The myth of the argument is in the conflation

By: Divorced one like Bush

I am responding to a post put up at Crooks and Liars: The McCain campaign small business myth.

It presents that the myth is found in the number of small businesses in existance and what percentage of them earns $250,000 or more. I love C and L, but this is just totally missing the ship (notice I did not say boat).

The lie to the McCain position on Obama’s tax plan is not in the number of small business in existence or in the number of small business making over $250,000/yr.

The lie to the McCain position is in the conflating of business income with personal income. An S corp or a solo proprietorship business or any other similar configuration that is paying income tax on $250,000 is paying income tax on that money not because the business made that income and is keeping it because the business had plans for it. No, no, nooooooooo. It is the owner of the income generator that made that income and they made it as personal income. It is the amount of money remaining AFTER the business did it’s complete business thing for the year. It is the money remaining AFTER the business spent on expanding jobs, or buying more equipment, or marketing, or adding new facilities, or expanding to China, or hedging its energy costs or PAYING IT’s BUSINESS RELATED TAXES. It is the money that the owner of the income generator walked out the door with at the end of the year and then proceeded to use on their personal needs like: food, housing, transportation, oil futures, corn futures, GE, Haliburton stocks, boats, collectable cars, art, entertainment, lawn care, maid services, tuitions, security systems, etc.

In fact, anyone who has started a business has experienced that moment when their accountant calls them up and says: “You owe income taxes.” The rest of the conversation goes something like this: But, but, but, but, but…how can I owe taxes when I have no money left? “Well” responds your accountant, “did you buy food?”. Why yes I did, but I have nothing left. “Then the money you bought food with is the income your business paid you and now you owe Uncle Sam”. At that moment your stomach is getting ready to pay Uncle Sam as your legs are giving out. Later on, when you are humming along and you are taking $250,000 out of your S corp because you had no more expenses the true nature of you spirituality shows through. Either you think your taxes are too high, or you understand the benefits of paying taxes but think that spending more than the rest of the world combined on military is crazy.

Why the pundit’s on the Obama side have not pointed this conflation out, I do not know. Do they not believe in education? But, focusing on the number of businesses when the issue is personal income only allows the presentation on taxation and income to continue in the same vein as it has been continuing since Reagan. It is a continuation of the same argument that has allowed us to accept that Walmart cheap is the same as more money in your pay check; or that the increased cost of your benefits are the same as more money in your paycheck; or that the rising share of income going to pay all your taxes owed is the results of some waste and greed and civil service unions and teacher unions and not the results of less income earned from your labor; or taking a pension fund away is OK because it was not money earned but money gifted.

Yes, I’m an S corp, I was a sole proprietorship and the other business is an S corp.

If we don’t stop watching the shells we will never win the game of find the pea.

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