Obama tells voter to "spread the wealth"

[TheGladiator]

Totally irrelevant. The question was about what plumbers "earn", and it no where near $250k. If you own a company and your employees generate enough income for you to make $250k great, but that isn't the going rate for the trade.

Wow, it was one example, and a potential goal for a guy that wants to buy such a company, that was in the context of what it was for.  Standard plumber clearly doesn't make that much, but the owner of such a company might.

...and there are a lot of blue collar business owners that make a lot of "jack".

If you would have looked to what the original context of the thread was; Joe the plumber wanting to buy the business. I went for the position of Joe the plumber becoming Joe the owner.

[mjs020294]

They won't have near the profits, if any. �If the payroll tax level is raised, it'll be a HUGE burden on companies. �The owner has also got to take care of his/her personal bills, as well. �Owners won't have the money for "new" and "growth". �

"Payroll Tax" is a broad term for taxes withheld from an employees pay check, i.e. income tax, SS, and medicare.  At this time there are no plans to raise "payroll tax" for workers earning under $250k, and even if there were it would come out of the employees pocket, not the employer.  Maybe down the road the employers SS contributions might get raised, which would be an issue.

Basically if a business owner paying themselves over $250k now they are going to pay more taxes, cry me a river.   If they are spending all their current take home pay, say $20k a month they will have to pay themselves more to maintain that.   Cutting workers isn't really a viable options for most business owners because they derive the bulk of their pay of the endeavors of workers.  Its kind of a which came first the chicken or the egg.

I have been a business owner and there are many perks and ways of extracting money out of a business before profits are declared.  Don't be too worried about an extra 5-10% tax levied on people earning pretty good incomes, they will survive.

[spartan]

What the hell does company turnover have to do with anything? � No one is taxing company turnovers, just pre-tax profits, i.e. after all the overheads(wages) are paid. �

Where in the hell did you pull that out of? �It was a statement of showing one such example of a company fitting the skillset and trade in question. �I happen to know of the business, because 1.)The company that I work for does business with them, and 2.) a guy that I work with married his sugar momma who just inherited that company. �I cited the 40 people thing because it is part of their advertising... They are one of the bigger firms in that particular trade, and considering that the individual that I know, his father-in-law as a wedding gift, gave him and his new wife a brand new Dodge MegaCab truck. �This is a firm that is in that $250,000+ bracket.

Totally irrelevant.  The question was about what plumbers "earn", and it no where near $250k.  If you own a company and your employees generate enough income for you to make $250k great, but that isn't the going rate for the trade.

MJ, based on what I understand, here is where I think you are wrong. Feel free to correct where necessary.

Said plumber might pay himself 100K. His Company might 'make' 160K. Because of the tax laws, currently it is more beneficial for him to declare this on his personal tax return. He thus has to declare 260K as 'personal income'. He will get hammered for tax.

Herein lies the current problem. For political reasons, these companies were exempted from the normal regulation and oversight that is normally afforded private companies in their line of business. The end result, due to Govt intervention is a complete mess. I do not profess to be an economist by any stretch of the imagination, but my take is that these 2 entities are not only the prime movers, but the instigators of all the problems we are experiencing today.

Agreed, thanks for elaborating further on this, and you're right, they are the instigators hand in hand with the gov't meddling, hence making me wonder to what degree of financial crisis we would be in, if at all had these GSE's not been allowed to enjoy such a position and ever been created?  

I think ADW is correct to a large extent that Capitalism left unchecked has a tendency to be a runaway bull, but you can't play both ends of the stick at the same time. In this case we have politicians who tried to take advantage of the system, bent the rules of the system then started pointing the finger of blame outwards when the system they created blew up in their faces.

Agreed, I wanted to point out that we already have the regulation in place, it is more of a matter of just enforcing whats there, not more regulation.  Ultimately the theory is if one does bad business, they'll soon not be in business.

I must admit that it appears a bunch of capitalists took advantage of the situation, but a bunch of others put it in place for political expediency, or ignorance. I'm not sure what is worse knowing who they are.

True, but again to what extent did they based upon meddling from the originators of this issue?

[ufojoe]

Classic "Deer in the Headlights" moment from tonight's debate.

I think disbelief would be a better description. Eye of the beholder I guess.

Not really.

Is Obama wrong about what he said?

McCain looked woefully uninformed on that issue and most people who see that see a man who is clearly caught off guard.

The one thing that always makes me laugh is when McCain is asked about the negative tone of his campaign against Obama.
His answer tonight is the one he has given over and over and still amazes me. Why did he go negative? Because Obama didn't
agree to all of those town hall debates.

What?

[mjs020294]

MJ, based on what I understand, here is where I think you are wrong. Feel free to correct where necessary.

Said plumber might pay himself 100K. His Company might 'make' 160K. Because of the tax laws, currently it is more beneficial for him to declare this on his personal tax return. He thus has to declare 260K as 'personal income'. He will get hammered for tax.

Please define "make".    I think you are referring to net profit, for which he would have two or three options.  

[TheGladiator]

They won't have near the profits, if any. �If the payroll tax level is raised, it'll be a HUGE burden on companies. �The owner has also got to take care of his/her personal bills, as well. �Owners won't have the money for "new" and "growth". �

"Payroll Tax" is a broad term for taxes withheld from an employees pay check, i.e. income tax, SS, and medicare. �At this time there are no plans to raise "payroll tax" for workers earning under $250k, and even if there were it would come out of the employees pocket, not the employer. �Maybe down the road the employers SS contributions might get raised, which would be an issue.

Basically if a business owner paying themselves over $250k now they are going to pay more taxes, cry me a river. � If they are spending all their current take home pay, say $20k a month they will have to pay themselves more to maintain that. � Cutting workers isn't really a viable options for most business owners because they derive the bulk of their pay of the endeavors of workers. �Its kind of a which came first the chicken or the egg.

I have been a business owner and there are many perks and ways of extracting money out of a business before profits are declared. �Don't be too worried about an extra 5-10% tax levied on people earning pretty good incomes, they will survive.

...thought it was starting at $100k.  Minor point - The business DOES have to pay payroll taxes that roughly match what the employee pays for payroll taxes (from rough memory the employee pays 7.5% and so does the employer).

[mjs020294]

The business DOES have to pay payroll taxes that roughly match what the employee pays for payroll taxes (from rough memory the employee pays 7.5% and so does the employer).

There is no such thing has payroll tax, its a term used to describe deductions taken from employees pay packets.  You are talking about employers SS contributions.

[cyberdude557]

The plumber's shouldn't worry about his taxes; he should worry about the loan that he'll never get because the current state financial crises.

What do plumbers make nowadays anyway? From my understanding, Obama's plan affects people that make over $250,000 anyway. I know plumbers charge up the wazoo for minor work, but do they really make that much?

That $250,000 thing is one of the biggest lies of the Obama campaign and most people educated on the economy know this. That's why this guy confronted Obama about it, and Obama even said to the guy's face that his taxes would go up. And the reason taxes should go up, Obama said, was because it is better for everyone if the wealth is spread around. That is at the heart of classical Marxist theory. Tom Brokaw said in an interview the other day that when the markets stabilize the government needs to determine how much debt someone can hold and how big a house you can live in.

"From each according to his ability, to each according to his need" That is what these people are preaching! I know it is cleverly hidden deep in their speeches but it is there! Look for it.

[TheGladiator]

The business DOES have to pay payroll taxes that roughly match what the employee pays for payroll taxes (from rough memory the employee pays 7.5% and so does the employer).

There is no such thing has payroll tax, its a term used to describe deductions taken from employees pay packets.  You are talking about employers SS contributions.

That's funny.  It's a COST to the company which is a tax.  Go to dictionary.com and look it up:

 tax - –noun
1.   a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.
2.   a burdensome charge, obligation, duty, or demand.


Also, the top income tax rate goes from 36% to 39.6%.  A business and the business owner that makes exponentially over $250k will pay much more in taxes under the Obama plan.  The top 10% of earners in this country pay more taxes and buy much more STUFF than the rest of us.  Treasury receipts will decrease if Obama gets all that he wants in place - businesses will lay off folks and spend less.  The wealthy will spend less and/or look for tax shelters.  

[mjs020294]

The business DOES have to pay payroll taxes that roughly match what the employee pays for payroll taxes (from rough memory the employee pays 7.5% and so does the employer).

There is no such thing has payroll tax, its a term used to describe deductions taken from employees pay packets. �You are talking about employers SS contributions.

That's funny. �It's a COST to the company which is a tax. �Also, the top income tax rate goes from 36% to 39.6%. �A business and the business owner that makes exponentially over $250k will pay much more in taxes under the Obama plan. �The top 10% of earners in this country pay more taxes and buy much more STUFF than the rest of us. �Treasury receipts will decrease if Obama gets all that he wants in place - businesses will lay off folks and spend less. �The wealthy will spend less and/or look for tax shelters. �

Its employers SS contributions, NOT payroll tax, move on!


BTW - you got the tax brackets wrong. 

[TheGladiator]

It goes to a government program which may or may not be there in 40 years....It's a tax.

Obama is raising the top 2 rates.  What's the highest now, 35%?  So, he's increasing it more than I thought!  From the Obama website:

Ordinary Income: The top two income tax brackets would return to their 1990�s levels of 36% and
39.6%. All other tax brackets would remain as they are today. Obama would also restore the 1990�s
levels for the personal exemption and itemized deduction phaseouts (known as PEP and Pease).
Obama would work with the Treasury Department to adjust the thresholds of these rates slightly to
ensure that no married couple making less than $250,000 (or single making less than $200,000) was
affected by these changes.

[mjs020294]

The top income tax bracket of 35% is only applied to taxable earnings over $357,000 a year.  That probably means it only effects people that declare earnings of over $500,000 a year, and from my experience as a small business owner declared earnings are a little shy of true earnings.  Folks will pay 4% more tax on earnings over $600k a year, cry me a freaking river.

All these claims of increased taxes effecting jobs and government revenues have been thrown out there in the past, and the truth is some way off the rhetoric.  The last eight years of low tax conservative rule in the US has seen far worse unemployment than eight years of socialism in the UK.

[NovaBuc]

People need to remember the business is not taxed on their gross earnings, but their net.. just like everyone is on their personal return. You take your deductions before figuring your taxable income. As someone who does this for a living, I deal with hundreds of small businesses operating in several states. I see plenty of businesses that make very good money if you look at their gross, some with multi-million dollar yearly gross year in, year out. The majority of them fall under the $250k earnings mark once their expenses are taken into account. Obama's plan doesn't hit small businesses as hard as McCain and some of his detractors are trying to paint. I'd bet donuts to dollars that Joe the Plumber's business nets less than 250k in regards to taxable earnings. Of course, that doesn't even get into the fact the majority of small businesses are incorporated as S Corporations.. regardless of their net taxable earnings, their corporation is not taxed. The earnings are taxed on the shareholder's personal returns thus no increase in tax on the small business.

 And honestly, all the corporation has to do is increase the officer's compensation either through bonuses or raises to reduced (or eliminate) net taxable income. Then it's a paycheck and an expense for the corporation.