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"?

Interactive "Soak-the-Rich" Calculator

The left loves to demonize large corporations and their CEOs as a greedy lot who should pay more taxes to reduce the federal debt. Now there's an interactive website, http://soaktherich.us, to calculate how much revenue the federal government would collect if it doubled corporate taxes and confiscated CEOs' pay of each, some, or all of the largest employers in 33 different U.S. industries, from aerospace to utilities. The results may surprise.

Bi-Partisan Agreement on Income Taxes

A Fox News poll released Thursday found 79% say all Americans should pay something in federal income taxes, even if it's only 1%. The sentiment enjoys broad bi-partisan support:  85% of Republicans, 83% of Independents and 71% of Democrats.

Instapundit links to this September report suggesting Americans have reason to be concerned when nearly half the population has no federal income tax liability:

Aside from the revenue impact of not having 58 million Americans pay income taxes, economists worry about the social and political effects of having so many people disconnected from the cost of government—a phenomenon known as fiscal illusion.[1] The concern is that when people perceive the cost of government to be cheaper than it really is, they will demand ever more government benefits because they either don’t feel the cost directly or believe that others will be paying those costs. Indeed, when one takes into account those who do not file, about half of all households pay no federal income tax, making the situation particularly worrisome in a majority-rule democracy.[2]