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Thursday, July 21, 2011

Small Business in the Crosshairs of Budget/Debt Limit Battles

Since the late 1980s, the general direction on federal individual income taxes has been higher. That's been a negative for the economy in general, including for entrepreneurs and their businesses.

Unfortunately, since the start of his administration, including during the current debate over what to do about ever-mounting federal debt, President Barack Obama has exhibited a relentless desire to continue this counterproductive upward trend on income taxes.

Keep in mind that most businesses - about 92 percent - pay the personal income tax (for example, as sole proprietorships, partnerships, S-Corps, etc.), rather than the corporate income tax. That means higher personal income taxes hit the bottom line of entrepreneurs and their businesses. Quite simply, that results in diminished incentives and resources for risk taking and job creation, and additional resources in the hands of the political class.

Does anyone really think that's good for the economy? Well, that is, other than the President and various misguided members of Congress...

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