As Congress and President Obama wrestle over whether to let the Bush tax cuts expire for the wealthiest Americans, one of the most heated aspects of the debate, in Washington and in neighborhoods across the country, is how a tax increase would affect small businesses.
Mr. Obama wants to extend the cuts for most taxpayers. But he proposes eliminating them for the top 2 percent of wage earners, whose taxes would rise. Opponents of the plan warn that a tax increase would batter hundreds of thousands of small businesses — from Silicon Valley start-ups to mom-and-pop convenience stores — and prevent them from creating the jobs that might lift the sagging economy.
This article is very interesting and ties into a lot of financial debates. I think that this is not the best idea because all proprietorship's are taxed only once as it is, and they are the easiest out of all business forms to start up. I think this can possibly help them but, I would rather see them having easier ways of obtaining loans- because that is one of the largest disadvantages of a proprietorship.
ReplyDeleteThere is an article on CNN.com today (that hopefully I can post later tonight) that reports on a survey of 31 top US economists who mostly are in favor of extending the Bush tax cuts for all income categories. Many of them believe that cutting them at all, even for the top 2 %, would seriously hinder the recovery. They argue that raising taxes for them would hurt small businesses (which the article you posted argues against), while proponents of a tax hike for top earners argue that that money would be mostly saved anyways. Interestingly, Alan Greenspan, former Chair of the FED, argued that keeping the Bush tax cuts for any income category is not wise given the current US deficit.
ReplyDeleteI wonder if anyone has written recently on the 'trickle down' theory - tax cuts for the wealthy who then spend more and the wealth trickels down to everyone. Reaganomics i belive?
ReplyDeleteThis does seem like the trickle down theory. It seems like Obama's plan is to give some tax breaks to more well-known and more profiting companies. If you own a small business, this may hurt your profit and company. However, maybe Obama is thinking that if you give tax breaks to bigger companies, they may be able to hire more people. Where as the smaller businesses wouldn't hire many more people even if they were given tax breaks.
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