"Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”"
This was actually written by my tax preparer. He's very good. A little pricey, but, I believe, fully worth it. He knows his stuff. If you're in the DC area and need a tax preparer for your startup, I'd be happy to make an introduction.
As soon as I see "Obamacare" they've lost me. Same as when I used to see BushCo. or any other informal (biased) naming conventions. Seems like an informative piece but why bias it with senseless political jargon?
I don't think this is a parallel to "Bush Derangement Syndrome". It seems to me like "ObamaCare" has actually entered the vernacular, used across the political spectrum as a shorthand for "the healthcare reform package enacted in 2010 under the leadership of Pres. Obama".
My thoughts exactly. If you can't write something without using 'liberal' and 'conservative' as dirty words, you lose my attention.
The 'about' page shows that they're heavily partisan, no shocker there.
Back in reality, the nearest I can see from the tax code is that a large number of previous cuts made during the Bush administration will expire as planned, and that most of these will apply only to the highest income bracket.
It was the fact that it's written by Grover "Drown the Government in the Bathtub" Norquist which led me to stop taking it seriously. That guy has no commitment to the truth, so I would need to fact check every assertion he's making.
If anyone has corroborated his claims using non-wingnut sources, I would be interested to read about it. Until then, I'm taking this with a huge grain of salt.
No, it was written by Ryan Ellis, charliepark's tax preparer (http://news.ycombinator.com/item?id=1490945). And it's not like these have been secrets, although it's taken a while to work through the implications of ObamaCare, excuse me, the Patient Protection and Affordable Care Act (http://en.wikipedia.org/wiki/ObamaCare).
The major difference being that Europeans 'enjoy' some benefits of paying higher tax, such as free healthcare, while I will most likely see no benefits.
There is nothing to enjoy when given by a government. Nothing. Ever. Being at the mercy of nanny states is horrible.
"Free" health care ain't free. You pay through the nose in taxes and in lost time. And even then, I usually fly to other countries (US) and pay full price for specialized interventions.
Because with the "free" health care you ca lose your life. It's free and you get your money's worth.
I wonder, from all down voters: is there among you a single business owner who will be impacted by this?
Or you're all in the peanut gallery happy to pay with somebody else's money but never actually understanding what it takes to be a business owner in this world?
Cause it seems a pretty strong democrat bias in what should be an entrepreneur's forum. And one should have one's head pretty far up one's... bias to ignore the signs you country is becoming less and less business-friendly and more and momre of a welfare state.
There are many borderline-political comments in this thread which are upvoted, yours just crosses the line a bit into overly-political flamewar provocation. So I downvoted you even though I totally agree with you.
Is becoming more like Europe supposed to be a bad thing? Most of Europe seems like a nice place to live and raise a family. Can you recommend a "role model" country from the opposite end of the taxes and services spectrum? IE, a "low taxes, low regulation" country that's an attractive place for a non-wealthy person to live and raise a family?
I'm not being snarky, I'm actually curious. I look at western Europe and by and large I see clean, pleasant cities with low crime, lots of parks, museums and other amenities. In short, nice places to live. I don't know that has anything to do with their "high" tax rates and "socialist" leanings, but I suspect it might.
The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.
I live in California - 10% state tax. Also 10% sales tax and 10% tip.
I am seriously thinking of dropping my US citizenship (I am dual-citizen)....have people explored this before?
I was mostly responding to the comment, which was about the income tax rates.
That said, while some of the HCR provisions resulted in new limits and exemptions on tax-free HSA/FSA accounts and the like, there really isn't a new "health care" tax.
Some of the other items on the list, like the AMT thing, has little to do with the current administration - it's a perennial issue that Congress "fixes" every year. (Which isn't to say that it's not a problem that they should just address one way or another, but it's silly to blame the AMT on anything new from Obama - it happens every single freaking year).
A few of the other items are downright laughable - they're expirations of temporary tax cuts or programs that were part of the stimulus (the stimulus that, FWIW, most conservatives opposed).
Thankfully I'm not a US citizen, but I am thinking about leaving the US. I moved here largely because I was under the impression it was a low-tax country.
What I didn't realise at the time was that you can add an extra 10% or so in state taxes onto the quoted rates (or live the desert and pay an equivalent amount in property taxes). Australia may have a 48.5% (last I checked) top tax rate, but at least once you've paid that you're basically done.
The 2011 tax rates have not yet been determined. If Congress lets all of the 2001 tax cuts expire, then we will get the rates cited in this article. It seems likely that they will only let the 2 highest income brackets return to the 2001 level, and keep the tax cuts on the lower income brackets.
Where you pay taxes has nothing to do with your citizenship. It has to do with where you work, if you move to another country and work there you won't have to pay taxes in the US.
Actually the US is one of the extremely few countries which taxes its citizens on their foreign earnings (above, I believe, about $US80K). This means US citizens living abroad are double taxed, which is part of the reason you see so few US citizens working abroad.
Aren't most of these 'tax increases' simply an expiration of the huge tax cuts made under the previous administration as a temporary measure?
If I recall correctly, those cuts were strongly criticized at the time as being unsustainable and likely to lead to huge budget deficits. Rather than fix the core financial problems at the time, a tax cut was used to punt unpopular measures into the next administration.
I guess those problems could continue to be ignored for the sake of popularity, but that plan hasn't worked very well so far.
I guess those problems could continue to be ignored for the sake of popularity
There is another option. The stuff the taxes were paying for could be stripped from the budget.
Rather than fix the core financial problems at the time, a tax cut was used to punt unpopular measures into the next administration.
Perhaps this time they should think about a more permanent fix. As unsustainable as the tax cuts may have been, monotonically increasing taxes are also unsustainable.
The purpose of taxes is not to tweak the economy. It's just that taxes, and government spending overall, is such an enormous proportion of the economy that it's possible for them to have such an effect. I submit that it would be better to eliminate the use of the economy as a partisan lever by allowing we the people to decide how our money should be used.
EDIT: put in the word "been" I'd missed in 3rd para.
You've described the core of the problem: Everyone feels entitled to their entitlements, but nobody in the U.S. seems willing to pay for them. 'We the people' elected folks to 'decide how our money should be used'. That's the job of elected officials -- they're the hired help.
A 'permanent fix' would involve either eliminating programs or raising sufficient funds to actually pay for them. Which subsidies which you personally benefit from would you like to see stripped out? Deductible mortgage interest? Cheaper cars? Lower gasoline costs? Cheaper food? You're paying for all of those now.
Caryme asked a valid question that by no means warrants downvoting. Aside from being politically slanted, the article has no technical bearing whatsoever.
The only reason it might have any bearing on HN is the small-business angle, but again, the obvious political slant of the article negates that pretty effectively...which is a shame, given that it does have some useful numbers.
is this just an article to hype about what could happen, and that nothing is concrete yet? Therefore the people can still pressure their Representatives of the government to help the people and stop taxing them so much? I thought we were supposed to lower taxes to businesses and banks so that consumers don't get punished in the end with new fees and higher costs.
Whats going on?
We're supposed to lower taxes to businesses, because at the end of the day business is the engine of the economy. Throttling business with taxes throttles the economy -- which is exactly what we don't need today.
so that consumers don't get punished in the end with new fees and higher costs
The degree to which this is true depends on the products involved. It all turns on the elasticity of demand for that product. Basically, if you're unlikely to significantly curtail your usage of -- e.g., oil or tobacco -- then the consumer will bear the brunt of any tax increase to the business. But if it's related to products that you're more inclined to put off a purchase due to price sensitivity, then the taxes will tend to come out of corporate profits.
Well, in that sense nothing is "concrete" ... which itself is a big problem. Every few years there's a major change in taxes, which makes it impossible to plan for the long term, or at least make long term investments for smaller payoffs (yet people complain about companies being focused on the short term).
It's widely perceived that the massive and ongoing changes in the business environment have caused a lot of companies to effectively freeze or cut back until they see how it all plays out (note that one has also got to be concerned about second order and so on effects, that which trashes you may also be trashing your customers, your customers' customers, etc.).
Even the left is starting to acknowledge it; from the site run by the guy who helped to expose the polling firm that was scamming the Daily Kos, the last paragraph of an essay on "Why Aren't Businesses Hiring?":
"Uncertainty: there has been a tremendous amount of change over the last 12 months. Businesses are still trying to figure out what that means for their bottom line. Until there are firm answers, they will freeze hiring."
Which as the WSJ editorial notes "If hedging currency risk becomes too expensive, companies may shift more jobs to countries where the purchases occur, matching their revenues to expenses in the same currency.", in alignment with Fred's comments that "It is ideal to have your foreign currency denominated expenses and revenues be as close to each other as possible. Because if you can do that, they are a natural hedge."
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[ 3.0 ms ] story [ 86.9 ms ] thread"Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”"
BushCo is a bit different, because there is no such entity as BushCo, by that name or any other.
The 'about' page shows that they're heavily partisan, no shocker there.
Back in reality, the nearest I can see from the tax code is that a large number of previous cuts made during the Bush administration will expire as planned, and that most of these will apply only to the highest income bracket.
Anybody with greater insight care to share?
It would be very difficult, in this day and age, to be a pro-lower-taxes group which wasn't heavily partisan.
If anyone has corroborated his claims using non-wingnut sources, I would be interested to read about it. Until then, I'm taking this with a huge grain of salt.
I don't remember, why did you guys vote Obama again? :)
"Free" health care ain't free. You pay through the nose in taxes and in lost time. And even then, I usually fly to other countries (US) and pay full price for specialized interventions.
Because with the "free" health care you ca lose your life. It's free and you get your money's worth.
Even if you don't though, I think you could make a strong argument to vote Democrat purely on how terribly the Republicans run the country.
* http://wso.williams.edu/~rcarson/lizards.html
Or you're all in the peanut gallery happy to pay with somebody else's money but never actually understanding what it takes to be a business owner in this world?
Cause it seems a pretty strong democrat bias in what should be an entrepreneur's forum. And one should have one's head pretty far up one's... bias to ignore the signs you country is becoming less and less business-friendly and more and momre of a welfare state.
I'm not being snarky, I'm actually curious. I look at western Europe and by and large I see clean, pleasant cities with low crime, lots of parks, museums and other amenities. In short, nice places to live. I don't know that has anything to do with their "high" tax rates and "socialist" leanings, but I suspect it might.
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.
I live in California - 10% state tax. Also 10% sales tax and 10% tip.
I am seriously thinking of dropping my US citizenship (I am dual-citizen)....have people explored this before?
Some of the increases are the result of expiration of the Bush tax cuts.
Others are new, the result of healthcare initiatives and other programs.
That said, while some of the HCR provisions resulted in new limits and exemptions on tax-free HSA/FSA accounts and the like, there really isn't a new "health care" tax.
Some of the other items on the list, like the AMT thing, has little to do with the current administration - it's a perennial issue that Congress "fixes" every year. (Which isn't to say that it's not a problem that they should just address one way or another, but it's silly to blame the AMT on anything new from Obama - it happens every single freaking year).
A few of the other items are downright laughable - they're expirations of temporary tax cuts or programs that were part of the stimulus (the stimulus that, FWIW, most conservatives opposed).
What I didn't realise at the time was that you can add an extra 10% or so in state taxes onto the quoted rates (or live the desert and pay an equivalent amount in property taxes). Australia may have a 48.5% (last I checked) top tax rate, but at least once you've paid that you're basically done.
http://www.mydollarplan.com/tax-brackets/
Does anybody know when the each year's tax rates are effectively set in stone?
If I recall correctly, those cuts were strongly criticized at the time as being unsustainable and likely to lead to huge budget deficits. Rather than fix the core financial problems at the time, a tax cut was used to punt unpopular measures into the next administration.
I guess those problems could continue to be ignored for the sake of popularity, but that plan hasn't worked very well so far.
Edit: For the downvote brigade; no, those cuts did not help you: http://www.economist.com/blogs/freeexchange/2009/01/tax_cuts...
There is another option. The stuff the taxes were paying for could be stripped from the budget.
Rather than fix the core financial problems at the time, a tax cut was used to punt unpopular measures into the next administration.
Perhaps this time they should think about a more permanent fix. As unsustainable as the tax cuts may have been, monotonically increasing taxes are also unsustainable.
The purpose of taxes is not to tweak the economy. It's just that taxes, and government spending overall, is such an enormous proportion of the economy that it's possible for them to have such an effect. I submit that it would be better to eliminate the use of the economy as a partisan lever by allowing we the people to decide how our money should be used.
EDIT: put in the word "been" I'd missed in 3rd para.
A 'permanent fix' would involve either eliminating programs or raising sufficient funds to actually pay for them. Which subsidies which you personally benefit from would you like to see stripped out? Deductible mortgage interest? Cheaper cars? Lower gasoline costs? Cheaper food? You're paying for all of those now.
The only reason it might have any bearing on HN is the small-business angle, but again, the obvious political slant of the article negates that pretty effectively...which is a shame, given that it does have some useful numbers.
so that consumers don't get punished in the end with new fees and higher costs
The degree to which this is true depends on the products involved. It all turns on the elasticity of demand for that product. Basically, if you're unlikely to significantly curtail your usage of -- e.g., oil or tobacco -- then the consumer will bear the brunt of any tax increase to the business. But if it's related to products that you're more inclined to put off a purchase due to price sensitivity, then the taxes will tend to come out of corporate profits.
It's widely perceived that the massive and ongoing changes in the business environment have caused a lot of companies to effectively freeze or cut back until they see how it all plays out (note that one has also got to be concerned about second order and so on effects, that which trashes you may also be trashing your customers, your customers' customers, etc.).
Even the left is starting to acknowledge it; from the site run by the guy who helped to expose the polling firm that was scamming the Daily Kos, the last paragraph of an essay on "Why Aren't Businesses Hiring?":
"Uncertainty: there has been a tremendous amount of change over the last 12 months. Businesses are still trying to figure out what that means for their bottom line. Until there are firm answers, they will freeze hiring."
Fred Wilson recently discussed "Currency Risk In A Business" (http://www.avc.com/a_vc/2010/07/currency-risk-in-a-business.... which was submitted to HN but seems to have disappeared). However, it looks like hedging that will get a lot more expensive: WSJ: http://www.google.com/search?q=%22facing+higher+retiree+heal...)
Which as the WSJ editorial notes "If hedging currency risk becomes too expensive, companies may shift more jobs to countries where the purchases occur, matching their revenues to expenses in the same currency.", in alignment with Fred's comments that "It is ideal to have your foreign currency denominated expenses and revenues be as close to each other as possible. Because if you can do that, they are a natural hedge."