New research released today by the NFIB suggests that allowing tax relief on the top individual rates to expire will hurt job creation and the economy.
The report, published by Ernst & Young and authored by Dr. Robert Carroll and Gerald Prante, estimated the effects of the policy advocated by President Obama and some Members of Congress to allow the top tax rates paid by small-business owners to rise sharply starting January 1, 2013. It finds that over time the economy would be 1.3 percent smaller and there would be 710,000 fewer jobs. More than 72 percent of S corporation income is earned by the half-million S corporation owners who pay the top two rates.
Increasing individual rates directly impacts small businesses organized as S corporations, partnerships, LLCs and sole proprietors, also known as “pass-through” businesses. NFIB research shows around 75 percent of all small businesses are organized in such a manner.
Together with the new 3.8 percent tax on investment income introduced in the health care reform law, the study finds that the top tax rate on pass-through business income would skyrocket from 35 to nearly 45 percent.
Other studies suggest that such a 10% marginal tax rate increase will decrease start-up activity by 15-20%.
It’s as though we’ve become two separate nations living within the same land mass. One Nation is subsisting on the hard work, discipline, ingenuity and good will of the other Nation.
Here’s an idea I’ve been playing around with for some time. I finally decided to do something with it. It’s a Constitutional Amendment through which Politicians and Judges can finally be held truly accountable. It addresses a number of foundational problems by applying the economic principle of profit and loss to our political system. If Politicians stand to lose something (besides an election) the will make better (and fewer) decisions.
You can find it here: parallelparty.blogspot.com
I hope you’ll take a few minutes to give it a quick read. Please remember it’s a work in progress. I really just want to know if there is any interest in such an idea.
Feel free to comment and tell others.
Thanks
You are right Rick, it seems we’ve become two nations, one working day and night just to make the other one happy and comfortable. Don’t know when this capitalism is gonna over, graduates are jobless and only a group of few people is effecting the whole country.
I’m not entirely sure what you’re trying to communicate with your comment Jessica. But it sounds like you might not be a fan of something we’ve come to call Capitalism.
I, for one, don’t feel that I’m being compelled to work in order to make “Rich People” happy or comfortable.( I’m going to go out on a limb and say you do.) Rather, the resource of my labor is being misspent so that the takers (of all economic, political and ideological stripes) can take more without feeling the need to put anything back.
Also, it’s worth pointing out that people in the U.S. and elsewhere who call themselves “poor” have things that the richest people on earth couldn’t have imagined only a few decades or even years ago.
Here are some examples: Central heating and air conditioning, cell phones, color television, cable television and automobiles.
Because of this thing we’re calling Capitalism, many more people world-wide are far better off than they would otherwise be.
I’m sorry you’ve got yourself convinced that your life is so horrible. Maybe you should get to know some people who have real problems. It might change your outlook.