Tag Archives: Recession

News

Did Obamacare really provide a tax cut for small businesses?

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Check out this AP article. (H/T Michele Bachmann)

Excerpt:

When the administration unveiled the small business tax credit earlier this week, officials touted its “broad eligibility” for companies with fewer than 25 workers and average annual wages under $50,000 that provide health coverage.

[…]Lost in the fine print: The credit drops off sharply once a company gets above 10 workers and $25,000 average annual wages.

[…]Consider small businesses: “The idea here is to target the credits to a relatively low number of firms, those who are low-wage and really quite small,” said economist Linda Blumberg of the Urban Institute public policy center.

On paper, the credit seems to be available to companies with fewer than 25 workers and average wages of $50,000. But in practice, a complicated formula that combines the two numbers works against companies that have more than 10 workers and $25,000 in average wages, Blumberg said.

“You can get zero even if you are not hitting the max on both pieces,” Blumberg said.

[…]Hoffman, the furniture store owner whose business missed out on the credit, says he understands that lawmakers writing the health care legislation had a limited amount of money to work with. But his company’s premiums rose 15 percent this year, and it’s a struggle to keep paying.

To get the most out of the new federal credit, Hoffman said he’d have to cut his work force to 10 employees and slash their wages.

“That seems like a strange outcome, given we’ve got 10 percent unemployment,” he said.

So, the government is actually paying businesses to NOT HIRE EMPLOYEES and to NOT RAISE SALARIES. That’s the only way small businesses can get the tax credit.

Michele writes:

Unfortunately, this bill will only discourage small businesses from raising wages and/or hiring more employees.  The business owners and employers in Minnesota I’ve met with all have said one thing: the uncertainty of the newly passed Health Care bill is keeping them from hiring and expanding.

Businesses are run by people who put their own skin in the game by risking capital to try to make a profit. That capital is often borrowed from family, friends or banks. And when business owners see that government is passing laws that take away the decision making power of the business owner and give it to government bureaucrats with no skin in the game, business owners get frightened – they are taking all the risks but the government is making the decisions. And government isn’t as good at making decisions for a business to avoid losses as the business owner is.

So even though Obama spends trillions of dollars, bankrupting the next generation of taxpayers, it can still be the case that unemployment increases. He’s killing the economy with his meddling – just the same way as interventionists like Hoover and FDR did during the Great Depression. When business owners see that the rules are changing under them because of state intervention into the economy, they just don’t have the confidence needed to expand their businesses, hire employees, or raise salaries.

And don’t forget that the money for the “tax credit” is being taken from your children, who will eventually have to pay for all of Obama’s spending.

News

Fiscally conservative Canada campaigns against global bank tax

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Canadian Prime Minister Stephen Harper

Story from Breitbart.

Excerpt:

Canada will “resist” a bank tax, Industry Minister Tony Clement said Tuesday as ministers fanned out across the world to raise opposition to the proposal for avoiding another financial crisis.

“Canada is, and will remain, opposed to a tax that would penalize financial institutions that remained strong and prosperous while many of the world’s banks failed,” Clement told a press conference with Foreign Minister Lawrence Cannon.

“We will resist the bank tax here at home and we seek to convince other heads of government of the virtue of our position,” he said as senior ministers echoed his message in Mumbai, Beijing and Washington.

Attempts to reach international agreement on coordinated bank taxes at last month’s G20 and IMF meetings ran aground.

Nations including Canada and Brazil, whose banking sectors emerged largely unscathed from the financial crisis, objected to the plan, favoring higher capital reserve requirements instead.

[…]Clement said the bank tax would “encourage risky behavior” if it is used to create a bank bailout fund and “reward bad behavior” of those institutions responsible for the recent financial crisis in the first place.

As well, it would “unduly burden” Canadian banks and put them at a “competitive disadvantage” to other financial institutions.

“This tax would reach into consumers’ pockets and punish our financial institutions which have taken precautions to avoid the very turmoil that is afflicting other parts of the globe,” Clement lamented.

Stephen Harper is a fiscal conservative. He knows that low interest rates are bad, so he created tax-free savings accounts to get people to work and save their money. And he knows that people who buy houses need to be able to pay for them, and his banking policies reflect that. There is no Democrat-sponsored “Community Reinvestment Act” in Canada to allow the socialist mafia (ACORN) to pressure private banks into making risky loans. And there are no Democrats taking political contributions while blocking attempts to investigate Fannie Mae and Freddie Mac. And there are no bank bailouts!

The Conservative Party of Canada keeps its banking sector squeaky clean. They even plan to cut spending! And the Canadian people support fiscal conservatism. That’s why they aren’t facing the mess we are facing. And they have lower unemployment, too – 8.1% compared to our 9.9%. Canada is kicking our tails! How can this be? How did they manage to elect an economist, while we are stuck with this perpetually-bowing flibbertigibbet and his legions of bloviating boffins, each more corrupt and incompetent than the last? Democrats have no real-life experience! They just had rich parents!

Look at this article from the Financial Post.

Excerpt:

“In Canada, there were no taxpayer bailouts of financial institutions, so we believe there is no justification for levies on banks and financial institutions,” Harper said at a news conference following meetings with European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy.

[…]Canada and the EU are in the midst of negotiating an ambitious trade deal. The Comprehensive Economic and Trade Agreement (CETA) was launched at the 2009 Canada-EU summit and to date, three rounds of negotiations have taken place. There are at least two more to go over the next year.

The deal will give Canada greater access to the markets of the EU’s member countries and will strengthen an economic relationship that is already worth $75-billion in trade. The EU is Canada’s second-largest trading partner after the United States and is also Canada’s second-largest source of direct foreign investment, putting $162-billion into Canada in 2009.

This is grown-up fiscal policy. Government should stay out of the mortgage-lending industry, and sign as many free-trade deals as possible. The exact opposite of what the Obama administration is doing.

News

Why don’t governments cut spending during tough times?

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Check out this article from USA Today.

Excerpt:

Many states and cities coping with hard times are asking residents to open their wallets for the latest fashion in taxation — the temporary tax.

Governments are raising taxes for a specific period of time and promising the hikes will go away when good times return.

Some big temporary taxes:

•Arizona voters decide today whether to approve a three-year sales-tax hike. Republican Gov. Jan Brewer pushed to raise the sales tax from 5.6% to 6.6%, dedicating two-thirds of the new money for schools.

•Kansas hikes its sales tax July 1 from 5.3% to 6.3% for three years. The tax is designed to prevent cuts in education and social programs.

• Mobile, Ala., boosts its sales tax by 1 cent for 16 months starting June 1. The combined state and local rate will be 10%. Goal: avoid laying off police and firefighters.

A half-dozen other states are eyeing temporary taxes. So are many cities and counties, including King County, Wash., which includes Seattle.

Temporary taxes are phenomena seen during recessions, says Curtis Dubay, a tax expert at the conservative Heritage Foundation. “You don’t hear about temporary taxes when money is flowing into the coffers.”

The problem is that these taxes rarely go away, he says. “Once politicians get their hands on revenue, they won’t give it up,” he adds.

I noticed that Stan, a resident of Arizona, wrote about an alternative to temporary tax hikes in this post.

Excerpt:

Let’s see what the official 2010 budget says. Hmm. Well, they’ll be paying back $50 million in Federal Stimulus money. Odd. There is a line item for an additional $40 million in “new private prison beds”. Right … so our criminals are more comfortable. Got it. Interesting. There is a “Department of Racing”. Apparently the Department of Racing regulates the Arizona parimutuel horse and greyhound racing industry. Oh, now this is funny. The Department of Economic Security has a budget of $546 million. Perhaps we ought to fire them, eh? While we’re at it, perhaps we ought to take a real hard look at the Governorʹs Office of Strategic Planning and Budgeting and their $2 million. I’m thinking they’re not doing their job. Oh, I suppose there is no way around the $2 million we’re spending on the Board of Cosmetology. I mean, what could be more important to Arizonans than beauty treatments. Oh, yeah, we have to regulate that carefully. There’s another $4 million on a “Telecom for the Deaf Fund”. I know … that’s a good thing … but is it more important than public safety? Is that really the job of the government? And the fact that we’re spending more than $13 million on a “Department of Gaming” (with another $74 million to the Arizona State Lottery Commission) is troubling to me all on its own.

Allegedly something around 60% of our budget is already spent on schools and public safety and health care. Fine. But is anyone looking at what that money is going toward and how to cut waste? Trust me. There is lots of waste.

Overspending governments always market tax hikes as ways to say essential services or “compassionate” social programs. Why can’t they just cut some wasteful spending, instead? Is that so hard?