[rbohm]

Originally Posted by Therian

I may be incorrect here - I searched for a bit trying to make sure I had the facts right. Correct me if I'm wrong.

I see nothing in the tax plan that speaks towards gross business earnings being taxed. The only thing I see is the 6% payroll tax on families that make 250+ or individuals that make 200+.

Even if this did apply to businesses, as we all know, they are taxed on Net Income, not Gross Income.

Anyone who has 'worked their hands to the bone' for their business, and put in hours of hardwork, will do a couple hours of research or will hire an accountant to make the necessary entries to lower his/her net income.

For example:

"an owner can write off any expenses s/he makes into employee health care plan. An employer can also write off 15% up to $45,000 if the owner opens up a Keogh or SEP IRA account. Additionally, the company can choose to offer the account to employees and write off anything the company puts in for employees in addition to the 15%/$45,000. Even if a company makes over $250,000 net after doing these things,there are many ways to reduce their taxes and net income."

Next, how many sole proprietorship small businesses are there making over $250,000 net income? Probably not many, right? Probably less than the 2% of all small businesses that make over $250,000.

So with 98% of small businesses making under 250,000 net income, I see an overblown situation.

McCain's 23m figure was wrong

you are obviously not a business owner, or an accountant. yes businesses that make more than $250k per year can cut their expenses, a small amount, they can cut their prices, they can cut the hours of their employees. but all these have risks. if you cut expenses, you may not be able to take care of the customer as they want you to, so you lose business, and thus revenue. you might be able to weather a short term storm, but if it goes on too long for a small business it becomes untenable to maintain business operations and people lose their jobs. if they cut the hours of their employees, the employees will go looking for new jobs, and you have to hire and train new employees, and that costs money. a high turn over rate tends to kill a business as well. the business can also cut prices, and this works in a reasonably ok economy, and it only works in the short term. if this goes on too long, and the business has a sudden downturn, it will also die.

Originally Posted by DBMSTNG

a flat tax of 20% would mean significantly less tax revenue. the only way a 20% flat tax would work is if government spending would be drastically cut.

people like to bitch and complain about tax breaks to the wealthy, but what most fail to realize is what percentage of tax revenue is paid by the wealthiest 10% in America compared to the average Joe. the more you make, the higher percentage you are taxed. 30% of $1,000,000 is a hell of alot more than 20% of $50,000. change that 30% to 20% and the government has $100,000 less tax revenue.

you are assuming that the economy is a zero sum gain and it isnt. that so called loss of $100k revenue to the government is bogus to begin with. if a business had that $100k to invest in expanding the business, they increase sales, add to the payroll, and thus add to the tax base, and usually far more than that $100k that would have been lost in a zero sum gain economy.