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On 04/15/2012 04:31 PM, Art Deco wrote:
<blockquote
cite="mid:CAB8VJX4t_VCAa6CzXGj3dGUEF7mf_u7Xt-fcAL53RB=wcOoNOA@mail.gmail.com"
type="cite">Despite the Mom-and-Pop label, it is designed so that
nearly half of the tax cut would go to people with annual income
over $1 million, and more than four-fifths would go to those
making over $200,000, <a moz-do-not-send="true" title="Tax Policy
Center"
href="http://www.taxpolicycenter.org/numbers/displayatab.cfm?Docid=3342&DocTypeID=1">according
to the Tax Policy Center</a>. </blockquote>
<br>
That's a little disingenuous. The over $1M tax bracket goes all the
way up, whereas the lower tax brackets have a ceiling. That's like
complaining that the highest paid employees get a better deal out of
a straight percentage raise, on average. Of course they do.
According to the link to govtrack.us that was in the original email
(<a class="moz-txt-link-freetext" href="http://www.govtrack.us/congress/bills/112/hr9">http://www.govtrack.us/congress/bills/112/hr9</a>), here is what the
bill actually does:<br>
<br>
"Small Business Tax Cut Act - Amends the Internal Revenue Code to
allow domestic businesses a tax deduction for 20% of the lesser of
their qualified domestic business income (income effectively
connected with a trade or business in the United States) or their
taxable income for the taxable year. Limits the amount of such
deduction to 50% of the the greater of the W-2 wages (payroll) paid
to business non-owners or the sum of the W-2 wages paid to non-owner
family members of direct owners (i.e., stockholders), plus any W-2
wages paid to direct owners who have a 10% or less interest in a
business."<br>
<br>
It's a straight percentage, with a maximum amount cut (also a
percentage). So of course it will benefit the largest cash earners
the most, but it still benefits every small business. With the
economy the way it is, I can see why they want this. Reduce the tax
burden so that businesses of all sizes can increase profits. This
is a direct boost to the economy, at the expense of some tax
revenue. I don't know if the loss in revenue is worth the possible
increase in businesses bottom lines, but that's a math question,
really.<br>
<br>
Also, limiting the maximum amount to a percentage of wages paid is
one way to create an incentive for creating jobs. The larger the
payroll, the larger the possible tax break. Kind of clever,
actually.<br>
<br>
Paul<br>
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