[Vision2020] Fwd: When BIG is Little

[Art Deco]

 [image: The New York Times] <http://www.nytimes.com/>

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July 11, 2012
Small Is So Beautiful By GAIL
COLLINS<http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/gailcollins/index.html>

Our subject for today is the care and feeding of small businesses.

“I love you guys,” Mitt Romney told a teleconference hosted by the National
Federation of Independent Business. “I love the fact that you’re working
hard to follow your dreams and to build businesses. I — I love you guys. I
love the fact that you’re — that you’re working hard to — to follow your
dreams and to — and to build businesses.”

To summarize: We love you, guys.

And they’re everywhere! *The Small Business Administration defines a small
business as one with fewer than 500 workers, and that’s 99.7 percent of
everything out there. “There are 5.7 million firms with employees in this
country, and about 5.7 million have fewer than 500 employees — rounding
slightly,” said Robert McIntyre, the director of Citizens for Tax Justice.*

It’s sort of metaphysical, when you get right down to it. I am you as you
are me and we are one and we are all small businesses. *Ich bin ein small
business.* No wonder politicians want to get on their good side.

All of this takes us to President Obama’s call for Congress to extend the
Bush tax cuts for families with incomes below $250,000 a year. Most people,
the president said, believe it is wrong to “raise taxes on middle-class
families.” It was certainly a triumphant moment for the administration’s
economic policies. In 2008, who among us could have hoped that four years
in the future, middle-class Americans would be making $250,000 a year?

But Romney called the idea “a massive tax increase on job creators and on
small business.” He also denounced it as “another kick in the gut to the
middle class in America,” thus signaling his determination to broaden the
American middle even further, as well as to call everything the president
does a “kick in the gut” for the rest of this campaign season.

How do we feel about this argument, people? We are not talking about
business taxes, in the normal sense of the word. If we were, it would
quickly become so incredibly confusing that you would be begging me to go
back to the matter of the dog Romney once tied to the roof of his car.

The typical American business owner does not pay corporate taxes. He or she
subtracts expenses from revenues and declares the bottom line as income.
There are many, many advantages to this approach. You can avoid corporate
tax rates, and it’s a lot easier to deduct things. If you’re a baker of
gourmet cupcakes, you can subtract the entire cost of your new $50,000
ovens from your income, right up front, as well as lunch with your best
friend who is also an occasional cupcake purchaser.

“There are rules, of course, but both the rules and the implementation of
the rules are fuzzy,” said William Gale, the co-director of the Tax Policy
Center.

And everybody can get into the game! Including partners in hedge funds and
law firms and investment banks. “Here’s the beauty — each of the hedge fund
principals themselves is a small business,” said Gene Sperling, director of
the National Economic Council. Sperling is a small business himself because
he gets occasional royalty payments for co-writing a few episodes of “The
West Wing.”

This flight to small is so popular that the Congressional Research Service
concluded that if taxes on high incomes went up, it would actually create
more small businesses because more rich people would want to “seek
self-employment because the opportunities for tax evasion and avoidance are
greater.”

Small business growth. It’s what makes America great.

*When the Republicans claimed that capping the Bush tax cuts at $250,000
would hurt small businesses, the Obama administration quickly retorted that
only about 3 percent of the small business owners have incomes above
$250,000. *

Yeah, said the Republicans, but that little slice still represents more
than 900,000 people, and half of all the nation’s business income.

Yeah, said the Democrats, but that’s because of the hedge fund managers and
law partners and movie stars with rental property.

Yeah, said the Republicans, but the high-end sort-of-small businesses will
still cut back on jobs or investment if their taxes go up. Taxes rise, bad
things happen. It’s an article of faith. The Hartford Financial Group said
it did a survey that showed just that, although as Robb Mandelbaum pointed
out in The Times,* only 2 percent of the small businesses surveyed actually
cited taxes as their prime concern. *

We do know these things: Republicans do not like income taxes, even for
very wealthy people. Possibly particularly for very wealthy people. Barack
Obama, who also has royalty income, is a small business. Possibly the only
small business the Republicans do not love.


-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com






-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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