March 9, 2019

The small business tax diatribe remains a Republican smoke screen

This topic resurfaced on right wing talk radio in October 2013.  It then was a
topic on MSNBC.  During the government shutdown, it was used to condemn
the Affordable Care Act, but only through fraudulent misrepresentation.  It's im-
portant to keep in mind that 97% of American small businesses have less than
50 employees each.  Now, in review ...

There are a number of reasons why it's a lie to claim that the rich have to get
richer, in order for jobs to be created.  Firstly, the Bush/Cheney years proved
this to be a lie, in that wealth was being amassed by private individuals, while
unemployment rates skyrocketed.  During the Great Depression, everyone
lost money.  During the Bush Recession, the rich didn't lose dollar value in
their accounts.

Secondly, the personal bank accounts of the rich have nothing to do with cor-
porate retained earnings.  Thus, the health of a business is not dependent upon
the wealth of a Mitt Romney who hided blocks of cash in overseas tax havens.

If corporations don't issue added shares of stock, and if corporate sales don't
 increase, there will be no newly created jobs.  In fact, the individual holders of
disparate wealth who have sent the wealth overseas only takes away from the
circular flow of money, thereby costing jobs.  Making the rich richer in Ameri-
can loses jobs.  Wealth holders such as Romney become the true burden on an
already burdened society.

During the dirtiest presidential campaign in US memory, Paul Ayn Rand Ryan
stated that we have to lower small business taxes,because small businesses are
the job creators.  Firstly, this is a lie.  According to the Bureau of Labor Statis-
tics, small business created no more than 29% of the jobs.  Large companies
created 45% of them.  Ladies and gentlemen of America, your politicians of
the past 32 years have been a pack of liars.


                        The Christmas Season Job Creation Phenomenon

Secondly, consumer demand and disposable income are the only job creators.
If the consumer has no money to spare, no new jobs are created.  Proof of the
fact that increased consumer demand creates jobs is ------- Christmas Season.
Stores hire more people, not because the rich got richer in November, but be-
cause their will be more customers in December.  Case Closed.  The modern
Republicans have been lying to you, all along.

Thirdly, any one large corporation hires more employees than any individual
"small business."  However, Corporate America sent manufacturing and cus-
tomer service operations to low-wage nations.  This is what caused the long-
term unemployment crisis that loomed large in 2008.

Fourthly, there is an ulterior motive in politicians falsely claiming that small
business is the principle job creator in America, and therefore, need to be giv-
en massive tax cuts.  It goes as follows:

Small businesses and billionaires are taxed according to the same tax table,
namely, the Personal Income Table.  This means that, whatever benefit Con-
gress provides for small business, in terms of personal income tax rates, it
simultaneously provides for millionaires and billionaires.  The Republicans
in Congress can pretend to be reaching out to small business owners, and ap-
pear to be all-so-caring, but the reality is that they are doing little more than
serving the interests of the holders of intense and disparate personal wealth.

Why do Republican politicians favor the rich?  Is it ideology?  ANS:  NO.
The holders of wealth have ample amounts of campaign donation dollars.
Favoring the poor isn't good business for a career politician.

In this age of anonymous & limitless lobbyist campaign donations, this type of thing
is an element of Government to the Highest Bidder, in a sneaky ... pernicious ... the
pea & shell game ... way.   The result is that of advancing the Republican doctrine
of selfishness, for the benefit of a predatory few who seek to accumulate obscene
amounts of wealth without any accountability as to how it comes to be accumulat-
ed ... and at whose expense the accumulating transpires.        

                                Let us unveil the deception, step by step

The forms of small business:  They're something one learns during his/her first se-
mester in Accounting and/or Economics.  The phrase, "small business," is the re-
frain of the Republican chorus, as if Republicans really are looking out for the little
guy.  In all honesty, the phrase is used as a diversion, in a Republican con game.

The con game is too blatant for anyone not to notice who attend on a few (hundred)
economics, accounting, statistics, and business law classes, as did the author of this

To start, small business comes in the following forms:  1] a Sole Proprietorship,
2] a Partnership, 2b] an S (or Z) Corporation, and 2c] an LLC (a limited liability
company.)   S Corporations and LLCs are taxed like partnerships. 

An S Corporation works much like a partnership in that the profits or losses of
the business are reported by each of the stockholders.  This means that each
stockholders' share of the profits or losses constitute personal income or loss.
At last count, any one S Corporation can have no more than 100 stockholders.

The advantage of an S Corporation is that it avoids the double taxation corpora-
tions must face.  Double taxation consists in the following:  A corporation first
pays taxes on its profits.  Shortly thereafter, the individual holders of the corpora-
tion's "preferred stock" pay taxes on the dividends received from the corporation.

The amount paid to the preferred stock shareholder is reported as the stockhold-
er's personal income.  Thus, it's only the amount of money which becomes the divi-
dend payout which is taxed twice.

The important features of the sole proprietorship & partnership are that:

1] ... both business types pay the same tax rate as does a private citizen.  That is
    to say, Sole Proprietorship Income is taxed as Personal Income.

2] ... a person owning a sole proprietorship (as well as the persons owning a part-
    nership) are personally liable, without limit, for all of the losses and liabilities of
    the business owned.  In contrast, corporations have limited liability.  This trans-
    lates into the abusive fact that the wealth in the personal accounts of corporate
    managers is never withdrawn, in order to pay for corporate debts & liabilities.

    This explains the gross mismanagement of corporations during the Bush II years.
    That is to say, management can send its corporation into obliteration and never
    have to personally pay for the damage it caused.  Yet, this damaging of a cor-
    poration is known as Breach of Duty of Loyalty.  In as much, the dissolution of
    Ampad and AKS Steel were cases of Breach of Duty of Loyalty on behalf  of
    the Mitt Romney who is known for 180 degree turns of the issues, concerning
    anything that doesn't benefit the wealthy.  In benefiting the wealthy, Romney is
    merely serving himself.

Now, the Republican politicians keep stating that the tax rates of small business
must be lowered.  In reality, the politicians are pushing forth the pressure to low-
er the personal income tax rates of the unjustly wealthy.  Incidentally, the unjustly
wealthy are defined as those who profited from low-waged sweatshop labor, in
violation of the Association of American States' Declaration of the Rights of Man.
Those American States, incidentally, are the nations of the Western Hemisphere. 

The remedy needed is this: 

Create a separate and distinct tax rate for sole proprietorships and partnerships.
Why has not congress done this?  ANS:  The same reason why congress never
afforded to the executive branch of government the line-item veto.  In the alter-
nate, provide tax incentives, tax credits, and tax deductions to small business
that don't give the holders of personal wealth advantages. 

Let us review: 

Congressman QRS allows Congressman TUV to have Pork Barrel Item XY in a
certain congressional bill.  Congressman TUV allows Congressman QRS to have
Pork Barrel Item YZ in the same bill.  Therefore, both congressmen will vote for
the bill, out of selfish motives ... re-election through Pork Barrel enticements to the
politician's constuency.

Now, if the power of the line-item existed in the US presidency, then it would be
possible that one or both Pork Barrel Items would be deleted from the bill both
congressmen supported.  This means that congressional wheeling & dealing would
no longer be a sure bet.

The United States Congress is a lunch room of school children saying things simi-
lar to, "I'll trade you my peanut butter and jelly sandwich for your potato 
chips."  Yet, you keep voting for the childish, hoping that they will give you a bite
of their sandwich.

The wheeling & dealing which helped, in part, to cause the national debt to stead-
ily increase would be non-existent, if the line-item veto existed.  This means that
each congressional member would no longer be able to manipulate a way to geet
pork barrel tax dollars into his/her constituency.  Pork Barrel dollars, at the ex-
pense of the taxpayer, add-up, as in an increased national debt.

Do not be deceived.  There is military spending which is pork barrel politicking.
Such enormous spending is NOT done for the defense of a nation which already
has two oceans and an ocean's gulf heavily protecting it.

The expression used to be, "You scratch my back and I'll scratch yours."  In as
much, Congress refuses to grant the president the line-item veto, so that the mem-
bers of Congress can get re-elected.  In order for them to be reelected, they need
to deliver pork to their constituencies.   This brings us to the reason why congress
keeps the tax rate of personal income and sole proprietorships the same rate:

In pushing for lower tax rates for the unjustly rich, Republican politicians can de-
ceptively act as if they are caring deeply for the small business owner, being that
both people are taxed according to the same tax table.  The politicians support-
ing a lowering of the tax rate of those who unfairly became wealthy scratch the
back of the politicians supporting small business, while simultaneously making
richer those who are already obscenely wealthy.  As a reminder, the obscenity
of their wealth only exists in that they got it unfairly.  After all, common Ameri-
can citizens can't complete with foreign sweatshop wages.  Therefore, present
corporate executives are penthouse thieves.

Numerous American small businesses don't make nearly as much as certain
billionaires.  Thus, the con game isn't easily discernible by those unversed in
economics.  This is want makes it a con game.  None the less, the small busi-
ness owner and the unconscionable billionaire, as well as the rare individual
who made his money morally (without sweatshop wage labor and without
future contacts manipulation, etc).  The Republican ploy is to make the tax
rate a carrot-and-stick game for the small business owner who will not at-
tain to the income level of corporate billionaires who have NOT been pay-
ing their fair share and who have been the ultimate leeches, in sucking the
blood of underpaid workers throughout the world.  Look throughout your
house, car, and clothing ... at the "made in" labels.  How much of your pro-
perty was made in a sweatshop by a low-waged worker?

Then comes the incessant quest for deregulation.  Deregulation is the act of
ridding a nation of the police division which protects its citizen from the cor-
porate abuses of power and financial influence.  Deregulation is the quest of
Republican lawmakers to have lawlessness and disorder prevail.  The only
good economy is a fair economy.