What is the Obama plan?
Is it to increase taxes on businesses that make more than $250,000 or households that make more than $250,000?
There is a difference. A business may make $250,000, but they could be spending more than that to finance the business. A family on the other hand, we know can get by with an income of less than $250,000, since most do.
Taxing businesses that make $250,000 doesn’t seem right. Anyone else with me on that?
I guess that depends on whether that $250,000 is their net income (less liabilities). If so, I think that’s fair, for the time being. I’m sure another president down the road will repeal the taxes for the lower end corporations, but right now, we need all the extra money we can muster without letting the middle and lower classes suffer. We need to pay off our debts as quickly as possible, and if that means proportionately extra taxation, then hell, sign me up. I’m feeling patriotic.
If it was net income minus liabilities then it would be their household income.
Sorry, meant net income (assets less liabilities).
Yah, I just think 250k isn’t a big profit for a company. It’s a lot for a family.
I think that strongly depends on the company. For a one or two man company, $250K seems like a lot of money. I would assume size has a large part to play in that.
If anyone read carefully, it is the profits ABOVE 250,000 that would see the tax increase. By the time a “small business” shows profits above 250 grand, they aren’t much of a small business anymore. Consider: An incorporated or chapter S business could “pay” salaries up to 249,000 to keep its business profits under the 250,000 trigger. Any decent accountant would have the answers. It’s much ado about very little. It is difficult to explain the intricate details in two minutes, and the scaremongers capitalize on that.
Thanks, tentative, that’s what I was thinking. And anyway, most small business owners like that file their taxes as individuals, which is why Obama mentioned the 95%, because that’s the percent of small businesses that earn less than the 250K. So under Obama’s plan, he’d likely only be taxed at the higher rate if he shows an income (not net revenues) that exceeds $250K, meaning the higher rate (39% vs. 36%) would only apply to whatever he shows as earned income beyond the $250K. And his savings on the part between $0-$250K could offset that, as least partly.
I just saw the CBS news and they confirmed what I thought to be true. Obama’s tax is for individuals who make more than 250k. A company is not an individual and the tax law would not apply to Joe the Plumber’s plumbing company.
This is off the subject, but I think I disagree. You have 10 employees and you make a profit as a company, after employees have been paid, of 250k and you aren’t doing that well. 250k would last your 10 person company about 6 months before you would have to start earning again.
This is the problem with these so-called “debates”. They have two minutes to explain an hours worth of detail. So both campaigns can never really answer a question in anything but vague generalities. This is why demeanor is the deciding factor in who “wins” the debate. No one is saying anything, it is how they say it. 
It would if his business is an “S” corp and he, as an officer, files income tax as an individual. Most of the mom-and-pops do it that way, because it protects their personal assets (like a home) from being taken if the business goes bankrupt.
??? Payroll plus payroll taxes plus any other employee benefits are part of business expenses and are taxable at the individual employee level. They are not considered as company “profits”, but as a normal expense of running a business.
Well, yeah, but companies can be taxed in addition to individuals. That is the issue that Joe doesn’t understand. He thinks because his company is worth 280k he would get taxed for it. He doesn’t understand that he isn’t making 250k. He is making whatever his company pays him, which won’t be 250k if the company is only worth 280k.
I guess I’m not making myself clear. If all his company produces as income just covers payroll and the nut he has to crack, his company makes zero profit and has zero taxable income. Any “draws” that he takes as personal salary is taxable. He’s had a pretty good year if he has made payroll and expenses and has to declare 250,000 in profit. Even assuming he only draws 50,000 as personal income, his total take is 300,000. I know damn few small business people who wouldn’t be delighted to pay 39% taxes on the take above 250,000. Paying taxes is a high class problem. You have to make money to pay taxes. No taxes, no money. 
He is just like Joe the Plumber, except that he actually owns a business, is licensed, and pays his taxes!
Interesting fact: people making ~40K/year (the average wage of a plumber is 43K/year) will save ~$300/year and under Obama would save ~$1000.
The lesson we learn: want your taxes raised, vote Republican.
– Market Watch
See my “5 things” thread.
viewtopic.php?f=3&t=165701
Apparently Joe is a shill with ties to McCain, not a plumber. But, anyway, as I understand it, under Obama’s tax plan, if he makes exactly $250,000 profit in a year, he doesn’t have to pay any additional taxes. Also note that the additional tax is only on income above $250,000. For each $100 in excess of $250,000 he would pay an additional $3 in taxes beyond the current rate. So if he makes a $300,000 profit in a year then his taxes would increase by $1500. And that’s a problem because…?
Yup. [size=150]IF[/size] they manage to make 250,000 [size=150]AFTER[/size] all business expenses, write-offs, depreciation, etc.
Is there an accountant in the house? The lack of basic understanding of small business financials here is staggering. 
Nope no thanks I have had to do enough of it and still on occasions do it, explain that shit??? No thanks. Then explain taxes and their applications??? Oh hell no I understand the mess but, wait you want an accountant, Hahh I have never been certified one so I do not count, WheeeeW…I can say this: Most failed businesses fail because they jump the gun on understanding what they are walking into. It makes my head hurt. 