeopardy. It's almost like if someone wanted to actually ruin the economy of this nation then this would be the proposal to follow.
The President says that the Bush tax cuts would affect just 3 percent of small businesses, but he fails to explain that this 3 percent accounts for 50 percent of all business income. Something has to be done and it has to be done before midnight on December 31 this year. Raise taxes on small businesses and watch unemployment rise dramatically or use some common sense and get our economy back on track and increase employment.
Sadly, one of the more successful political strategies in our political history has been to create a class warfare situation. Most of us are naturally envious of those who have appreciably more money than we have.
From this natural assumption the politician creates class war by demonizing the rich and insists that they are the ones who are causing just about every problem that we face.
I have never been hired by a poor person and all of my employers happened to have worked themselves up from the bottom, too. I was only employed by the government once. That was when I served in the military. I didn't mind my military service. I believed that I owed that to my country.
And I thought that service would help keep our nation being a democracy with a free enterprise system. I still believe that.
I don't think it is a matter of whether we like, dislike, or don't care about the rich. It's a matter of going along with the President's tax increases and going into a deeper recession or creating more jobs and beginning to put this nation back on the road of prosperity.
Yes, there can be a compromise. The Congressional Budget Office estimates that if Congress takes the middle ground and extends the Bush tax cuts (over Obama's opposition) but cancels the automatic spending cuts, the result, in the short term, would be modest growth but no major economic hit.
However, the CBO also projects that if the current laws slated for 2013 go into effect they would cut gross domestic product (GDP) by 4 percentage points in 2013 and thus send our economy into a recession with a loss of about 2 million jobs.
Actually, this should not be a partisan issue. The very idea of raising taxes on our biggest job creators in a time like this is virtually insane.
But, our president seems to be begging for a gunfight at the OK corral. His position seems to be that his reelection has given him a mandate to do anything he pleases regardless of what the non-partisan CBO recommends or what the results may be.
I don't believe the President was given any such mandate by his reelection. He certainly did not receive anything close to the majority of small business owner's votes. He barely won the popular vote, but his victory was assured by 90 percent of one demographic and 70 percent of another demographic, both made up of many very good, hardworking people, but neither of which (as a group) create even a micro-percentage of jobs. Perhaps the 10 percent of the 90 percent of the demographic who did not vote for the President were the job creators in that demographic group.
It's not time for a gunfight at any place to feed someone's personal ego. It's time to work together and to do what's obviously best for the citizens of this country. The midnight hour is approaching and I have always liked to look at the moon, but not at someone trying to moon the nation because of an inflated ego.
(Bob Harper is a retired Tarboro businessman who writes a column of general interest.)