It has been a couple of weeks since I heard this, but I can’t get the thoughts out of my mind.
Don’t believe everything you hear on the radio. Especially if you happen to hear some jerk named Neal Bortz, or something like that. For some reason I was tuned into the station he was broadcasting on as I drove home one night, and the more I listened, the angrier I got.
If the Bush 43 tax cuts are allowed to expire, this does not mean that every small business owner will have to donate another 5% of his or her income towards taxes. This is just plain flat out wrong, but you would never realize this if you listened to Mr. Bortz.
The 5% only applies to profits earned by small businesses in excess of $250,000. It does not apply to the salaries that small business owners pay to themselves, or to their employees. Those taxation levels will stay the same as they have been. It is only the incremental profits that will see the additional 5% tax level.
I swear, I was listening to this joker while I was trying to get out of the Birmingham airport parking lot and he just about had me convinced that every dollar I paid to my corner deli or dry cleaner was going to have 5 cents chopped off the top and sent to Washington.
Few things could be further from the truth. First of all, these changes are already codified in the tax laws, and have been since the tax cuts that precipitated this country’s economic decline were enacted in 2001. Secondly, the dollars you pay to your local merchant represent total revenues, not taxable profits. In between total revenues and taxable income stand the following: Cost of Goods Sold, Selling and Administrative Expenses, General Expenses, Interest Expense, Depreciation Expense, and a host of other costs involved in doing business. Unless, of course, the owner of your local corner deli or dry cleaner has an idiot for an accountant or is still organized as a sole proprietorship rather than an LLC or other entity, in which case he or she should either get a new accountant or pull his or her head out of his or her ass.
Look, folks, this country has hit upon some rather hard times. We all need to pull together to pull ourselves out of the mess. Let the tax cuts expire. It was a failed experiment. Maybe I’ll proselytize about the injustices of income inequality and some proposed solutions on another day, but please, stop listening to apocalyptic blowhards like this Bortz fellow now. He’s wrong, and he’s trying to mislead you.
