Excerpt:
"A much better option is for the administration to reduce the payroll tax
for two years. The reduced labor costs would lead employers to hire more;
for employees, the increased take-home pay would boost much-needed economic
consumption and advance the still-crucial process of deleveraging households
(paying down credit card debt and other legacies of the easy-credit years).
"

Excerpt:
"President Obama could fully fund the reduction in payroll tax by allowing
the Bush tax cuts for people making more than $250,000 a year to expire.
Meanwhile, the Bush-era cuts affecting middle- and low-income earners -- the
vast majority of Americans -- would remain in place for the time being. "


The Small Business Tax Hike and the 97%
Fallacy<http://online.wsj.com/article/SB10001424052748703959704575454061524326290.html?mod=WSJ_article_related>

Excerpt:
The 3% figure, which is computed from IRS data, is based on simply counting
the number of returns with any pass-through business income. So, if somebody
makes a little money selling products on eBay and reports that income on
Schedule C of their tax return, they are counted as a small business. The
fact that there are millions of people in the lower tax brackets with small
amounts of business income may be interesting for some purposes, but it is
irrelevant for the assessment of the economic impact of the tax hikes.

Excerpt:
The numbers are clear. According to IRS data, fully 48% of the net income of
sole proprietorships, partnerships, and S corporations reported on tax
returns went to households with incomes above $200,000 in 2007. That's the
number to look at, not the 3%.

Excerpt:
Economic research supports a large impact. A pair of papers by economists
Robert Carroll, Douglas Holtz-Eakin, Harvey Rosen and Mark Rider that were
published in 1998 and 2000 by the National Bureau of Economic Research
analyzed tax return data and uncovered high responsiveness of sole
proprietors' business activity to tax rates. Their estimates imply that
increasing the top rate to 40.8% from 35% (an official rate of 39.6% plus
another 1.2 percentage points from the restoration of a stealth provision
that phases out deductions), as in Mr. Obama's plan, would reduce gross
receipts by more than 7% for sole proprietors subject to the higher rate.

Excerpt:
A paper published by R. Glenn Hubbard of Columbia University and William M.
Gentry of Williams College in the American Economic Review in 2000 also
found that increasing progressivity of the tax code discourages
entrepreneurs from starting new businesses.


I am all for tax cuts, such as the payroll cut.   Abolishing the income tax
altogether would be even better.  I am not for tax increases.  Cut spending
to make up the difference.  If not, a decreased payroll tax would be offset
by the increased tax burden on mid and small sized business.  This is a much
larger number than the 3% being batted around.  With a hit to their bottom
line, businesses will not be hiring.   They will be looking for ways to
recuperate their losses.


J

-

No man's life, liberty, or property is safe while the legislature is in
session. - Mark Twain

The artificial aristocracy is a mischievous ingredient in government, and
provisions should be made to prevent its ascendancy. - Thomas Jefferson


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