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  • From: Clansgian AT wmconnect.com
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Scary as h*ll
  • Date: Fri, 17 Oct 2008 10:43:51 EDT


> >If you're in business, you deduct your costs before you pay your taxes.

This thread is humongous long and I'm not likely to read all of it to see if
someone responded to this, so if this is a repeat of what someone has already
said, please excuse:


It's true that you pay taxes on the amount your business makes after you
deduct costs, but many federal tax breaks are triggered into effect on the
GROSS
amount of the business. Obama's 'businesses making less than $250,000' is
this
sort.

It's nothing new, nothing uncommon. For example if you have self-employment
income of more than $400, you must file a form SE or SEez. That obligation
is based on the GROSS amount you took in. If you take in $10,000 but your
expenses were $9,900, you still have to report and account for the $10,000,
although you only pay taxes on $100.

Like that, Obama has a tax rate in mind for businesses that "make" over a
quarter million, but the world "make" here means "gross". If you have a
business
that grosses $300,000 and the expenses were $250,000, you pay the higher tax
rate on the $50,000 profit. If your business grosses $240,000 and your
expenses are $40,000, you do not pay the higher rate on the $200,000 profit.

Why? It actually makes some sense, in a twisted sort of liberal way. If you
are paying out $250,000 in expenses as in the first example, chances are that
most of that money goes to payroll. You are using people's labor to make a
profit in your business. What Obama views as your not taking adequate care
of
your employees, he proposes to tax some of that money for social programs.

I don't entirely disagree with this.


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