Healthcare Debate – “Read My Lips”

Then candidate Obama made it a cornerstone of his campaign that people making under $250,000 per year (95% of Americans) would not see a “tax increase”. He would raise taxes on those “lucky” (his term) 5% that “benefitted” unfairly during the Bush years. Now with the healthcare debate raging, his promise to “tax the rich” is coming true.

Not only do he and the Dems plan letting the Bush tax cuts expire, but now they want to add a “surtax” to this “lucky” group in order to pay for nationalized healthcare. Unfortunately, most uninformed Americans look at this and say “about time!”…”tax the rich!”…”not going to effect me!” and go back to watching Jerry Springer or Entertainment Tonight.

However, the truth is far different. Many of the “lucky” 5% are small businesses that provide 90% of all new job creation. The Tax Foundation paints a far different picture of what the Democrats are up to. While the explanation may be somewhat complicated, it breaks down into simply this:

Businesses DO NOT pay taxes! – Tax is looked at as an expense. Increase expenses in business are dealt with in one of three ways:
a) To cover increases, prices must go up.
b) Other expenses cut (personnel, capital projects, etc.)
c) Reduce profits

A) If prices go up for the goods or service the business provides, is this not an unforced “tax” on the consumer?

B) Cutting other expenses – In most businesses (especially small business), the major expense is in personnel costs. Therefore, the area to make the most impact is to cut personnel expenses and/or benefits. The next option is to drop or delay capital projects or expansion. This means putting off a “shovel ready” project and potential employment.

C) Lastly, the business can choose to reduce profits. Yet, in today’s economy, profits are already being squeezed and the lifeblood of any business is cash profits. Without enough cash on hand, businesses can’t meet payroll, pay vendors, etc. and faces bankruptcy.

All 3 scenerios are hurtful to the economy, employment, and the long-term viability of the country. This “spread the wealth around” sounds good to those who are “less fortunate”, but is disasterous to the economy. Therefore, when it comes to the economy, the Democrats are either bumbling fools or smart enough to know they can play on the economic simplicity of the masses. My guess is the latter.

Wake Up Fools! Tax increases are coming for everybody, not just the “lucky”.