Matt Yglesias

42 Responses to “Small Business Taxes”

1. Jake Says:
   August 21st, 2008 at 4:30 pm

   One of the other lines is that he lived in a cell for five years as a POW. Kind of unbelievable they don’t recognize the danger of over-using that one. If every response to criticism is a noun, a verb, and POW, they risk turning McCain’s identity into a punchline.

2. Curtis Says:
   August 21st, 2008 at 4:31 pm

   Yup. POW is to McCain what 9-11 is to Gugliani.

   Enter Biden ….

3. Gern Blanston Says:
   August 21st, 2008 at 4:32 pm

   Unless the McCains personally unclog toilets, replace garbage disposals, and shampoo the carpets in their rental properties, theirs is a fully-fledged business with employees (at least contractors) and such. Not that supply side tax cuts are a supremely wonderful idea, but your argument here is pretty weak.

4. Michael B Sullivan Says:
   August 21st, 2008 at 4:35 pm

   Also, is there some reason to believe it’s true that “most” small businesses that would be affected by a raise to the top rate are secondary revenue streams for rich people?

5. cleek Says:
   August 21st, 2008 at 4:35 pm

   if they’re really renting them and not just sitting and waiting to flip, i wonder what kind of tenants a millionaire Senator rents to.

6. cleek Says:
   August 21st, 2008 at 4:36 pm

   if they’re really renting, and not just sitting on them and waiting to flip… i wonder what kind of tenants a millionaire Senator rents to.

7. cleek Says:
   August 21st, 2008 at 4:36 pm

   ok. your comments are broken.

8. Swan Says:
   August 21st, 2008 at 4:46 pm

   What I think the public’s finding out McCain owns 10 or 11 or 12 houses is a good occasion for is noting that our society is living off the backs of de facto slave labor.

   If you go and take a look on any consumer product in your home, you’re almost bound to find the words “Made in China” or “Made in Malaysia” or “Made in [some other Third World country]” printed on it somewhere. These people get paid virtually subsistence wages– and a total rip-off for a First World worker– to work under absolutely horrible conditions, live in a hovel in East Asia, and die of treatable diseases. Their bosses treat them like rats and dominate their personal lives. Basic protections in America, like pregnancy leave, are forbidden in those places. Any time you read about an ancient civilization like the Romans and how they profited from their slaves, you might as well walk up to a mirror and take a good look in it, because you are the exact same thing. These industries keep the rich rich, and we regular people get all our stuff perhaps at a slightly cheaper price– or maybe not (maybe the rich just tell us that’s how it works out so that we won’t complain about it). We take our bribe and we keep our mouths shut. If we ever ask about it, we’re told some absurd answer like that the Third World people deserve it or that it has to be this way. Or we’re absurdly told that the workers in those factories are lucky because they have jobs and other people in those countries don’t! Imagine that idea– being lucky to work like a slave!

   The people who most insist on these lies to us, or most insist on believing them, are a bunch of middle-aged Republican white guys who wear suits and work in air-conditioned offices for tens of thousands of dollars a year, and convince themselves that they’re stuff, working class people while they check up on their stocks in The Wall Street Journal and on their Fantasy Baseball teams each day. Well the facts are, maybe if some more money could come into the countries (like through higher wages) where the real working class people are working to produce your T-shirts, appliances and furniture, it would spur more development, and all the unemployed people there would be able to work at jobs like selling retail stuff to their countrymen.

   It’s time for real American working people to speak, think, vote and act in solidarity with working people all across the globe instead of continuing to let McCain’s people divide and conquer us like we’re a bunch of stupid rats.

   Of course, right now Americans don’t have realistic options besides buying things that are made in sweatshops– and we don’t even want to relocate all these industries to America, either (what would be better is if we just made it a condition of selling consumer products in the U.S. or having any offices of investments in the U.S. for corporations with this kind of money to pay their foreign workers a U.S. mandated minimum wage). But we definitely can stop talking and acting as if we like and accept the McCain-like plutocracy, and we can start looking for home-grown solutions to giving money to the rich. We can promote starting backyard gardens (or buying plots of land specifically for crops) instead of paying so much for corporate food, and we can start DVD-sharing co-ops with our social networks (Think how many friends you and your friends have, including on MySpace or on Friendster! Just put a limit on how many DVDs each person can borrow a month, get a geek to set up a website to manage it, and you can save a money from at least down-grading your NetFlix memberships to cheaper membership packages). The answers are out there, and we just have to reach for them– and if we don’t, we’re culpable. But if we do, then triumph is inevitable.

9. The Other Steve Says:
   August 21st, 2008 at 4:59 pm

   The reason why you have investment property as a wealthy person is to time shift your taxes. Investment property is deductible. 1/27th of the value of the property each year from your main income.

   When you sell the property, you have to pay taxes. But it’s capital gains tax, not income tax. So you pay 15% instead of the 30%(or whatever) over all those years.

   BTW, did you know John McCain was a POW in Vietnam?

10. McKingford Says:
    August 21st, 2008 at 5:01 pm

    Oi!

    Taxes are levied on profits, not revenue. Salaries are a tax deductible cost.

    So when the right wing smear machine talks about a “job-killing tax hike” they are, as usual, talking out of their asses. If you plow additional revenues into new jobs, you get new tax deductions. The money left over (ie. profits) are what is taxed. So you can raise taxes as high as you want, and it shouldn’t make the slightest difference in the economic viability of hiring more workers.

    Please kill this meme.

11. skiddie Says:
    August 21st, 2008 at 5:07 pm

    Cleek brings up a good point. A landlord is an odd side-job for an elected official. I sure hope McCain’s not receiving substantially higher-than-market rents from his tenants (who happen to be lobbyists). Because that would surprise me.

12. fostert Says:
    August 21st, 2008 at 5:10 pm

    “theirs is a fully-fledged business with employees (at least contractors) and such.”

    Huh? Rental properties rarely require more than 15 man-hours of work per year. That’s not my idea of a full fledged business. Here out West, landlords rarely do any maintenance other than shampooing the carpets every three years and painting the walls every ten years. And many landlords won’t even do that. Fixing a garbage disposal? Fat chance, you’re on own, sucker! I have ten years of renting out here and only once has a landlord done anything to fix anything. And I had to call the Health department on him and have them threaten to condemn his property if he didn’t fix the leaky roof. The leak was so bad that there were mushrooms growing in the carpets (really, it was disgusting). I now own my house and a don’t do much more maintenance than when I rented. The only difference is that I actually keep on top of the maintenance, rather than let the next renter do it.

13. James Robertson Says:
    August 21st, 2008 at 5:34 pm

    Umm, Matt – walk outside there in DC, where you live. See the various small restaurants and shops that aren’t chains?

    Are you really as removed from reality as this post makes you sound?

14. pseudonymous in nc Says:
    August 21st, 2008 at 5:49 pm

    is there some reason to believe it’s true that “most” small businesses that would be affected by a raise to the top rate are secondary revenue streams for rich people?

    Sched Cs from people in the top income brackets? They’re mostly hobbyist tax sinks or secondary revenue schemes (i.e. book royalties). If they were being run as small businesses, the entity would be incorporated rather than the earnings listed as income.

15. pseudonymous in nc Says:
    August 21st, 2008 at 5:54 pm

    See the various small restaurants and shops that aren’t chains?

    Yeah. They’re presumably incorporated, since they employ people, have premises and sell tangible goods. As opposed to, say, a writer who lists his freelance gigs on a Sched C and then gets to deduct pencils, coffee and shoulder massages as expenses in an attempt to declare a profit of $20 to the IRS.

    Fuckwit.

16. Matt Olson Says:
    August 21st, 2008 at 5:58 pm

    While I usually agree with what I read here, you are wrong-wrong-wrong on this one. Any revenue for an S-Chapter corporation is counted as income for the owner.

    Most overhead is deductible, but still, if a company (like the one that employs me) with $2,000,000 in revenue gets hit with a $40,000 tax hike, that’s an employee we can’t hire, a 401-K we can’t contribute to, or health insurance we can’t subsidize.

    I am blue as blue gets in a blood-red state, but seriously, you have drank the Kool-Aid on this one.

17. JonF Says:
    August 21st, 2008 at 6:30 pm

    Since businesses (including single proprietors) are only taxed on profit, with ordinary expenses being fully deductible, it’s hard for me to see how this would damage their bottom line. Sure the owner might have less take-home pay, but the business itself would suffer no loss.

18. right Says:
    August 21st, 2008 at 7:09 pm

    Since businesses (including single proprietors) are only taxed on profit, with ordinary expenses being fully deductible, it’s hard for me to see how this would damage their bottom line.

    Well the “bottom line” refers to “net income” which comes after you take out taxes, so it directly damages the bottom line.

    So when the right wing smear machine talks about a “job-killing tax hike” they are, as usual, talking out of their asses. If you plow additional revenues into new jobs, you get new tax deductions. The money left over (ie. profits) are what is taxed. So you can raise taxes as high as you want, and it shouldn’t make the slightest difference in the economic viability of hiring more workers.

    You’re missing the point. At a certain level of taxes, the company is not going to be profitable enough to generate a return on assets that makes it worthwhile to keep running the business. At this point, the proprietor would shut down the business, lay off all the employees, and sell the assets. It’s jobs in these marginal businesses that people are concerned about.

19. Nat Says:
    August 21st, 2008 at 10:27 pm

    The McCains are not the sort of people who have tenants. What is being called investment property is really owned by Mrs. McCain’s “Dream Catcher Family” corporation. This is a tax dodge that allows them the use of the home and to deduct it as a business expense.

    Their ranch has multiple homes. How is this handled tax wise? Half of the national media has stayed there. They have the 4+mm condo pair in Phoenix. They have at least two condos on the beach; Mrs. McCain said she bought the second when the first was used so much by the rest of the family. I have seen reference to a third California condo. Plus they have the Arlington condo for when they are in DC. My money says this is a business property. Plus there is the condo for their daughter.

    Mrs. McCains taxes are not shared with the public. I think there are reasons for this and the handling of these homes for tax purposes would be one of them.

20. James Robertson Says:
    August 21st, 2008 at 10:52 pm

    I suspect that those reasons don’t include having dirty money tossed into the purchase by a corrupt felon, like the other guy in the race. Ultimately, Obama is going to regret bringing this topic up.

21. pseudonymous in nc Says:
    August 22nd, 2008 at 1:40 am

    Ultimately, Jim-Bob is going to stop shitting himself whenever a black man walks in front of his quarter-acre lawn.

22. p.e. Says:
    August 22nd, 2008 at 8:16 am

    This might be a good time to bring up my perennial question:
    Why is S-Corporation income taxed at the same rate as personal income while C-corp income is taxed at a different rate?

    It seems if the problem with raising marginal income tax rates is that it hurts small businesses, you could just come up with a separate tax rate for small businesses – right?

23. p.e. Says:
    August 22nd, 2008 at 8:31 am

    I suspect that those reasons don’t include having dirty money tossed into the purchase by a corrupt felon, like the other guy in the race. Ultimately, Obama is going to regret bringing this topic up.

    If by “dirty money” you mean book royalties and Mr. Rockefeller’s spare change… oh, darn it, you’re talking about Rezko! This is a bit long winded: The seller would only sell the lot with the house on it (which Obama wanted) if the same buyer bought the vacant lot next door (which Obama couldn’t afford*). Rezko, a property developer in addition to being an (alleged) scumbag, agreed the buy the property next door. A few years later, Obama bought a strip or Rezko’s land at approximately market price for a piece of land. The scandal comes from the claim that by buying the strip, Obama prevented the adjoining land from being developed, and therefore should have paid a much higher price for the strip… If you look at the Chicago Tribune story linked above, the adjoining lot is for sale, though I presume the Secret Service won’t let a bunch of construction guys come in.

    *: Do we really want someone so poor in charge of making us all rich?

24. James Robertson Says:
    August 22nd, 2008 at 8:59 am

    Rezko went to jail, the house sold for less money than it was worth. Never mind the ins and outs of it all, just look at the politics:

    Your claim: McCain’s wife is rich! They own lots of houses!

    Your problem: Obama’s house was partly bought by a convicted felon

    I don’t know how you guys think these things run, but trust me – if McCain wasn’t bringing that subject up (and he wasn’t, who knows why not), then your team should have breathed a sigh of relief and left well enough alone.

25. Ano Says:
    August 22nd, 2008 at 9:33 am

    This type of post is frustrating. It is a devastating narrative unencumbered by evidence. But, since we’re not using evidence, it is vulnerable to a counter-narrative that is also evidence free. Politics is fun!

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