Redstate

There is another factor to consider.

If Kerry were president, would you trust him to keep his word about the $200,000 cutoff?

Remember, this is the same man who carries a magic hat from a nonexistent CIA spook in his briefcase.

It's also the same man who applied for a Purple Heart from a minor self inflicted injury, when he later wrote in his diary that neither he nor his unit had been fired on.

It's also the same man who has a "V" for valor showing on his 'Silver Star' dispite the fact that no Valor awards are given for Silver Stars.

In other words, this is a man whose word means nothing.  

also include screwing married couples over the $200K mark? Take away their child credit,too?

Kerry loves only kids of parents under $200K?

And how CLASSIST is Monsieur Kehr-ry that he knew, just by looks that no one in the audience earned over $200K?

Useful in Harry Potter, reading golden tablets, and supplying John Kerry with his talking points.

Yeah, that struck me, too.

He probably noticed that none of them had manicures.

The irony about taxing the rich is when you think, who best in society can dodge taxes?  Because the rich can hire lawyers and accountants, they certainly are best-equipped to dodge tax.  If you're unclear ask John Edwards who dodged paying tax on his $24M in settlements.

Please, lord, let Bush win and then make him pass a FLAT TAX.

The part about listening to your mom "rail against having to pay personal income tax on all the money that went through the business, including that which was spent on capital improvements" really hit home. Been there, done that.

A few years ago I had a partner in a consulting & development business. He summed it up best: "It seems like the better you do, the worse you get raped."

GWB was spot on about the $200K limit effectively targeting small businesses. JFK's response that W is a small businessman "under Republican rules" was an incredibly lame non sequitur.

Small biz owner here myself and was saying the same thing last night.  How many of those S Corp, LLC, and Partnership people are going to continue to allow themselves to report an income of $200k? If Thurston Howell III is elected, how many will restructure as C's and then pay themselves a low salary and let the company lease their cars and pay for their living expenses?  So then not only do they avoid being in the new higher taxed bracket they can do the things that avoid paying corporate taxes as well by taking advantange of the umpteen deductions available. Flat tax all the way, even if its a national sales tax instead of a income tax.  At least that way everybody would get to contribute to the tax base, instead of punishing the people that actually make money to give it to people that don't.

Senator Kerry insisted that his plan would not affect Crowe's Cabinets & Carpentry.  Prior to the incorporation, that is simply not true.

So in other words, since your father finally listened to your mother and incorporated, Kerry's tax plan wouldn't hurt your father's business?

Sort of seems to me that the real lesson here is not "don't vote for Kerry," it's "if you're a business, it makes sense to incorporate."

(No disrespect to your dad intended; my brother's a woodworker, makes his living building furniture and sets and so on. He's probably worked for guys like your father.)

But as a practical matter, it can be one more hassle. Initial fees aren't that bad, but you have to keep registering, hold regular meetings (with minutes), keep regular capital on hand, paying annual fees, issue stock, etc., etc.

Incorporation is a fantastic idea, but not always practical for everyday folks. It's a situational thing. I don't think the only reason to incorporate should be to avoid personal income taxes.

And I add that this is without getting into a discussion of Subchapter S.

I'm no expert on what new rules apply to the business now that they have incorporated, but the incoporation was done for liability purposes more than for tax purposes.  Prior to incorporation, if I or one of my siblings had a party and someone got injured at our house, the business would be liable to whatever awards a lawsuit would command.  So someone gets drunk, trips over a stick, break their nose, and we lose the business over it.  

Mom still has to jump through hoops and spend hundreds of hours figuring out taxes, the tax code still isn't exactly friendly to small corporations -- especially those who don't have the wherewithal to put the money in off-shore accounts and exploit other loopholes like Heinz -- but at least now Crowe's Cabinets cannot be hit in a liability lawsuit.

Having been in a partnership where I paid enormous taxes on money I was never actually paid, I can tell you that it was not fun to be "wealthy on paper".  

But that point notwithstanding, the artifical limit Kerry puts on whom he considers wealthy is ludicrous.  One size does NOT fit all in America.  Earning $200,000 in Pocatello, Idaho is way different that earning that amount in the Silicon Valley.  

Lastly, there is a danger in continuously dropping people off the bottom of the tax rolls, by taxing more people at the top.  We start to approach the old Marxist idealogy of "FROM each according to his ability, TO each according to his need".   Scary.

Just that. Thanks. As they say in journalism school, "show, don't tell."

You showed.

"President Bush pointed out that raising taxes on those who earn more than $200K would necessarily raise taxes on people like my parents; people who certainly do not have $200K to toss around on windsurfing trips, vacations on Nantucket, and elite schools for their kids (believe me), but who are required to pay taxes as though they do."

You make it sound as if your parents are paying taxes on their business's gross, rather than the net.  Small business owners pay taxes like everyone else, on their earned income

You make it sound like it's a walk in the park, they get a W-2, fill out a simple form, and voila, it's done.  

Not that easy, my friend.  Not by a long shot.

For starters, my parents' "earned income" would have been the same money as Crowe's Cabinets' net prior to the incorporation (that means the entirety of my dependence upon them and the majority of my siblings' dependence.  That means all capital improvements come out of what is taxed like personal income (i.e. money that could be used for groceries, school tuition, shoes, etc.).  Initially, on big-ticket purchases (computer controlled routers, vertical panel saws, shapers, expansion of the workspace, etc) the tax man gives a deduction, but the life of the loan often exceeds the life of the deduction thanks to "depreciation."  So in year two, the deduction is less, though the monthly payment is static.  Same in year three.  Same in year four.  Eventually the deduction is gone but my dad is still paying the same amount every month out of what is viewed as personal earned income.  

Again, I'm not an expert on tax law and what all is expected; perhaps one of the business owners who commented elsewhere on this thread could speak to the additional taxes and demands on sole proprietors.  What I can say is that they aren't pretty.

First, I own a business that grosses 320,000 to 380,000 dollars per year.  I first owned it as a sole proprietor and then switched to an S corp.  There are significant differences in tax status compared with being an employee, but they are not so overwhelming as you make out.

First of all, one can expense all equipment purchases up to 17-18,000 dollars per year.

Off hand, the only thing I can think of that takes more than 15 years to depreciate is real estate.  The depreciation of larger purchases, those that can't simply be expensed, usually roughly matches the period of any loan by which the purchases were made. Many venders offer equipment leases with a small, token payment at the end for purchase.  Small business ownership is just not the big tax burden that you make it out to be.