Taxing The Rich and What It Means

When you listen to a politician say he is only going to tax the rich and give you a tax break or cut your taxes just what does this all mean? Basically it is a scam when you look deeper into the nuts and bolts of how taxes are paid. According to Barack Obama (he is the only one promising to do this), he places the threshold of determining if you are rich at $250,000.00. Well that covers just about every small business and medium sized business in the country. Now you ask but just who are these "Small Businesses"? Well just about every video store, mom and pop grocery store, fast food outlet and all of the folks that have a store front in your local mall, and yes even the truckers that deliver our goods because a lot of them are independents. These folks gross around $250,000.00 per year but that is before they pay for rent, utilities, advertising, insurance, wages, fuel, restocking the shelves, bookeepers, etc. When all of these have been paid (this is called overhead which is the cost of doing business) the small business owner makes around $40,000.00 or so a year in net earnings. This is much like your paycheck before and after deductions.

When the taxes on these folks hit they are forced to make a choice of either cutting back the workforce and reducing hours of operation, and maybe even raising the prices of their goods/services, or in the case of an independent trucker he may actually have to park his truck and reduce the loads he takes and the distance which he takes them. A lot of you folks out there work for these people and many of you work for more than one because the wages are low and it is generally part time work so you don't put in that many hours at each place and you don't get any benefits as a part timer. What do you think happens to you when this "tax only the rich" goes into place? More than likely you will be laid off to help the owner cover the extra taxes he now has to pay and in turn this puts you right back where the folks that put this in place want you which is to be on Welfare where you are dependent on the government for survival.

When the large companies like Exxon, Ford, GM, IBM, Apple, Microsoft, Sony, etc., get hit with these new taxes they don't worry about it because the CEOs and big money folks here just move their money into tax shelters, and their manufacturing plants out of the U.S. so they don't get hit with the taxes. You see both sales and income taxes can only be charged for operations conducted within the borders of the U.S. they also begin raising the cost to the consumers to offset any taxes that they actually do have to pay. So you see, anytime a politician says he is going to tax the rich what he is really saying is that he is going to raise your cost of living. This is not a policy that is going to be very helpful to you and your family.

Whenever a politician says he is going to give a tax refund to 95% of the people what does he really mean. Well, let's take a look at your paycheck and see just what he is talking about. The first thing we need to figure out is whether or not this politician is saying he is going to send you a check in the mail or if he is cutting your payroll taxes, or if he is just giving you some sort of change in the way your taxes are calculated at the end of the year. Most of us that make less than $50,000.00 a year pay little or no taxes to begin with so giving us a tax refund is impossible because we don't pay any taxes to begin with. Whatever is deducted in taxes from our paycheck during the year we get back at the end of the year unless we owe back taxes. Now, if you set up your deductions smartly then you can get most of your money during the year and still get a refund at the end which generally helps us to survive (NEVER FILE EXEMPT). Now, if he is just going to give you a check and you don't pay any taxes to begin with then the question we need to be asking is just where is he getting the money to send to us and how is this going to impact our daily lives down the road in the form of buying food, paying rent, etc.?

Now let's take a look at what Senator Obama is really going to do. If he is going to reduce your weekly deductions on federal taxes (he has no control over what you pay in state taxes) then you will never notice it because his tax plan increases the taxes on Medicare, Medicaid, and Social Security which will more than make up for anything he gives you via a reduced weekly deduction in federal taxes. You see how the shell game works now? Promise a tax break with one hand and take it back plus more via another type of tax with the other hand. Even if the tax break comes through via your 1040 at the end of the year it amounts to the same thing.

Oh, and did I mention that all of those big companies that are being taxed at a higher rate are more than likely companies that your 401K have invested in so the profits they make which make up the value of your 401K will be reduced so you and not the actual company are being hurt. The big companies really are owned by the stockholders and not the chairman or CEO of the company. Just remember that a poor guy doesn't hire anyone and creates no new jobs but the rich guys/gals do, your paycheck isn't signed by some homeless guy on the street, it is signed by that rich guy that Obama wants to tax and he is simply going to pass the increase on to you in the form of higher prices for goods, lower wages (pay cuts), or layoffs.

I hope this helps you and provides enough information for you to avoid being suckered into this political shell game.