(For those who say I just don’t get it…get this!)
Over the course of the last week or so I’ve received not only push back, but rather, shrugs and more when queried on my take on the proposed tax cut bill, its process, progress, and what it might all mean for everyone, not just business. It would seem as long as every dip in the “market” gets bought – everything else is considered noise. (You can read my latest view here and here.)
There’s a real sense of blasé on the matter. In other words, people ask for your opinion or view, yet you can infer they really aren’t that interested with the answers. It’s not just me, for I’ve watched this happen when the discussion didn’t involve me directly, where I was only a bystander. It’s not overt, but if you watch and listen carefully, as one should. You can see it quite clearly.
Most today are under the guise (much like many a pol) that passing a tax bill of any measure is going to be a “good thing.” I couldn’t disagree more. It’s one thing for the average worker or employee type to state that. But for a business person? It shows just how little one has thought it all through. From my purview that’s near inexcusable, whether you’re a solo-practitioner, CEO of a global concern, or just someone following the path of the entrepreneurial mindset. (i.e., you may be employed by someone, but you are the one who is truly in charge, and responsible for you.)
When it comes to this current legislation – It’s going to have effects far and wide, and those effects may very well be onerous to those giving it nonchalant attention.
Case in point: From the Wall Street Journal™ Sunday evening. To wit: “The Taxman Cometh: Senate Bill’s Marginal Rates Could Top 100% for Some”
“WASHINGTON—Some high-income business owners could face marginal tax rates exceeding 100% under the Senate’s tax bill, far beyond the listed rates in the Republican plan.
That means a business owner’s next $100 in earnings, under certain circumstances, would require paying more than $100 in additional federal and state taxes.”
That is currently “in the bill.” Yes, the very same bill everyone jumped up and down last week in celebration.
The above example hits the solo-practitioner with an effective tax rate of over 100%. i.e., You would, in-effect, have to pay the government for the privilege to work, then give them all the proceeds of that work, netting you below zero. That’s actually worse than an example using “slave wages.” And it’s not hypothetical. If the bill is passed, as is – that would now be your tax bill.
But not too worry, after all, it must be the only such oopsy contained in the remaining 499 pages or so, that no one took (or had) the time to read and weigh the consequences before passing it, right? Surely there could not be anything remotely concerning within the House’s version, that will now be added to all this, so it can be passed in the remaining few weeks, right? Right?
© 2017 Mark St.Cyr
Footnote: These “FTWSIJDGIGT” articles came into being when many of the topics I had opined on over the years were being openly criticized for “having no clue”. Yet, over the years these insights came back around showing maybe I knew a little bit more than some were giving me credit for. It was my way of tongue-in-cheek as to not use the old “I told you so” analogy. I’m saying this purely for the benefit of those who may be new or reading here for the first time (and there are a great many of you and thank you too all). I never wanted or want to seem like I’m doing the “Nah, nah, nah, nah, nah” type of response to my detractors. I’d rather let the chips fall – good or bad – and let readers decide the credibility of either side. Occasionally however, there are, and have been times they do need to be pointed out which is why these now have taken on a life of their own. (i.e., something of significance per se that may have a direct impact on one’s business etc., etc.) And readers, colleagues, and others have requested their continuance.