djAdvocate
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Post by djAdvocate on Oct 6, 2012 18:04:55 GMT -5
You can say that without hesitation, but saying something doesn't make it true or accurate. it does if i can back it up with something other than anecdotal evidence. i can.
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 18:07:45 GMT -5
Of course, demand from consumers is needed for a business to survive. To discount that would be foolish. The most successful businesses were founded on innovation. The business owner invented and idea or a process that changed things. To discount the inventiveness, drive and organizational skills required for a business to survive is equally foolish. i think you are missing the point. inventiveness doesn't create demand. THAT is the point. demand is something that exists, and is latent. it is only disposable income that creates demand. if you limit the supply of disposable income, you limit your ability to succeed. you don't see a lot of yacht dealerships or travel agencies in the ghetto.
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susanb
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Post by susanb on Oct 6, 2012 18:16:09 GMT -5
You can say that without hesitation, but saying something doesn't make it true or accurate. it does if i can back it up with something other than anecdotal evidence. i can. Great. I look forward to reading about what percentage of the top 2% of wage earners are absorbing the tax burden of LLC's and how much those people are spending on labor and services. That information would help to back up your claim that raising taxes on the 2% would have no impact on jobs. A claim which you failed to back up with any sort of evidence other than your lack of hesitation.
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 18:16:39 GMT -5
DH and I own an LLC. cool! i own two LLC's, two S Corps, a C Corp, a sole proprietership and an investment company. pull up a chair! ;DSince an LLC is a pass through entity and cannot retain earnings, all of our net profits for 2011 were taxed, even though we only put 20% of net profits into our personal accounts. We re-invested 80% of our profits from 2011 and used them to fund our business in 2012. We had to pay individual taxes on that money, all of that money, even the 80% we re-invested. but you would have to have paid even more if you took it as wages, right? so, effectively you saved 15.3% by not having to do that, which you could then use to invest.The amount our business made put us in the top 1%, but we didn't collect or keep anywhere near that amount in salaries. We will spend every penny of that money in 2012 buying services and making payroll. which in turn, you make money off of. that is not an expense. it is an investment. and let's be honest for a moment- judging by what you said above, you have done very well with it. right?Every penny we are taxed is one less penny we have to employ people or purchase. see, this is where we disagree. i could make precisely the opposite case, but don't mistake this for sound business practice. it isn't. i could say that every penny you spend on your business is money that you will not be taxed on- and that is TRUE. so, it would be EQUALLY true to say that spending money, investing MORE in your employes, for example, SAVES YOU TAX MONEY, which you also would "not be paying". but what makes this absurd is that you don't NEED to spend that money, so you don't. you take it in profit. lucky you. but again, that has nothing to do with the OP, except in one respect, which can be answered in one question: who has done better in terms of income growth in your business: you or your employees?Many small business are LLC's whose owners are deceptively in the top 1% of wage earners. Their businesses are realizing the profits, but the owners pay taxes as individuals because of the pass through nature of an LLC. Unless you have the data on what percentage of the top 2% own LLC's and how many people those LLC's are employing and how much money in services those businesses are consuming, you can't really make accurate statements about the interaction between increasing taxes on that group and employment. i have data on the relationship between income tax rates and job growth. i think that makes the point well enough. if you don't, why?
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 18:20:16 GMT -5
it does if i can back it up with something other than anecdotal evidence. i can. Great. I look forward to reading about what percentage of the top 2% of wage earners are absorbing the tax burden of LLC's and how much those people are spending on labor and services. That information would help to back up your claim that raising taxes on the 2% would have no impact on jobs. A claim which you failed to back up with any sort of evidence other than your lack of hesitation. i have already posted it for ALL wage earners. the LLC owners are part of that, since LLC's, S Corps, and sole proprieterships are "flow through entities". what that data shows is that there is literally now correlation between changes in income tax policy and job growth. if that doesn't apply to you as an LLC owner, i am having trouble understanding why.
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susanb
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Post by susanb on Oct 6, 2012 18:24:56 GMT -5
Actually, all of our employees save one makes more money than DH and I do in salary. They have done much better in terms of income growth than we have. We pay 15% above market on average because there are disadvantages to working for a small business in terms of opportunities for advancement. Most employees also get health insurance and ownership in the company.
In addition, we make a lot of money in the winter months, nearly all of our profit, which we then have to pay taxes on in the summer. If we just invested more in our employees in December, we would have no money to pay them in July, a month when we run at a loss. You say my argument is absurd because we don't NEED to spend that money, but we do. Like many, ours is a seasonal business.
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 18:26:59 GMT -5
Actually, all of our employees save one makes more money than DH and I do in salary. They have done much better in terms of income growth than we have. We pay 15% above market on average because there are disadvantages to working for a small business in terms of opportunities for advancement. Most employees also get health insurance and ownership in the company. good for you. then i have no qualms with you, and i seriously doubt that the guy in the OP does, either- even though we disagree on the economic impacts of income taxes.
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susanb
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Post by susanb on Oct 6, 2012 18:27:53 GMT -5
Great. I look forward to reading about what percentage of the top 2% of wage earners are absorbing the tax burden of LLC's and how much those people are spending on labor and services. That information would help to back up your claim that raising taxes on the 2% would have no impact on jobs. A claim which you failed to back up with any sort of evidence other than your lack of hesitation. i have already posted it for ALL wage earners. the LLC owners are part of that, since LLC's, S Corps, and sole proprieterships are "flow through entities". what that data shows is that there is literally now correlation between changes in income tax policy and job growth. if that doesn't apply to you as an LLC owner, i am having trouble understanding why. I know you are. You seem to think in very black and white terms and you do not seem to be open to sharing ideas or exchanging experiences. Since you are so absolutely right about everything, trying to participate in an exchange with you isn't likely to be very fruitful for either of us.
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 18:35:51 GMT -5
In addition, we make a lot of money in the winter months, nearly all of our profit, which we then have to pay taxes on in the summer. If we just invested more in our employees in December, we would have no money to pay them in July, a month when we run at a loss. You say my argument is absurd because we don't NEED to spend that money, but we do. Like many, ours is a seasonal business. i don't think it is absurd. i am not questioning anyone's business decisions. this discussion is far more general than that. i can't honestly speak to your situation. i don't know what it is, and candidly, it doesn't really have anything to do with the point that is being made. nor does my own situation. i think that businesspeople like us have a tendency to think of profit the way others think of revenue, but they are not the same. i might have a million dollar sale than nets me $0 profit. or, i might have a million dollar sale that nets me $500k in profit. in the first case, the government could be taxing me at 100%, and i couldn't care less. in the latter case, i would care a great deal. so for me, what makes the difference is not taxation, but cost. and since tax is only on profit, i am usually glad that i have the profit to pay it, if you catch my meaning. there are many businesses that don't.
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 18:38:07 GMT -5
i have already posted it for ALL wage earners. the LLC owners are part of that, since LLC's, S Corps, and sole proprieterships are "flow through entities". what that data shows is that there is literally now correlation between changes in income tax policy and job growth. if that doesn't apply to you as an LLC owner, i am having trouble understanding why. I know you are. You seem to think in very black and white terms and you do not seem to be open to sharing ideas or exchanging experiences. i can assure you, madam, that i am all about the grey. i don't see ANYTHING in black and white. anyone here will tell you that.Since you are so absolutely right about everything, trying to participate in an exchange with you isn't likely to be very fruitful for either of us. i am actually trying to understand you, but since you are already convinced that i am not here to learn, then perhaps it would be better, for YOU, to move along. i am prepared to learn something from you, but i am most certainly not going to waste my time convincing you that i am willing to do so. could you do me one favor before you leave? if you think you have already posted an explanation for why higher taxes would reduce hiring for you, please refer me to the post, and i will re-read it. thanks in advance for at least making the effort to explain things to me. i appreciate it, and i am sorry if it didn't show.
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 18:42:30 GMT -5
moderators: if you have any insight into why i pissed this poster off, and what i could do to improve my interactions, please register it here.
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Don Perignon
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Post by Don Perignon on Oct 6, 2012 20:10:55 GMT -5
Case Study: the Concorde SST (SuperSonic Transport). Very few people could afford to fly in it, and it was never profitable (although its manufacture, operation and maintenance "created" many jobs). It is now a thing of the past.
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Post by mmhmm on Oct 6, 2012 20:13:41 GMT -5
I can't see a reason for anger here, dj. People are going to disagree. If we didn't we'd never see anything but sameness.
There are advantages to LLC, S Corp., and Sole Proprietor entities. There are also disadvantages. The business started makes the decision as to what direction to take. Once that decision is made, the disadvantages tag along with those advantages that looked so good in the beginning. That's one of life's nasty little realities, just like taxes, and just like businesses that are disproportionately seasonal. You know going in. These discomforts don't leap on you out of the bushes.
Personally, I agree with you. If there is no demand (or not enough discretionary income to facilitate demand) there is no need for product. If there is no product, there is no need for the business that creates the product, no matter how great that product might be. That, as I see it, is just common sense.
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mmhmm
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Post by mmhmm on Oct 6, 2012 20:17:02 GMT -5
Frankly, susanb, I didn't see the attitude you describe in what dj posted, unless I misread what YOU posted. What I read was two people expressing opinions that differed. That's all I read.
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 20:22:50 GMT -5
I can't see a reason for anger here, dj. People are going to disagree. If we didn't we'd never see anything but sameness. There are advantages to LLC, S Corp., and Sole Proprietor entities. There are also disadvantages. The business started makes the decision as to what direction to take. Once that decision is made, the disadvantages tag along with those advantages that looked so good in the beginning. That's one of life's nasty little realities, just like taxes, and just like businesses that are disproportionately seasonal. You know going in. These discomforts don't leap on you out of the bushes. Personally, I agree with you. If there is no demand (or not enough discretionary income to facilitate demand) there is no need for product. If there is no product, there is no need for the business that creates the product, no matter how great that product might be. That, as I see it, is just common sense. the example i like to use is the airplane and the helicopter, both of which are in DaVinci's sketches. it really doesn't matter how good your ideas are- how incredibly elegant, and pioneering, and creative if there are not at least two other things you need to pull it off: the first is the necessary technology. the horseless carriage was not a very welcome idea using a steam engine. you really needed small gas ICE's to make the idea work. the second is people that can afford to buy the product, and see the need for it. without BOTH of those things, it doesn't matter how creative you are, or how much risk you are willing to take. what businesspeople fail to recognize is that offshoring jobs to China actually undermines the second leg of the stool (the third being the inventor). the two legged stool falls over. i could go on and on about how some industries are currently subsidizing others, and about how that gravy train is going to run dry over time, because the subsidy runs out. but without recognizing the virtuous feedback loop between management and labor, there is really no point of even discussing it.
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 20:24:57 GMT -5
Case Study: the Concorde SST (SuperSonic Transport). Very few people could afford to fly in it, and it was never profitable (although its manufacture, operation and maintenance "created" many jobs). It is now a thing of the past. there are far more examples like that than there are successful products that we see today. and it is constantly evolving. someday, not too soon, the home PC will be a museum piece, as well as the CRT.
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Post by susanb on Oct 6, 2012 21:01:03 GMT -5
I can't see a reason for anger here, dj. . I have not expressed anger. I have expressed that I don't think it is a good use of my time to have a discussion with a particular poster.
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Post by susanb on Oct 6, 2012 21:02:59 GMT -5
Frankly, susanb, I didn't see the attitude you describe in what dj posted, unless I misread what YOU posted. What I read was two people expressing opinions that differed. That's all I read. And here we have two people disagreeing again. Clearly, I see dj and his posts very differently. There seems to be very little room for any perspective outside the dominant opinion in P and M. I lurk here, but rarely post for precisely that reason.
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Post by djAdvocate on Oct 6, 2012 21:08:16 GMT -5
Frankly, susanb, I didn't see the attitude you describe in what dj posted, unless I misread what YOU posted. What I read was two people expressing opinions that differed. That's all I read. And here we have two people disagreeing again. Clearly, I see dj and his posts very differently. There seems to be very little room for any perspective outside the dominant opinion in P and M. fyi, i am not aware of a dominant opinion here. i find this a very diverse group. it is why i enjoy posting here. i could illustrate by using myself as an example, but it seems like you have already made up your mind on the subject, so i won';t bother unless you ask.I lurk here, but rarely post for precisely that reason. susanb- i am listening. please explain to me how it is that higher taxes prevent you from hiring, or, if i missed it, please point me to the post that i missed. i really am receptive to learning, i just didn't see your reply, if you made it.
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Post by susanb on Oct 6, 2012 21:14:06 GMT -5
Since every penny outside of our modest salaries is re-invested in hiring and/or buying services, every penny we are taxed is one less we have to spend on salaries or services.
If our taxes go up by 50,000 that is 50,000 less that will be spent either directly on an employee's salary or indirectly on someone salary through a service. Since we pay ourselves so modestly and are pursuing growth aggressively it is a 1 to 1 correlation. Every dollar we can afford to spend, we do.
And with that, I say farewell to P and M.
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 21:22:26 GMT -5
Since every penny outside of our modest salaries is re-invested in hiring and/or buying services, every penny we are taxed is one less we have to spend on salaries or services. i understand that. but the taxable amount that you have is profit, which is by definition money that is left over after all salaries are paid. therefore, if you were going to use those pennies for salary, they would never have been taxed in the first place, right? now, investment is a different matter- that most definitely is affected. however, this administration has been super duper friendly to investment, giving massive tax breaks for doing it. i know, because i benefited hugely from it.If our taxes go up by 50,000 that is 50,000 less that will be spent either directly on an employee's salary or indirectly on someone salary through a service. Since we pay ourselves so modestly and are pursuing growth aggressively it is a 1 to 1 correlation. Every dollar we can afford to spend, we do. And with that, I say farewell to P and M. ok. thanks for the explanation. for my part, i never use post tax dollars for this kind of expense, although i do sometimes use it for buying equipment, which i then depreciate either completely or on schedule as the tax law allows. and since i only use pretax dollars for labor, the rate of taxation doesn't impact them. i think this is precisely why there is no correlation between top incremental income tax rates and job growth. but i now know that there are people out there that use post-tax dollars for goods and services FOR THEIR BUSINESS, which really is new information for me. it is still puzzling, since the whole idea of having a business is to not let that happen, but i will have to accept it since you say it is true in your case. again, thank you. and i am sorry that i didn't understand your posts earlier. i went back and reread them, and i don't recall seeing anything about labor (aka hiring) in them. but finally, i think you should see an accountant about your situation. you could be taking a lot more money off the table by spending it before it was taxed rather than after.
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Post by b2r on Oct 6, 2012 21:27:32 GMT -5
;D
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 21:29:10 GMT -5
one of my all time faves. but if you are implying that i argue just to argue, you are wrong. that is just contradiction. edit: but now that she is gone, i can add one more thing that i thought she would hate, and that is that her argument was a red herring. since LLC's are flow through entities, you can treat them, and the income which is derived from them, as individual income. therefore, it is absolutely relevant to the OP, in that individual tax rates govern the amount of retained earnings you can keep in the businesses for other purposes. to say that this case falls outside of the general case of "raising taxes does not decrease job growth" is absolutely wrong. a stronger case can be made for retained capital by corporations, since it is no longer a discussion of individual income taxes.
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Post by tallguy on Oct 6, 2012 21:34:41 GMT -5
one of my all time faves. but if you are implying that i argue just to argue, you are wrong. that is just contradiction. No it's not!
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 21:36:00 GMT -5
one of my all time faves. but if you are implying that i argue just to argue, you are wrong. that is just contradiction. No it's not! i like it when he takes time out from the contradiction to explain that arguing is a philosophical form. i am still trying to memorize that bit, but he says it so fast.....
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Post by Deleted on Oct 6, 2012 21:36:06 GMT -5
Re your edit dj, I was going to ask; when they talk about taxing the rich, aren't they talking about taxing personal income? And isn't susanb talking about business profits?
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tallguy
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Post by tallguy on Oct 6, 2012 21:46:04 GMT -5
No it's not! i like it when he takes time out from the contradiction to explain that arguing is a philosophical form. i am still trying to memorize that bit, but he says it so fast..... This part? M: I came here for a good argument! O: AH, no you didn't, you came here for an argument! M: An argument isn't just contradiction. O: Well! it CAN be! M: No it can't! M: An argument is a connected series of statement intended to establish a proposition. O: No it isn't! M: Yes it is! 'tisn't just contradiction. O: Look, if I *argue* with you, I must take up a contrary position! M: Yes but it isn't just saying "no it isn't". O: Yes it is! M: No it isn't! O: Yes it is! M: No it isn't! O: Yes it is! M: No it ISN'T! Argument is an intellectual process. Contradiction is just the automatic gainsaying of anything the other person says. O: It is NOT! M: It is! O: Not at all! M: It is! www.intriguing.com/mp/_scripts/argument.php(And yes, I should have refreshed myself on the video first. It is, of course, "No it isn't!" My bad.)
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 21:48:58 GMT -5
Re your edit dj, I was going to ask; when they talk about taxing the rich, aren't they talking about taxing personal income? And isn't susanb talking about business profits? the OP and my later post about economic growth ARE INDEED talking about individual income, but no- susanb is not talking about "business profits". since she has an LLC the profits flow through to the owners on their 1040 using something called a Schedule K. this is WHY i sincerely believe that this thread absolutely applies to her. if she said hers was a C- Corp, i would have to think about how those entities tread and use retained earnings, which is a subject i am mostly unfamiliar with. my C- Corp has never turned a profit. i can actually REALLY APPRECIATE her pain. if i retain 50% of my earnings, and i am taxed at 40% (a circumstance she probably knows all too well), that only leaves 10% for me (once the taxes are paid). that is not much for anything. it is for this reason that i try to drive down profits as much as possible using as many deductions as i can get away with.
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djAdvocate
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Post by djAdvocate on Oct 6, 2012 21:52:06 GMT -5
i like it when he takes time out from the contradiction to explain that arguing is a philosophical form. i am still trying to memorize that bit, but he says it so fast..... This part? yes. more particularly, THIS part: M: An argument is a connected series of statement intended to establish a proposition.
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tallguy
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Post by tallguy on Oct 6, 2012 21:53:52 GMT -5
yes. more particularly, THIS part: M: An argument is a connected series of statement intended to establish a proposition. Doesn't bear much relation to argument HERE, does it? ;D
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