How many times has the phrase “Cut taxes for the middle class” been used and the defining or demarcation line seems to be the $250K yearly income number. Let’s eyeball this for a minute.
If one is supporting a family on a gross of $250K they have even less. Kids ain’t cheap. I mean computers, iPods, PS3’s, clothes for growing kids, paying for their extra-curricular activities, etc, can place a financial burden on one. If a family has 3 kids, a mortgage, two car payments and kids to clothe, feed, house and support, the $150K or so after federal taxes is not a princely sum at all. Again, better off than many, but not rich in anyway at all. And those kids need a college fund too, so the costs keep climbing for sure.
I would fairly conclude an income of $250K is nice, but misleading. If one works for someone else and earns $250K gross, they are in a fairly decent position, but if one owns their own small business and grosses over $250k, it’s a whole different breed of cat for sure. Most small businesses are sub-chapter “S” corps – I know – I own one. For the sake of accounting, ALL business income under chapter “S” is considered “personal income.” That’s a huge load of horse dung. Lemme explain.
In my service corporation, a sub chapter “S” corp, all revenues are considered personal, but that’s very misleading. What about the cost of equipment – personal computers, printer’s, paper, ink, etc? What about travel costs? Airplane flights are not too cheap, especially business flights when one cannot book months in advance to get the best saver rates. And the hotels soak one too. Tourists pay different rates than do business clients, just like in the commercial airline deal. There is a cost to run a business, and other businesses – bigger ones – get to deduct and NOT consider expenses as part of earnings, but “S” corps are constituted differently.
So if my corporation grosses say $300K, but I have $150K in genuine and real business expenses, I have not really earned $300K have I? No, my pre-tax gross was $300K, but my post expense gross is what I should pay taxes upon. That is how it has and does work in this nation, so I am not arguing for some new reality, merely discussing the current reality. So if my $300K pre-expense gross is reduced by half, should I be taxed on that money too? There is a huge difference between receipts and gross income versus net revenues. Net means after expenses. All business is able to deduct the cost of business from their bottom line.
Most companies in this nation are small business. It is we, the sub chapter “S” folks who are being mistreated in this little progressive forwarded misnomer. If my gross receipts are reduced to say $150K AFTER all legitimate business expenses, I am clearly NOT earning a $250K personal income.
I’m sorry folks, but it’s true that a poor man never hired a person. And since MOST of us work for someone else, where does it make sense to demonize the employers? Some folks rail on against business, but I bet they work for one, don’t they? Do they grasp that if there were no business, there would be no jobs? Are they this obtuse?
Sure, some mega corporations are stinky. Some of them are underhanded and will screw anyone they can to increase their bottom line. But as MOST larger businesses are owned largely by the stockholders who demand profits, in what world is it sane to scream that profit is bad? Most of those making that claim own stock in something – I GUARANTEE IT! Do they want their stocks to go up? You betcha they do! If Joe owns $10K in stock in Acme Widgets, does he want them to NOT turn a profit? If the company does not turn a profit everyone loses their job. Is that preferable to some folks?
It is exceedingly easy to scream and finger point but I find most of those doing it talk out of both sides of their mouths. They want their stocks to go up in value, but scream that business is bad. Just like petulant children they talk gibberish, make little intelligent sense, and seemingly no cogent arguments at all emanate from them. Just a litany of someone, somewhere is bad, evil, underhanded, etc. Then they go to work at Acme Widgets to collect a pay check.
Oh, and lest we forget the self employed pay through the nose for health insurance. It costs my wife and I $1300 per month for a typical Blue Cross/Anthem HMO and it IS NOT a Cadillac plan. I have regular deductibles like everyone else. The extreme cost is a reflection of the market and the demonizing of the health care industry by some folks with an agenda. It IS NOT a fancy plan at all. It’s basic regular health insurance HMO like 98% of you reading this have for yourselves and your family. So deduct another $15,600 from my gross income before taxing me. Suddenly the $300K my “S” corp has grossed on good years, is reduced by a huge margin, no?
Rich is when one lives in a much bigger house than they can reasonably use. When one drives a $100K car and pays $20K per year for their Golf Club membership. When one’s wife wears Prada and carries nothing but a Coach bag, then maybe they are rich, but I don’t know those people. My wife wears clothes from the mall and not Saks or Lord & Taylor. My kids clothes came from Old Navy, Sears, Penny’s and the like. My food comes from the Food Lion. My cars are Toyotas, the newest one being a 2004. I have not been on a vacation other than the occasional weekend since 1996. And guess what? No complaints from me!
I know there are folks all over the nation and world who don’t have it half so good as me and mine. None of this was a complaint, merely a clarification of the facts, so the next time one hears about taxing the rich and the $250K demarcation, think about what I have said here. If you’re single or a childless couple and ya gross $250K maybe you are well off, but not even that is rich. And if your net is well under that and you have a mortgage and kids, well, clearly you are not “rich” in the manner some use to demonize so many. It’s truly a shameful, ignorant lie, and all to drive a political position and point.
And now the Congress has run home to their districts. They had time to host Stephen Colbert, but NOT time to extend the Bush Tax Cuts. Since it was agreed by most everyone to extend them, what is this about? It’s Democrat politics as usual. Remember, don’t blame Republicans for this – we are the minority party, thus have no chairmanships and DO NOT set the legislative agenda. That would be Democrats that do that!