Practically Speaking

Tax the rich? Every job I had was because of rich!

Posted by Kyle Prast on Aug. 6, 2010 | 34 comments

Truth, THE ECONOMY, TAXES, Entrepreneurship, President Obama

The Democrats keep talking about taxing the rich as a solution to our deficits and debt. But it isn't that we don't tax enough; it is that we spend too much!

Most Democrats* don't want to extend the Bush tax cuts because they include tax cuts to the wealthy. They also think taxing the rich plays well to the middle and lower class. They ignore the fact that the lowest income levels get a 50% tax increase (the highest increase), and every other bracket increases too, once Bush's tax cuts expire.

Taxing the rich will have a devastating affect on small businesses, employment, and our economy. As Republican Senator Orrin Hatch said, "They can talk about the wealthy all they want, but this is about stopping a job-killing tax hike on small businesses during tough economic times."

It is true: You can't get a job from a poor person. Every job I ever had was because of a rich person--richer than me at least. If you have worked for a small business, I bet it is true for you too. Think about it.

Here is a quick list of my employers:

• Don's Super Value food store - Don owned the franchise. He employed maybe 70 locals and college students. I did cake decorating in the store bakery in my college days.
• Shorewood Village Bakery - This was an upscale, family owned bakery, where I cake decorated after college. They employed about 7 workers. Owners worked along side employees.
   
• Mullenbach's Fashions - A small custom bridal and ball gowns shop, owned by James Mullenbach. This was my 1st full time job after college where I was one of 7 workers. Little did I know the experience gained there would prove invaluable in my real job years later at Milwaukee Ballet.
   
• T.A. Chapman's Department Store - Golden Thimble Fabrics. Chapman's was an upscale department store, owned by a very wealthy Milwaukee family. They employed a few hundred people.
• The Snow Goose - a boutique on Jefferson St. where I designed and created custom clothing. I was the only employee. This business went under in less than a year.
   
• Elna Sewing Machine sales at Mary Lester Fabric Stores. The sewing machine sales area within the store was owned by a sole proprietor. I was one of maybe 3 employees besides the owners. They went under also.
   
• Milwaukee Ballet Costume Department. Here you might say, that is a non-profit arts job, not a small business. True. But if you look in the back of any program for the list of donors, you see if it were not for the donations and grants of wealthy patrons, the show would not go on. While I was there, the ballet company nearly went under several times.

So you see, had it not been for the rich, I wouldn't have had a job. Some of the rich business owners were barely making it themselves. Some worked right along side the employees. Some filed their business income on their personal tax return--they would be hurt by the Obama tax increase on incomes above $250,000.

In the case of dress designer Jim Mullenbach, no one worked harder, or longer hours than he did. Often he worked so late into the night, he would sleep on the cutting table after getting the work ready for the handful of employees for the next day. He knew if he didn't get the work done at night, his workers would have nothing to do the next day. Time is money and no owner can afford to have his employees sit idle while the owner prepares their work.

Most small business owners I know (20 or fewer employees) and the self employed, work long hours and endure times of plenty and famine. Plenty often means so much work that they have to work a 70 hour week. Small business owners hesitate to hire extra help because they don't know if there will be enough future work. That would be the famine--long stretches of little or no work coming in. They deserve the fruits of their labors--profits--without this new threat of higher taxes. ObamaCare taxes heaped another burden on these employers.

Obviously, none of the Liberal/Progressives spouting tax the rich understand the entrepreneur/small business owner and how they struggle to maintain cash flow and payroll. Maybe that is because they have so little private sector work experience.

Why do we care about small businesses? Because they create most of the jobs. The government defines small businesses as 500 or fewer employees. Until the recession and Obama's Stimulus, small businesses employed over half the workers in the U.S., about 60.2 million. Those 20 or fewer employers accounted for 1/3 of those workers--20.6 million. (Stimulus drastically increased the number of government employees--a drain on the economy.) The government Small Business Administration statistics web page tells us:
 

• Represent 99.7 percent of all employer firms.
• Employ just over half of all private sector employees.
• Pay 44 percent of total U.S. private payroll.
• Have generated 64 percent of net new jobs over the past 15 years.
• Create more than half of the nonfarm private gross domestic product (GDP).
• Hire 40 percent of high tech workers (such as scientists, engineers, and computer programmers).
• Are 52 percent home-based and 2 percent franchises.

Small business job creators are important. The key to turning our economy around is not increasing the tax rate on the rich or anyone, it is reducing the tax burden on employers and workers.

Next time someone says tax the rich as a solution to our red ink, think of what that means to the workers, the ones who were hired by those rich. That worker just might be you.


*Democrats are betting that ending tax cuts for the rich..."Republicans say the tax cuts are critical to bolstering a feeble economic recovery. And with unemployment at 9.5%, even some Democrats are queasy about raising taxes on high earners -- a category that includes many small-business owners -- when policymakers are trying to encourage them to create jobs."
Six Months to Go Until The Largest Tax Hikes in History

Majority of Small Business Sector Facing Higher Taxes Under Obama Plan

Links: 

Brookfield7, BetterBrookfield, Vicki McKenna, Jay Weber, The Right View Wisconsin, Randy Melchert, Mark Levin, The Heritage Foundation, CNS News, Breitbart BigGovernment