The other day, I was talking to a business owner after the final votes came in for the presidential election on November 6, 2012. He said since Obama was reelected that he was pretty sure his taxes would go up because he is self-employed, and he makes well over $250,000 per year and employs about 10 people in his company.
"Yes," I told him, "I am absolutely positive your taxes will go up, and you will have to find ways to maximize your deductions, or severely cut your costs." He told me that his biggest cost was payroll and all the benefits that he now had to provide due to Obama Care.
He explained to me that he didn't mind paying higher taxes, but in order to do so he would have to lay off people, get his business more efficient, if he were to pay those higher taxes. He said in a way this was a "businessman's call to arms" in our country. Specifically he explained to me that if our nation is in debt because the Obama Administration has spent $5 trillion in deficit spending over the amount of tax revenue they've received in the last four years, then it is imperative that we make up that difference. The only way to pay off $5 trillion is to raise taxes he said.
Still, I told him that if he expanded his business, and everyone else expanded also that that would increase the number of people paying into the system, and if the government would just reduce its expenses, we could balance the budget. Well, it seems that many corporations are doing the same thing he's going to do; they are going to layoff people in record numbers. The federal government will have to figure out how to raise taxes, so they will increase taxes on all businesses. The only way those businesses can afford to pay the taxes now is to layoff more people.
Indeed, I guess this is what is known as a socialist economic diminishing spiral. Pure austerity won't work, and raising taxes never does. The only way to win is to decrease the costs in government, reduce burden on businesses, lower taxes, and that will also mean reducing regulations.
The Obama Administration is adamant about this (raising of taxes), and they are looking for a grand negotiation strategy which will include raising taxes on people like him who make over $250,000 a year. He is therefore going to cut down his business so he doesn't make that much money, layoff most of his workers, so he can afford whatever taxes are charged.
He also plans on selling his business, retiring, and letting the American people get what they wished for, as he explained; "they voted for socialism, let them have it. I quit." As he said that he almost sounded like a character in an Ayn Rand Novel. He wasn't kidding.
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