Small business owners say they're concerned Obama's tax increase on them would stunt growth

  • Article by: STEPHEN OHLEMACHER , Associated Press
  • Updated: December 10, 2012 - 3:26 PM
  • 16
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foreseer2Dec. 10, 12 3:10 PM

Republicans might want to define small business - and talk specifics about what is unreasonable in terms of taxes. In the example, a company pays its six shareholders a dividend - and the additional money to pay for the taxes on the dividend - before it invests in the company. That seems backwards to me - instead invest in your business, to achieve growth, make a profit (figured after you pay taxes - as one of many necessary business expenses), and then figure how much to pay out shareholders and to keep in cash flow. Put the needs of the business first and don't follow the model of the large company - that needs to pay big executive salaries and bonuses and dividends, before it decides on the amount of money to invest. That kind of worker last mindset is the reason why we continue to have layoffs and timid hiring - because companies would rather play it safe.

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randyratio84Dec. 10, 12 3:51 PM

@foreseer - Your understanding is flawed here -->"and the additional money to pay for the taxes on the dividend". The money a small business/S Corp distributes is to pay for the company's taxes. Per the article, S Corps are taxed at personal income rates to avoid being taxed at both the corporate/personal rates. S Corps will sometimes distribute more than the current year's tax liability if they have a good year for bonuses, etc. Yet, at minimum, they will distribute enough for their shareholders to cover the company's taxes.

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avejoeconDec. 10, 12 4:57 PM

The Congressional Budget Office estimated last month that Obama's plan to increase taxes only on top earners would reduce economic growth by 0.1 percent of Gross Domestic Product next year, or about $16 billion. That translates into about 200,000 fewer jobs. -------------Is this the same CBO that stated that the GDP growth would be 4% or higher this year if we pass the 'stimulus

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avejoeconDec. 10, 12 5:00 PM

"It's a very tiny portion of the cliff impact and it very much raises revenues and it does so in a fair way," Rep. Sander Levin of Michigan, senior Democrat on the tax-writing House Ways and Means Committee, said of Obama's proposal. "It will not stifle economic growth in any significant way." ----------------There's that FAIR word again, that no one on the left will define. I guess to them, Fair Means SOMEONE ELSE pays so I don't have to!

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drichmnDec. 10, 12 6:11 PM

"They recite it as gospel: Paying higher taxes will reduce the amount of profits business owners would otherwise re-invest in their companies, making them less likely to expand and hire more workers." .....Business does not pay taxes on revenue, it pays taxes on profits. Profits invested back into the business means lower taxes for that business.

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avejoeconDec. 10, 12 6:39 PM

Profits invested back into the business means lower taxes for that business.----------Except, you have to have profits, Which ARE taxed, in order to buy equipment, hire people, etc!

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drichmnDec. 10, 12 7:51 PM

"-Except, you have to have profits, Which ARE taxed, in order to buy equipment, hire people, etc!" ... the profit that is taxed is calculated after those expenses.

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avejoeconDec. 10, 1210:35 PM

-Except, you have to have profits, Which ARE taxed, in order to buy equipment, hire people, etc!" ... the profit that is taxed is calculated after those expenses.--------------OK, I guess you know more than the economists that are quoted in the paper!

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notforwardDec. 11, 12 8:03 AM

Come on Obama supporters. If you didn't think Obama's policies would hurt small business, you are even more naive than I thought. Did you also see that small business hiring is at all time lows? Go further and see Amy and Al (both hypocrites) now asking for extensions on the medical device taxes that they both signed per Obamacare. Get serious. You people voted for this, and if you didn't understand how it would affect the economy, maybe you are not qualified to vote.

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theagonybhoDec. 11, 12 9:51 AM

Small businesses are already scaling back and projected to not hire in 2013 cant wait for Obamacare to kick in 2014 combined with the new taxes that should really get the economy going.

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