Obama v. Romney

Argument over stimulating job growth and supporting small business was of particular interest to me, and not because I am a micro business owner. After listening to weeks of former Governor Rmoney’s rhetoric in favor of assisting small business in lowering taxes, I was hopeful the truth would be exposed during last night’s debate.

President Obama did begin to uncover the disingenuous claims made by Mr. Rmoney when he stated, “Donald Trump is a small business.” President Obama did not articulate the point very well, nor did he expand on it as much as he should have. The Rmoney campaign gimmick, of creating jobs by reducing taxes for small business, simply promotes existing malfeasance.

Small business is defined by the US Small Business Administration as businesses with a 500 worker maximum. The Internal Revenue Service allows for S corporations, which permit corporate income, losses, deductions and credits to be reported on the partners’/shareholders’ individual returns at a lesser rate. Yes, I know this is boring and I can see your eyes glazing over but, please, stick with me. The unintended consequence of S corporation status is that it has allowed fabulously wealthy people to establish businesses to purchase assets, quasi-investment properties and amenities, that are strictly for personal use, i.e. vacation homes, constructed of the finest materials money can buy, at delightful locales, fully staffed, with all of the conveniences of Westchester County.

Mr. Rmoney said that lowering taxes will support job growth, adding jobs to our struggling economy. I am here to give testimony that the claim is not true, at least it is not true in the real world. The real impetus for job creation is positive cash flow in businesses that are not overly leveraged, because the profits are reinvested in the business, thereby affording owners the funds to hire more people.

Business owners, including me, have seen their share of payroll taxes increase as well as the costs of doing business increase. Insurance rates have escalated. Businesses are hiring in spite of increased taxes. We have hired another employee, paid that person a living wage, reinvested in our business and will, if the year end balance sheet supports it, reward the people who work with us by increasing their pay.

The reality is $1.00 per hour wage increase adds $2,080.00 to a workers gross annual earnings, based on a 40 hour work week. It increases the payroll tax burden for the employer as well as increasing some insurance costs, which are directly affected by payroll size. It also increases the revenue share for both state and federal coffers while it supports a struggling economy.

Financial responsibility creates jobs, tax cuts for Mr. Rmoney’s small businesses do not.

About elroyjones

Married, no children, responsibly self-directed, living happily.
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14 Responses to Obama v. Romney

  1. judithatwood says:

    I thought President Obama seemed a little off last night, but his facts spoke volumes. Every time Romney said how much he cares about the less fortunate, I wanted to spit on him. And the cavalier way in which he announced that people under 55 will lose the Medicare we have now, I almost jumped through the screen. And I loved when Obama warned us 50-55 year old Medicare recipients — even though Romney tried to weasel out from under his campaign promises, he seemed to me to be self-contradicting throughout the night.

    I weep for America if this whacko is elected president!

    • elroyjones says:

      The unfortunate reality is that he is credible to people. Obama was decidedly off his game last night. I didn’t think he did himself any favors when he said, “If you want…then vote for Governor Romney.” Obama will rebound.
      Rmoney was disgusting with his repeated, heart warming, anecdotes about unnamed voters requesting his “help”. It was enough to gag a maggot.

  2. The debate was a little depressing. I wish Conan had been there. He would have livened things up. But as the week goes by, and the news has a chance to catch Romnoid in all his lies, it will turn back around.

  3. Ray Colon says:

    A small business hires a new employee when it needs to hire a new employee. The state of the business dictates that decision. The resulting tax burden is just part of the hiring decision equation, along with salary and benefits. A slight increase of decrease in the payroll tax rate (actually the taxable earnings ceiling) is unlikely to sway the hiring decision of a restaurant owner, if the need for an addition waitress is evident, or of a construction firm, if additional human resources are needed to complete a project.

    Having worked in finance and accounting for corporations and small businesses, I agree that many of the deductions available to partners do not incentivize reinvestment or growth. I think that The President chose corporate jets as an example because jets project opulence. I’ll go with cars. An employee cannot deduct commuting expenses, but an owner can buy a new car “for business” and benefit from its status as a business asset. This type of perk is unnecessary and unfair.

    For Romney to casually mention that decreases in tax rates would be offset by deductions, like the mortgage interest deduction, ignores why that deduction exists in the first place. The pros and cons of that deduction can be debated, of course, but to reduce it in such an offhanded way speaks to the disjointed and illusionary nature of his tax policies.

    • elroyjones says:

      Excellent points, Ray. I feel strongly that Romney is not addressing small business, that most people imagine, when he talks about tax cuts. There are loopholes that need to be closed. We need to find a way to close them that spreads the burden across the socio-econimic spectrum without punishing any one segment of the populace unduly. Why should those with the least be expected to sacrifice the most?

      • Doug says:

        “Why should those with the least be expected to sacrifice the most?” Well, if you were to have a heart to heart with Bishop Romney…head of a Mormon stake, Mitt. He would tell you that it’s God’s plan …some Calvinism mixed with the prosperity gospel of the LDS. Listen to his 47% speech and you’ll hear some soft soap Herbert Spencer with hard hammered, nailed to the cross, Laissez-faire individualism. If you distill this down, you come to a very ugly 1930 european hell hole. Oh, you being a little lady and all, Romney ain’t sharing any church or political business talk with you, anyway.

      • elroyjones says:

        I just saw this comment, Doug. Even though it’s old news, you still make me laugh.

  4. gkinnard says:

    Great point of view from someone who has their “boots on the ground” in this regard!

    The debate . . . the worst 90 minutes I have spent in my life! Please allow me to go kick Lehrer’s butt! He lost control 13 seconds into the debate (if one can call it that). I have no idea what the devil Obama was doing. I do know that he tends to give his fellow Americans way too much credit for being smart. Some of us simply have to be TOLD when something is pure BS and he doesn’t seem to like pointing that kid of thing out.

    The debate was the absolute perfect forum for Romney. It was tailor-made for ‘spewing.’ And that’s exactly what Romney did: he spewed . . . and there was no one there to stop him. The knot-head never took a breath: he just kept spewing.

    I hope I never, ever see a debate done in that type of forum again. It was hideous! If you look at it in terms of a punching match, Romney won. That’s all there is too it. He scored the most blows—even though every thing he swung was garbage.

    There’s an old saying: “The sun doesn’t shine on the same dog’s [behind] every day.” Fate smiled on Romney last night.

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