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Tuesday, February 26, 2008

The Impact Of Obama’s Policies On Business

This article is talking about how Barack Obama’s proposed policies will impact those who run law firms, but the impact of those policies will effect business owners as well.

You don’t have to be a lawyer, or run a law firm, to feel the crunch from hiked taxes and expanded government spending.

We all know that Obama wants to end the Bush tax cuts. That is a 3% bump across the board to the bad old days when associates faced a marginal federal tax rate of 36%.

But the real hidden tax is that Obama plans to end the social-security tax cap. Right now, you may notice, sometime during the summer or early fall, your take-home pay suddenly goes up because they stop deducting FICA. Current law caps social security taxes: in 2008, the cap is at $102,000. Obama proposes to abolish this. That mid-summer bump will be no more: add about several thousand dollars to your annual tax bill.

But social-security taxes are not only on employees. The government also charges 6.2% to employers that you never see on your W-2s. But rest assured the partners see this, and will notice that the expense of keeping an associate has risen several thousand dollars a year when FICA taxes double and triple. Will they swallow that additional expense, or take it out of your bonus?

Read the whole thing.

I think a lot of people who want to see government increase spending and take on new projects forget that someone has to pay for it, and the people who do pay for it are usually the ones who sign our paychecks.  When government begins burdening businesses and, yes, “the rich” with excessive taxation that money still comes out of our bottom line.  It means less money available to hire new employees or give new raises/benefits to existing employees.

The liberal solution to that problem is to mandate higher wages and benefits (minimum wage laws, etc.), but ultimately that just makes things worse.

The real solution is to downsize government to only its most basic and necessary functions so that businesses are free to grow.  Which, in turn, means more jobs and more pay for the rest of us.

Comments

Kinda interesting reading the comments.  Presumably most of the readers are Associates or Junior Partners, and all would have taken at least basic courses in tax law.  Yet, for the most part, they show an appalling lack of knowledge about how the policy prescriptions of a presidential candidate will effect their person take home pay.

Pitiful!


“Poverty of goods is easily cured; poverty of the mind is irreparable.”

Bat One on February 26, 2008 at 03:48 pm

The legal profession will still (largely) be voting in favor of the politician who proposes to raise taxes.

The reson is simple.

The politicians who want to raise taxes, also want to make it easier to sue anybody for anything.

what’s paying an extra 10% in taxes compared to being able to collect 1/3 of a $250,000 judgement against some evil homeowner who’s vicious rottweiler bit a poor defenseless burglar who only wanted a DVD player and laptop.

The fact is that there’s a lot of money to be made telling people they aren’t responsible for failing high school, smoking, carelessly flying small planes, or dumping hot coffee in their crotch.

The additional taxes they pay will be nothing compared to the revenue lost if American suddenly realized that every misfortune shouldn’t be a lottery ticket in discuise.

Wing Chun Geologist on February 26, 2008 at 04:09 pm
Avatar for halfacarafe

The real solution is to downsize government to only its most basic and necessary functions so that businesses are free to grow.

How do you propose we do that.  It used to be the battlecry of the Republicans but still only meant that “we will take to to Hell in a handbasket too, only slower”.  Now any conservative ideas are horribly downplayed and politics today are giving as much goodies to your voters as to insure reelection.  I

halfacarafe on February 26, 2008 at 05:16 pm

How do you propose we do that.  It used to be the battlecry of the Republicans but still only meant that “we will take to to Hell in a handbasket too, only slower”.  Now any conservative ideas are horribly downplayed and politics today are giving as much goodies to your voters as to insure reelection. 

The only way to downsize government is to put limits on the amount of money governemtn takes in. The limit should be tax revenues. Here’s my simple three-point plan.

1. Replace income tax with national sales tax.

2. pass a balanced budget ammendment.

3. Make every department and program subject ot zero based budget.

2.

Wing Chun Geologist on February 27, 2008 at 09:01 am
Avatar for Business

"How do you propose we do that.  It used to be the battlecry of the Republicans but still only meant that “we will take to to Hell in a handbasket too, only slower”.  Now any conservative ideas are horribly downplayed and politics today are giving as much goodies to your voters as to insure reelection.”

Vote for Ron Paul for president and support him because he have plans that will help increase the value of our money and create more jobs.

Business on February 27, 2008 at 08:32 pm
Avatar for Berry Tree

I agrees on down sizing govt. expanses. Even president taking vaction cost tax payers hundreds of thousands of dollars.

Berry Tree on March 8, 2008 at 12:11 pm
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