More “unexpected” news is heading our way as the increased taxes on “the wealthy” kick in and hit the cornerstone of our economy: small businesses. What leftists who fetishize tax the rich policies never tell the public is that many of the “rich people” they target are in fact shop owners, farmers, franchise operators and a host of other small businesses that create jobs and boost local economies. The left calculates wealth not by how much money you have to spend, but how much you actually own, which means even a farmer suffering a bad year and making no money is considered wealthy because his property is technically valuable.
The class warfare basis of leftism drives the idea that these people “aren’t paying their fair share” which in turn drives many of them to stop doing business all together as they can’t make a buck under increasingly punitive taxation. That means whoever works for them is out of a job, but it also means people that derive part of their income from providing services to those businesses (the mechanic who fixes the tractor, for example) also suffer. Tax revenue suffers as well, as high taxes decrease the pool of businesses and “fat cats” that pay taxes.
Now economists are hearing from small businesses who are telling them what everyone already knew: leftist policies will forever drive mom-and-pop shops out of business and accelerate our slide into second world status as large swaths of Americans face permanent unemployment:
America’s jobs growth engine is being choked to death.
A record 25 percent increase in the taxes against US small businesses — from costs associated with new health care law, to an increased Medicare tax, increased capital gains taxes and higher state and city taxes — is repealing any ability of these entrepreneurs to add jobs to their payroll.
And the numbers for New York’s small- to medium-sized business are just as harrowing.
By one estimate, the effective tax rate on the 26 million small businesses across the country — which in the past have accounted for more than half of the job growth in the US — has jumped to 50 percent from 40 percent, sucking valuable cash from the businesses.
Unsurprisingly these numbers have started to make the prospect of continuing to run a small business (and employ Americans) seem too daunting and have inhibited new job creation:
A survey of 200 small businesses across the US by the economist found 51.5 percent of business owners in March were concerned about the viability of their businesses — up from 49.5 percent in February. More than eight million jobs have been lost during the current 28-month recession.While a healthy 162,000 jobs were added in March, it was accomplished with the help of heavy government stimulus. Meanwhile, the average length of joblessness rose to 31 weeks and hourly earnings were down, albeit slightly.
Of course government job “stimulus” not only creates far fewer jobs than we need, but is completely reliant on tax revenue. Tax revenue that is going to be taken from a smaller and smaller pool of tax payers as people decide closing up shop is the only option to keep from ending up in the poor house:
In New York, interviews with more than a dozen small business owners by The Post found a group of owners hurting under the weight of the new taxes.
Teresa Kramer, co-owner of Northside Bakery in Greenpoint said she is scared.
“We’d really need to raise our prices by 20 percent to stay even because our profit margins are shrinking as costs keep rising everywhere — for garbage and services, commuter taxes and other taxes,” said Kramer, a Polish immigrant who operates the two-store division of Old Poland Foods. The business employs 20 and rings up annual sales of about $2 million.
Kramer has stopped short of raising prices, at least for now. She added: “We’re producing more bread and product — but we’re still making less and less profit.”
In Manhattan, Robert Schwartz, the CEO of a three-unit shoe store chain, said he has never seen the tax burden this bad.
“This has been as hard as we’ve been hit in my 36 years of running this company,” said Schwartz, owner of Eneslow Shoes, which employs 50 people, including part-timers, on annual revenues of under $10 million. “It’s a tough economy and our costs continue to rise.”
Schwartz, who says he’s putting his salary back into the business in response to the environment, adds that overhead from taxes and other outside charges have become unbearable. “I certainly don’t think the new health care law will save me any money,” he said. “Now New York City wants to develop this paid sick leave legislation that would give employees up to nine paid sick days. It’s ludicrous. It takes the oxygen out of the blood.”
Fran Biderman-Gross, CEO of Advantages, a branding, mass communications and marketing company in Fresh Meadows, said with health care becoming mandatory she envisions more companies switching to independent contractors — who don’t require pricey health benefits — in order to stay in business.
These consequences are completely predictable, but the left’s class warfare theology promotes punishing “the rich” even when they’re good people who are struggling to not raise their prices or putting their own salaries back into the business to keep it afloat. But while America embraces the ivory tower Sovietization policies dreamed up by sheltered academics and politically active hausfraus, neither of whom know how to create jobs, no small business will be able to stay afloat.
Only the government and multinational corporations who play ball will be able to operate in this sort of environment, and the government can only operate as long as there are some businesses left to pay for their extravagant welfare state. We’re worse than socialists now, we’re corporatists which is a fancy way of saying Fascists.
This isn’t rocket science, but to fully grasp it you have to take off the neo-Marxist blinders. Most lefties are too comfortable believing money is an unlimited resource and “the rich” can and will shoulder them as a burden to stop and think about what their policies actually do. In the end, just like the Soviet Union, Cuba, Argentina and Venezuela, America will grind to a halt and become a wasteland of poverty, crime and decay leading eventually to societal collapse.
Which is what the left wants anyway. What other explanation could there be?