viverra: (Default)
This is a letter that I just sent to Congresswoman Olympia Snowe of Maine.

She is a Republican, but has a long history of not blindly following the Republican leadership. For this, she is facing accusations of being a "RINO" (Republican in name only) and the Tea Party has her in its sights. The Democrats also campaign against her, because even though she is usually a voice of sanity and willing to compormise, she is nevertheless a Republican.

I disagree with many of her opinions, but I respect her integrity.

Job creation and support of small business is, as you say in the Snowe Report, of utmost importance.

According to the news, the Obama administration wants to extend the tax cuts, except for the over-250K income category. Republicans have refused to go forward without including that tax cut category, and gridlock has resulted.

I conducted a survey that concluded that extending the over-250K tax cut will not help small businesses, but will instead actively hurt them and prevent job creation.

I contacted the owners of several local small businesses and said, "Suppose last year you made 250K in business profits. This year you are going to make 300K, an extra 50K. If the tax rate doesn't change, what will you do with the extra 50K?" Nearly all my respondents said they would either buy stocks or buy something like a fancy multimedia center. The effect of either of these on the local economy is minimal.

Then I said, "What if the extra 50K were taxed at a higher rate. What would you do then?" Three quarters of my respondents said that they would avoid the extra tax by putting it back into the business -- e.g,. either buying equipment or HIRING WORKERS.

This is in direct contradiction to the arguments I hear from the Republican side of the aisle. I have run the results by a tax accountant, and he agreed that the scenarios were reasonable and the results were what he would expect.

Do not take my word for it. The survey is very simple. I urge you to send your staffers to make a similar survey, and I trust that if their results match mine, you will vote accordingly.

I have the highest respect for you, simply because you do not let yourself be blinded by political dogma, but instead vote your conscience. You stay true to the needs of the people of Maine. Thank you for that.

This is obviously not a full-blown argument about how she should vote with the Democrats and not stand with the Republicans on insisting on extending the over-250K tax cut. I figure she's heard all that before. My point was simply that the Republican argument that the extension was necessary to support small business and create jobs was based on faulty reasoning.

Oh yes -- and, as any small business owner can tell you, income tax is assessed not on gross receipts, but on receipts minus expenses -- on profit. So you can always lower your tax by simply putting more into the business. Some politicians seem to be ignorant of this basic fact.


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August 2016

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