Obama Tax Plan a Frontal Assault on Entrepreneurs

http://pajamasmedia.com/blog/obama-tax-plan-a-frontal-assault-on-entrepreneurs/

by SarahToton • 18 years ago

16 37 18 years ago

uuilly• 18 years ago

I was wondering about this. When I first heard his tax plan I didn't think much one way or another. Then I thought, wait! I'm trying to raise money from the super rich!

ardit33• 18 years ago

Usual republican fearmongering. as Marc Cuban said "No self respected businessman/ entrepenour wakes up a day and says I am not going to build a business and try to make millions b/c my marginal tax rate is %35 instead of %25".

If that extra money taxed gets used for something useful such as building High Speed Rail in California, or jump-starting alternative fuels technology, then it is a win win situation for the economy and for people.

If that extra tax money gets spend in useless wars such as the one in Iraq, that is plain economic destruction.

That's why picking the right president is so important, and makes the huge difference between economic prosperity, or economic destruction.

While I may say, that Bush's tax cut, and flood of money (with low interest rates), left the rich flush with money, who invested in short-sighted and useless economic destructive market. For every house that is in foreclosure, every house/street/building that is left half build, that is all economic loss to all.

While it is a good idea to let markets decide private investments in the long run, sometimes it is necessary for the government to step in, and invest in things that are not profitable in the short term, but have huge positive economic impact in the long run. And if pinching some money away from the private market is necessary, so be it.

anamax4• 18 years ago

> for something useful such as building High Speed Rail in California

According to http://www.cahighspeedrail.ca.gov/images/chsr/20080121152955... , the system can't pay back the bonds that are currently on the ballot, bonds that cover less than half of the projected construction costs. Since such projections almost always overestimate revenues and underestimate construction costs, the real gap will be even larger.

Some of the tricks used to get the revenues up include high-rises in Fresno and other central CA cities over the train station. That makes a lot of sense in NYC where land is at a premium, but Fresno?

There's a reason why the ballot statement says that the operating costs "[operating] costs would be at least partially offset by revenue from fares paid by passengers" and doesn't mention interest and principle.

I can't find a breakdown for the operating costs on this version of the project. The last time I saw such a breakdown, the projected salaries and benefits of the folks running the trains exceeded the projected revenues....

If high-speed rail in CA made financial sense, why wouldn't a for-profit enterprise be interested in doing it?

newt0311• 18 years ago

Another point on the health care bit. At present, medicare and medicaid spend a combined > $600 billion and rising at 6% annually. In their market (medical insurance) they are the largest players. Absolutely. As a result, other insurance companies structure their plans within those offered by these two entities. They have to, if they want to offer supplementary services to these large markets and have any influence with hospitals (hospitals and doctors do not want to work with multiple completely different systems of paperwork unless they have to).

If we want real innovation in the health care sector, the personal tax deduction will help but ultimately, we need to get rid of these two bloated freaks. Too bad that that is one sacred cow that no politician is going to touch with a 9 foot stick.

notauser• 18 years ago

If your $600bn figure is correct...

US incomplete health care is $600bn/305m people = $2,000 per person.

UK national health service is $120bn/60m people = $2,000 per person.

The US needs a really hard look at why it is getting such a bad deal. You already have socialised medicine (anyone can go to the ER and it gets amortised over private insurance patients - essentially taxing the rich) but that cost is on top of the $2k/person you pay for an inferior national program!

anamax4• 18 years ago

Actually, everyone in the US is covered, there are just different plans. The gap is wrt insurance. The uninsured have "free" (read taxpayer supported) options. (Yes, there are treatments that aren't covered in those options, just as there are in every system, including those in "universal healthcare" systems.)

Note that about half of the insured are insured through US govt programs. Interestingly enough, the cost of those govt programs is about the same as the cost of the private programs that cover the other half of the insured. And, the results of those govt programs is not better.

If you're going to argue that the US govt can do better than the private sector, you should explain why it doesn't. Same cost, same results. Why will making it universal change any of that?

Better yet - work on the US govt programs and then open them up at cost. When they're better and cheaper, folks will flee the private system. Until then, why should we believe that they will be any better than they are?

mkn• 18 years ago

I tried in vain to find a valid argument in this article. Instead, it was nearly wall-to-wall non sequiturs and faulty generalizations.

There's some arm waving about how increasing the income tax on high wage earners will act as a disincentive to angel investors. Am I misunderstanding tax law, or aren't capital gains (e.g., from startup investments) separate from income for tax purposes?

Then, when Obama's "socialized medicine" plan would actually help, the author rails against it because it has 'failed everywhere it's been tried.' (Except where it has succeeded. And also, the dismal failures mentioned are anecdotal scaremongering.) The solution is held out in front of the author and he rejects it on unrelated, partisan grounds!

Maybe he makes sense to himself, but his oversimplifications haven't adequately made the case for the article title or his two supporting gripes.

petercooper• 18 years ago

When he says Obama's plan is "putting the cart before the horse" I think he means that it's silly to tax us on the money we earn that we'll eventually invest with and not on the money we invest ONCE we're rich.

I'm not rich, but let's assume I'm on track to become so by way of my ever increasing income. Obama would take more of the income I'm using to build my fortune, leaving me less to invest later on. Lower income taxes would give me more to play with later on, and since I'll already be quite well off by then, paying tax on my capital gains doesn't really bother me.

Personally I don't think this is a great argument and I am in support of Obama's plan, but I do see its point. It's a very long-term argument, and I think that if far smaller investors can use the capital gains 0% tax (such as entrepreneurs who self-fund) then it's an amazing idea. But if small self-funding entrepreneurs cannot take advantage of the 0% tax on capital gains in their own businesses, I'd probably agree with the author as it serves only to unfairly placate the rich.

thinkcomp• 18 years ago

This is simply ridiculous. The author clearly hasn't filled out IRS Form 1120S lately, or any other tax form that actually might be applicable to entrepreneurs. Furthermore, I don't really care if angel investors and venture capitalists have to pay more taxes on their successful investments. There's a difference between investing and inventing.

In regard to health care, adding more tax incentives (read loopholes), thereby increasing the complexity of the laws, and making the market for health insurance "more competitive," when the lack of competition is not the problem in the first place, will make matters far worse. Health care is not a commodity that lends itself to a market. It's a human right, which lends itself far better to [competent] government.

A while back I wrote about some of these issues here:

http://www.aarongreenspan.com/essays/index.html?id=11

jobeirne4• 18 years ago

Health care is not a human right. It is not my obligation to make sure that you survive.

maxklein4• 18 years ago

Humans are successful because we don't leave our dead, sick, wounded or crippled behind. We won because, instead of doing like other animals and letting the weak or old die alone, we continue to help them and learn from them.

We help other humans who are too weak to be helped. It's part of our primal human nature. When you say that it's not your obligation to make sure I survive, you are saying you want to try it the animal way. The way that failed.

qwph3• 18 years ago

Health care is not a human right.

You may want to read Article 25.1 of the Universal Declaration of Human Rights before reconsidering that statement.

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

http://www.un.org/Overview/rights.html

einarvollset• 18 years ago

Anyone truly believe that the change from "less taxes for people making < $250K (read: entrepreneurs)" and "if you create value we won't tax you on that" (read: successful entrepreneurs) is going to _dissuade_ anyone from trying?

This is the same "as long as you make the rich richer they'll spill some on everybody else" thinking that, frankly, has no actual merit in fact (Before you downmod me on this, lookup the some actual data!)

This guy should read a biography on Henry Ford.

Dilpil• 18 years ago

Even if the article is accurate, the alternative is McCain.

icey• 18 years ago

On one hand, this seems like it's linkbait to a poorly researched article. On the other hand... see hand number one.

davidw• 18 years ago

And it's also very much politics, something that doesn't belong here. To properly discuss the candidates, parties, and whatnot, you can't stop at their economic policies that might affect people here, but have to consider foreign relations, civil liberties, and a slew of other things that would just bog this site down. Back to hacking.

tptacek4• 18 years ago

The person who wrote this article has never tried to obtain independent health insurance.

For a family of 4, private health insurance with a typical deductable costs something like $1200 per month. That's half a reasonable mortgage, or 3 times the monthly cost of two parents each commuting 50 miles a day on $4 gas, or 3 concurrent car lease payments. Over 60% of Americans today are covered by their employers, who in addition to accessing lower-rate group plans, cover some or all of this expense.

But that's not the biggest problem. The biggest problem is that out of the 163,000,000 people that would need to switch to private health insurance in these schemes, a huge portion of them will be unable to access a competitive plan. Private health insurers can and do decline coverage for a myriad of reasons. My daughter had a (drug reaction) seizure when she was 3. NO COVERAGE. A friend's wife had a minor women's health issue. NO COVERAGE.

Advocates for private health insurance are quick to point out that they'll work with states to set up "last-resort" health insurance coverage for these people. Those advocates don't understand what the word "competition" means. Those "last-resort" plans already exist (at least in Illinois, Michigan, and California), but they're far more expensive than Blue Cross or United. Insurance works efficiently by creating pools of shared risk. What happens to the plans that get all the "risky" people?

With a couple obvious exceptions, my sense is that no country loves its health insurance system. Canadians bitch about theirs, British people bitch about theirs. But our system is an international joke. We pay more than everyone else, we shift the burden of those payments to the least convenient places in our economy, the average patient receives poorer care, and we still manage to bankrupt people with the system at random intervals.

Obama Tax Plan a Frontal Assault on Entrepreneurs

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