Posted by Bob Lord
Obama's proposal to extend the Bush tax cuts to the first $250,000 of taxable income brought back the same tired and wildly inaccurate arguments from the right. This morning, watching freaking Joe Scarborough while on the treadmill, I heard him speculate how a small business owner / "job creator" who has 6 employees and makes $250,000 will wonder "Obama's going to raise my taxes, so I need to cut one employee" or something like that. WTF????
Yes, I'm a tax lawyer, but this stuff isn't that hard. Income taxes apply to INCOME. So, if a small business owner has an employee whose compensation, benefits and overhead cost, say, $75,000 per year. That employee creates revenue of more than $75,000, or the small business guy would let him go regardless of tax consequences. Let's say he generates $100,000 of revenue, which leaves the small business guy with $25,000 in profits of Mr. Employee. The tax only is on the $25,000, so regardless of how much the rate increases, the small business guy won't be terminating Mr. Employee, unless the rate goes up to 100%, and even then it only would be a break even whether or not to let Mr. Employee go.
What's infuriating is that the small business guy knows this. He'll vote against Obama, though, because he's obsessed not about having to let employees go, but about the couple thousand bucks of luxury items he might have to forego if the rate on income above $250,000 increases by a few percentage points. That's no big deal. He wasn't going to vote for Obama in the first place. But the guy listening to Morning Joe who has never had this basic stuff explained, and who sincerely is worried about his job with one of the "job creators" might buy into this stuff. And you know something? There just may be no way of reaching all those TV viewers and allaying their fears. And that sucks.
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Thank you.I think this is only going to get worse. From what I’ve read,this could be a felony.This is the perfect example of entitlement, to me. I bet he never thought that any of this would ever be found. I think this is what we Dems, call “vetting”.
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Seems to me that one way or another he lied under penalties of perjury. But it’s entirely possible that both the SEC and the FEC statements are lies. For example, what if he did not hold all the titles he claimed on the SEC filings, making them false, but nonetheless had some participation in Bain’s affairs, making the FEC filings false. Somebody should be questioning Bain’s tax position in the relevant years as well. If Mitt did nothing, the compensation they paid him would not be a justifiable deduction. Yes, this happened 10 years ago and yes, the statute of limitations generally is three years, but not if a deduction is known to be false at the time it’s claimed. And anyhow, the issue isn’t really whether Bain could be pursued for tax fraud, but whether there are yet more inconsistencies in Mitt’s stories. The tax returns and books and records would be revealing. For example, was Mitt paid director’s fees during 2000 and 2001? Did he or Bain deduct the cost of his attendance at meetings? Were deductions claimed for such things as cell phone expense or home internet expense, as they typically are? Were there any benefit plans where participation was conditioned on active employment in which Mitt participated?Also, what new investment money came through Bain’s doors in 2000 and 2001, and did Mitt play any role in bringing it in? Logically, if there were a large potential investor, it would be odd for him not to have some contact with Mitt prior to investing.
Bob, as a tax attorney, can you speak to this??
http://www.balloon-juice.com/2012/07/12/one-more-tidbit/