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These Are the Top 5 Worst Tax Increases Small Businesses Will Face With a Second Obama Admin

Oct. 2, 2012 8:56pm

TheBlaze last week told you about Grover Norquist’s Americans for Tax Reform, a lobbying group dedicated to fighting all forms of tax increases, and their list of the top five worst taxes The Patient Protection and Affordable Care Act (i.e. “Obamacare”) will impose in 2013.

The same group has just released another list, this time detailing what, they say, are the top five worst tax hikes small business owners will face if President Obama is reelected.

Here they are [all block quotes via American's Ryan Ellisand John Kartch]:

Income tax increase

Americans for Tax Reform Releases List of Top 5 Worst Tax Hikes Obama Will Push on Small Businesses in a Second Term

A pillar of President Obama’s re-election campaign is a hike in the top two marginal income tax rates.  By and large, small employers pay their small business taxes using individual tax rates.  If individual tax rates are raised, so are small business tax rates.  The top income tax rate is scheduled to rise from 35 percent in 2012 to 39.6 percent in 2013.  According to IRS data, a clear majority of all small business profits face taxation at this top marginal income tax rate.  For all intents and purposes, the top income tax rate IS the small business tax rate in America today.

President Obama and congressional Democrats claim they are raising taxes on “millionaires and billionaires” but are actually targeting successful small companies.  A new study by Ernst and Young projects that this tax rate hike will kill 710,000 small business jobs.

Death Tax Increase

Americans for Tax Reform Releases List of Top 5 Worst Tax Hikes Obama Will Push on Small Businesses in a Second Term

The death tax in 2012 has a top rate of 35 percent, and a “standard deduction” of $5 million ($10 million in the case of a married couple or surviving spouse). President Obama’s plan proposes raising the rate to 45 percent and slashing the exemption to $3.5 million.

When a family business owner dies, it’s up to the surviving family members to pay the death tax to the government.  Needless to say, many successful, job-creating small businesses simply won’t survive this process. Such families will have little choice but to sell the business (and lay off all the employees) in order to pay the IRS.  Or they will have to pay a small fortune to lawyers, accountants, and the life insurance industry to avoid this fate.

‘Obamacare’ self-employment tax rate increase

Americans for Tax Reform Releases List of Top 5 Worst Tax Hikes Obama Will Push on Small Businesses in a Second Term

Currently, successful small business owners face a self-employment tax of 2.9 percent.  Thanks to Obamacare’s 2013 hike in this tax rate, this will rise to 3.8 percent.  All told, the combination of the income tax hike and the self-employment tax hike will raise the marginal income tax rate on small business profits from about 38 percent today to about 43 percent in 2013.  That extra five percentage points might not sound like a lot, but most small employers have very thin profit margins.  A company with $1 million in profits facing a higher tax rate of 5 percentage points will be saddled with another $50,000 in taxes.

Click here to see the rest of the list.

Follow Becket Adams (@BecketAdams) on Twitter

All photos courtesy the AP.

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Comments (24)

  • exposejesuits
    Posted on October 3, 2012 at 1:12pm

    Know this: the Society of Jesus and its agents throughout this nation are dead set against private gun ownership. Years ago in an article titled “Hall of Shame” printed by the magazine Guns and Ammo, foremost on the list opposing private ownership of handguns, rifles and shotguns was—THE JESUIT CONFERENCE!
    It is time for Rome and her Jesuit minions to leave North America as they have robbed, raped and murdered us for the last 150 years. For if the Jesuit Papacy is successful in disarming every private American citizen, no restraint will remain in place to resist the Company’s impending martial law and subsequent Jesuit fascist military dictator! And we also will have no means to resist the Order’s intended Sino-Soviet-Muslim invasion.
    The three greatest mass-murderers in world history are first Mao Zedong, secondly Joseph Stalin and lastly, Adolph Hitler. All three were trained by Jesuit coadjutors under the guise of being pro-communist Orthodox priests or pro-fascist Roman Catholic priests. These totally depraved sinners, in service to the Jesuit Papacy, DISARMED THEIR PEOPLE and then MASS-MURDERED THEM.
    Shall we suffer the same fate here in North America, the last bastion of Protestant liberty in the world? Semper Fi—always faithful—to the God and Father of the risen Lord Jesus Christ and the supreme law of the land, the Protestant Presbyterian Constitution and Baptist-Calvinist Bill of Rights!

    Report this comment

    exposejesuits  
  • exposejesuits
    Posted on October 3, 2012 at 1:10pm

    At long last, the Black Pope had his Jesuit Fascist infrastructure in place (Department of “Romeland Insecurity,” the Patriot Act, Wall Street Cartel-Capitalist grand theft “Bailout” of 2008, Concentration Camps, etc.). The last and final manipulation of the historic White Middle Class into the “New Right” Jesuit Fascism was to be realized. Enter Barack Hussein Obama! This cretin of Rome is now being used by his White master, Joe Biden, to drive all Whites first to financial desperation. Unemployment is now at least 15% in the major cities and growing. More troops are being deployed to Afghanistan further robbing America of her vital military protectors. Obama has just made an unbelievable statement against the nation’s all-volunteer military—purposely inciting the armed forces against himself and his overt handlers. Semper Fi—always faithful—to the God and Father of the risen Lord Jesus Christ and the supreme law of the land, the Protestant Presbyterian Constitution and Baptist-Calvinist Bill of Rights!

    Report this comment

    exposejesuits  
  • exposejesuits
    Posted on October 3, 2012 at 1:09pm

    We must realize that the Mulatto, alleged American President, Barry Davis Soetoro (alias “Barack Hussein Obama“) is a radical, left-wing, Socialist-Communist “Robin Hood,” a “take-from-the-Whites and give-to-the-Blacks/give-to-the-alien Roman Catholic Latino Invaders” Muslim pawn of Rome. Obama has ties to the arrogantly Black Supremacist, hatefully anti-White racist, “African-American” Nation of Islam cult leader, Louis Farrakhan—a co-conspirator in the FBI’s 1965 murder of Malcolm X. Both Blacks are controlled by Rome through high-level, Illuminized Freemasonry; both agitators are members of “the Craft.” Mulatto Obama attended Mulatto Jeremiah Wright’s hatefully racist, anti-White cult—operating under the guise of a “Christian church”—for 20 years. Barry also has no allegiance to his late White grandparents who raised him, but, as is the case with the vast majority of Mulattoes, fully sides against all Whites in general while aligning with all Blacks in general evidenced by his thieving, socially unjust, legislative policies, i.e., the Health Care Reform Bill and the Hate Crimes Bill.

    Report this comment

    exposejesuits  
  • The Third Archon
    Posted on October 3, 2012 at 12:13pm

    If you click the link you realize taxes “2 and 3″ are just copy-pasted from ANOTHER Blaze article bitching about the Obamacare taxes.

    And as far the 3.8% “investor surtax”–OH NO!!!!! What a massively crushing burden to place on, by and large, the wealthiest people in America. Do you know how the top, say 10% but that’s probably being VERY generous, make the OVERWHELMING majority of their income (unlike the REST of the population)? They do it by OWNING things (specifically capital goods) and COLLECTING RENT for this OWNERSHIP. In the olden days, we used to call this FEUDALISM where a noble collected rent (in the form of crops of course) from his “tenant” farmers in exchange for allowing them to use “his” land. Whereas everyone ELSE actually did, and does, WORK to add VALUE to the product of the economy.

    Report this comment

    The Third Archon  
    • inexiletill2012
      Posted on October 3, 2012 at 2:48pm

      Im a small business who employs 3 people. We are incorporated.
      That 3.8 percent you wine about will affect my employees
      You just dont get the big picture do you ? Its not ALL about what you call the millionaires

      Report this comment

      inexiletill2012  
  • The Third Archon
    Posted on October 3, 2012 at 12:06pm

    “The top income tax rate is scheduled to rise from 35 percent in 2012 to 39.6 percent in 2013.”
    OH GOD–NOT HISTORICALLY (and, internationally comparative) LOW TAX RATES FOR THE TOP INCOME EARNERS!

    Besides which, even at this rate, the capitalist class (i.e. the less than 10% that own the overwhelming majority of wealth producing instruments, i.e. capital goods, of this country) is getting let WAY off the hook–after the first ~1/4 million or so, the rest is taxed at the EXACT SAME RATE is the FIRST 1/4 million. So if you’re a BILLIONAIRE, your effective tax rate (before the myriad of legal, and illegal but easy to do and avoid being caught, ways in which one can avoid paying the full rate, which brings it MUCH closer to 15-20% of total taxable income) for all intents and purposes is (right now) 35%, and MIGHT increase to 39.6% under a second term of Obama. If you are a CEO making $500,000 a year (a pittance to a billionaire, who has AT LEAST, by definition 2000 TIMES as much), you ALSO pay 35% status quo…pretty good deal for the billionaire.

    Report this comment

    The Third Archon  
  • The Third Archon
    Posted on October 3, 2012 at 11:55am

    “The death tax in 2012 has a top rate of 35 percent, and a “standard deduction” of $5 million ($10 million in the case of a married couple or surviving spouse). President Obama’s plan proposes raising the rate to 45 percent and slashing the exemption to $3.5 million.”
    OH GOD–YOU WON’T BE ABLE TO PASS ON MORE THAN $3.5 MILLION IN ASSETS TO YOUR SUCCESSORS. That’s FASCISM! Inheritance isn’t meritocratic anyway–you’d think conservatives, madame and sirs “pull-YOURSELF-up-by-YOUR-bootstraps” (not mommy and/or daddy’s) would be ALL for this kind of thing. But then again, conservatives aren’t exactly RENOWN for their CONSISTENCY.

    Either way, this affects all of like 5% of people, so it’s hardly an issue you are going to win, or lose, a lot of ground on; it just doesn’t MATTER to 95% of people (who DON’T have estates worth $3.5 million or more at ANY point in their life, let ALONE at death and after funerary expenses).

    Report this comment

    The Third Archon  
    • inexiletill2012
      Posted on October 3, 2012 at 1:26pm

      By what right does any government have to take your money (even after all those earnings have been taxed) after you die ?
      Makes no difference if its $ 5 or 5 million. The government has no right to that money.

      Report this comment

      inexiletill2012  
  • 1snake1
    Posted on October 3, 2012 at 10:54am

    Awwwww, poor little millionaires might have to pay their share.

    CAPITAL GAINS ARE INCOME
    TAX THEM AS INCOME

    Report this comment

    1snake1  
    • bamanana
      Posted on October 3, 2012 at 11:24am

      250K is considered a billionaire?? I work for a small company that employs 35 people. The gross income is about 650-675K a yr. The hourly rate starts @$18 with benefits for 25of the FT out of 35 employees. With these rate increases the owner will have to lay off 10 to 15 of us. We had a meeting about this 2wks ago. This man has a high school ed. & built this company from the age of 19. You obviously have bought the 99% hook line & sinker. When the policies of this admn. hits you & they most certainly will then you may be singing a differnt tune if you head is out of your rear by then.

      Report this comment

      bamanana  
    • Stone Cold Truth
      Posted on October 3, 2012 at 12:10pm

      Capital gains is taxed lower than income because the investment money was already taxed as income, so in an effort to make it worth the risk the gains are taxed at a lower level. Otherwise there is no point in investing and then the government would have less to steal, I mean tax. It’s FACT, meaning indisputable truth, that THE MOST $$$ REVENUE the US government EVER TOOK IN was during the “Bush tax cuts.” Other than being a jealous deviant there is no rational reason for “sticking it to the rich.” President Obama IS rich, you know. I wonder if he gave 30% of he and Michelle’s incomes to charity like Mitt Romney? Oh he didn’t. Ever. Not even close. I wonder if he’s ever paid MORE than he should in federal taxes like Mitt Romney does out of the kindness of his heart? … lol no. Doers do. Bull s’ers talk.

      Report this comment

      Stone Cold Truth  
  • PointBreak
    Posted on October 2, 2012 at 11:41pm

    OR we could SAY NO to all of this crap and stop paying taxes – which is our right and the reason the 2nd amendment exists. That would solve MOST of our collective problems including the spying, illegal immigration and governmental life micromanagement. The loss of the family businesses is what bothers me most. You can spend your whole life building something and the family has no choice but to sell it when you die; what’s the point then? I’m going to think long and hard about this one. It may not be pleasant, but it’s the right thing to do and the only way to stop it. Galt’s Gulch here I come!

    Report this comment

     
  • frust@ted
    Posted on October 2, 2012 at 11:16pm

    This article doesn’t mention bonus depreciation. With the downturn in the economy this made it easier for buisness to make capital expenditures and be able to deduct 100% in the current year. Without extra deduction on lower margins i beleive the economy would be in even a bigger slump than it is.

    The problem is most people can’t tell you the difference between cash flow and profit.

    Report this comment

    frust@ted  
    • KURT1010
      Posted on October 3, 2012 at 5:37am

      Also it doesnt mention the tax on automatic depoists….1 % it doest sound like much , but when you are on ss only, it makes a dent…

      Report this comment

      KURT1010  
  • 308forfreedom
    Posted on October 2, 2012 at 10:38pm

    Berneke’s Fed is colluding with obummer to stoke stock prices so when taxes reset on investment incomes govt can reap profits.

    Report this comment

    308forfreedom  
  • drphil69
    Posted on October 2, 2012 at 10:28pm

    Hideous, onerous, job killing tax hikes that destroy small and family businesses.

    Obama wants to OWN ALL OF US.

    Report this comment

    drphil69  
  • Stelex
    Posted on October 2, 2012 at 9:39pm

    I personally have seen more than enough to know that this Pres. is a POS. The argument about respecting the office is BS…..this POS deserves no respect. Personally If I had the shot ……Janet take notice……I would take it. I knew what this man was prior to 2008…..And yet 48% still don’t see……Civil war is coming our way. …..Either that or serfdom……

    Report this comment

    Stelex  
  • skippy6
    Posted on October 2, 2012 at 9:20pm

    Moving forward straight onto the expressway to hell!!!! Spit yourself out of the system, do not follow fools…..

    Report this comment

    skippy6  
  • ALfromVAl
    Posted on October 2, 2012 at 9:07pm

    First

    Report this comment

    ALfromVAl  
  • dealer@678
    Posted on October 2, 2012 at 9:05pm

    My doctor told me today that 19 out of 20 of his white patients are voting for Romney. He then said that his black patients wont talk about it because they are embarrassed of this President. How ya like like poll biotch

    Report this comment

    dealer@678  

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