The Tax Fight Begins

Only in the Land of Oz (or Obama) would this be "fair." Big business and small business could be pitted against each other in Obama's "over-$250K" tax hike demand. If nothing else, it shows just how insane the current tax code is.  Tim Cavanaugh explains,

Big Businesses

• they file as Subchapter C corporations;
• they include GE, IBM, Ford, Pepsi, etc.;
• they pay a federal tax rate of 35%, but that's not their real rate because of countless loopholes carved out for certain industries: retail's real tax rate is an average 36.4%; most industries real rate is 26.6%; and 8 sectors (including finance/insurance, food services, and manufacturing) pay a mere 13.5% tax rate;
• GE, by the way, paid a tax rate of zip-zero-nada in 2010; and
• this group, often represented by the Business Roundtable, was invited to the White House recently to plead their case for lowering Subchapter C tax rate to 25%.

Small Businesses

• they file as Subchapter S corporations (i.e., as partnerships or sole proprietorships);
• they include your neighborhood hairdresser, deli, coffee shop, doctor, pet store, etc.;
• they pay the same tax rate as individuals (not as a business) — 10%, 15%, 25%, 28%, 33% or 35% — but they get to claim individual deductions like you;
• there are 26 million S corporations in the U.S, they employ 70 million people, and they account for the majority of business activity in the U.S.;
• this group, often represented by the Chamber of Commerce, doesn't get invited to the White House;
• Obama doesn't see them as businesses — just as 'rich people' — and he wants to raise their tax rates (if they earn more than $250K in a year) to 39.6% (from 35%) so they pay their "fair share."

Read Cavanaugh's article, and ask yourself:  how could any sane person think that raising small businesses' tax rate — while lowering big businesses' tax rate — is "fair"?