Sunday, November 4, 2012

Stories That The GOP Wants Us To Believe

     (1) Large is small. According to the GOP definition, any business, e.g., a partnership or a Limited Liability Company, that passes its net income through to its owners for inclusion on their personal federal income tax returns is a small business. There is no limit to the amount of income such a company can earn! For example, privately owned companies Cargill and Koch Industries each had over $100B in revenues in 2011, yet qualify as small businesses under the GOP's definition!
     While agreeing in principle that the tax code needs revision, the Democratic Party would limit the definition of small business to one that has a net income not exceeding $250,000. While that figure may be a bit low, it certainly makes more sense than basing it on how the paperwork is set up.
     (2) The estate tax is killing small business. Through 2012, there is no estate tax on estates not exceeding $5M in value. Unless Congress extends the exemption, it will revert to $1M per person in 2013. So unless the estate of a married couple exceeds $2M in value, there is no estate tax. The percentage of truly small businesses falling into that category is very low.
    (3) If the income tax rates were reduced, businesses would hire more people. I was in the accounting business for over 40 years, and worked with hundreds of business owners. I cannot recall a single case where the owner hired or fired because of his tax rate. Lower tax rates simply mean more money in the owner's pocket.
     (4) Lower tax rates stimulate the economy. This past week the Congressional Research Service, a nonpartisan arm of the Library of Congress, withdrew publication of an economic report that found no correlation between top tax rates and economic growth. The author of the report, Thomas L. Hungerford, is a specialist in public finance who earned his economics doctorate from the University of Michigan. He examined the historical fluctuations of the top income tax rates and the rates on capital gains since World War II, and concluded that those fluctuations did not appear to affect the nation’s economic growth. To no one's surprise, Senate Republicans, who know far more about economics(?) than does Mr. Hungerford, “raised concerns about the methodology and other flaws” of the report.
     (5) Congressmen have far more knowledge of the way the world works than do scientists who spend their lives studying the processes of nature. From Congressman Todd Akin and his knowledge of “legitimate rape,” to his many colleagues who disbelieve the conclusions of 95% of the world's climatologists regarding the attribution of climate change to mankind's activities, they have special knowledge of nature's workings. The problem appears to be that scientists do not spend enough time listening to science “experts” such as Rush Limbaugh, Sean Hannity and Ann Coulter.
      (6) Mitt Romney has a plan to create jobs and stimulate the economy. From his campaign speeches, it appears he has many plans, one for whatever section of the electorate he is courting at the moment.
     My books, “There Are Only Seven Jokes” and “The Spirit Runs Through It” are available in paperback or Kindle at Amazon.

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