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socks and cat

Don't know exactly how this works but...

Thank god thank god thank god thank god thank god. Honestly, in the past, who the president is has had almost no effect on my life at all. I've worked simple jobs with free (provided by employer) or easy to pay for health insurance in a small tax bracket that really didn't change even with tax increases. Now that I have a business, the state of the economy and the affordability of health insurance means the difference between losing everything and going bankrupt or continuing to thrive and hire more people and live my dream. For once in my life, the decisions of the person in office can effect me directly. I feel a little bit safer and more secure now.

We got the news from one of my students in class, who checked her blackberry (or some such device) for the results. I immediately began jumping up and down until I saw the disappointed look on my other instructor's face. I didn't realize until that moment that she was a republican. She said to me, "You know, your taxes are going to go up now." My response was simple, I don't care how much they raise my taxes IF they keep the economy from tanking any further. I have no idea if taxes and the economy are linked. Can anyone tell me? But from now on, my primary concern is that the economy remains steady or improves so that people can continue to afford my classes as they can now.

Comments

Then I owe you lunch!
:)
Thanks!!
Wow - the market seems to hate this, but then it's been all pissy and hung over after all that binge drinking ;)

So the question - do you support the new tax plan, even though you will be subsidizing cagekitten's health care?
Of course everything depends on him keeping his word and not increasing taxes on everyone because of some "emergency" or pressing need that he supposedly didn't see before. Such things have happened far too many times in the past.

And raising taxes DOES have an effect on the economy in that the "richer" folks who get taxed more cut back. They don't spends as much (say, supporting your business) or create as many new jobs (or any new jobs if they can't make a sizable profit). It's all linked and both extremes create problems.

For now, I'm in wait and see mode. I tend to be very cautious when it comes to politicians...they all tend to say one thing and then do another. Until he proves that track record wrong, I'm not ready to be excited about anything.

Let's wait and see what REALLY happens before we start jumping up and down for joy...

Edited at 2008-11-05 04:46 pm (UTC)
When your taxes go up to pay for everyone else's healthcare and other social programs, your students will be paying higher taxes as well.

When your students pay higher taxes, they'll have less money for discretionary spending. If they have less money for luxeries, things like pole dance lessons will be among the first cut when they tighten their belts.

So, there is a good chance you'll be paying higher personal *and* business taxes (don't forget you're taxed twice) and will wind up with less income coming in.

If you have less income coming in, you are less likely to be able to afford things for your business. This ranges from buying, for example, a new sound system for the studio, or getting repairs made, etc, to having the money to hire additional instructors or retain all your current instructors.

When you aren't buying these things, those other businesses suffer. You are just one small business owner. Now magnify your expreience by the thousands of small business owners in your area.

That's the basic idea of how higher taxes and more social services affect the economy in a nutshell.

You can argue if you want that "it won't work that way," but at least my analogy explains the basic argument.
Actually, in my experience, students are still buying classes even as their spending goes down. So far the state of the economy has had zero effect on the sales of classes. If they can't afford the larger ticket luxury items like cars, condos and vacations, they compensate themselves by purchasing smaller luxury items like my classes. So only a severe drop in the economy would effect my sales.

And I don't understand why you think I should be taxed twice. My accountant, who used to work for the IRS, has never told me to pay taxes twice on the same income. My bookkeeper has also not told me to do so. And I would think some one that worked for the IRS and does my taxes would tell me if I was supposed to be taxed twice on the same income.
I'm glad your sales have been steady (or growing). I hope it stays that way.

I've had exactly the opposite experience. I have people tell me they can't afford my handgun classes because of their job situation, or their spouse's layoff, etc. Our experiences are just two small data points though.

Just take my explanation as a more "generic" example of the argument of why higher taxes hurt businesses and business owner's then. You said you didn't understand the argument, so I tried to lay it out for you. Even if your business seems to be resistent to the economy, the principles I laid out are the same.

As far as double taxes, I was refering to you paying both your personal income tax plus any taxes your business pays.

What I forgot is that it does matter what kind of business enity you have. If you are a sole propretior, for example, you only pay your personal taxes. I don't know how you are structured.

If you have an incorporated business though, I'm sure you are paying some business taxes in addition to your own personal income taxes at the end of the year. Do you do quarterly taxes with your accountant? Do you pay unemployment taxes for your employees?

The point is, that for an incorporated business, the business itself pays taxes on its income. You might consider that just one of the costs of doing business, but it is less money coming out to you. Then, you as a person pay your individual income tax on the money you receive from the business. Hence the double tax.
I am an LLC, but also a sole proprieter. So I'm paying tax on every penny that comes in (sometimes both state and federal, since classes are considered a retail item), but then write myself a tax free paycheck from the company account.

I do my quarterly taxes on my own, I basically just guess the amount based on what my bookkeeper says I made. And my accountant does them annualy for any adjustments. And I do pay unemployment tax for my employees.
If your company is doing well enough that your taxes are going to go up you are doing a whole hell of a lot better than you have been implying. McCain was going to cut all taxes, but very little; Obama is cutting taxes on people making less than 250,000 by a bit more than McCain, and pay for it by raising the taxes on those who make more.