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Tax burdens will only hurt main street America [UPDATED]

Published 9:06am Wednesday, May 22, 2013 Updated 11:08am Wednesday, May 22, 2013

Earlier this week a letter to the editor caught my attention. It was a letter written by Lisa Workman from the Fergus Fall Area Chamber of Commerce. In this letter she expressed her concern over the upcoming increase in taxes that was put into place by the most recent Legislative Session which was lead by Democrats.

Like Lisa, I share the concern for what these taxes will do to our small businesses. These extra burdens put into place by the democrats will only hurt main street America. The backbone of our economy and our livelihood is in jeopardy with this massive overreach.

As Ms. Workman stated this deficient will take care of itself, without raising taxes on the hardworking tax payers. However, the democrats insist that everybody dig a little deeper to grow government and invest unwanted issues.

It’s my goal to support small business and to make sure that the state is spending every dollar efficiently. This massive tax by the DFL leaders this past session was something that was very disappointing to me and I did not support it. Please feel free to contact me with any concerns or comments at my office at anytime.

 

Sen. Bill Ingebrigtsen

Senate District 8

 

  • Phaedrus

    Let me alleviate your concern, since her reasoning was fallacious and the crucial point in her argument is obviously false, when she writes,

    “When faced with paying the fourth highest income taxes in the country, what do you think our small business owners will be forced to do to balance their budgets? Will they cut expenses, employees, benefits, hours or philanthropy? Will they consider moving to another state with lower taxes?”

    Why would they do any of those things, since all of those things reduce their tax burdens (in other words, wages, benefits, expenses and charity are all tax deductible items, they are written off the “gross receipts” to produce a “net income” and THAT’S what their income tax is based upon. Why would someone with a personal NET income in excess of $250,000 do any of the things she’s saying?

    “Cash held by the 395 nonfinancial companies in the Standard & Poor’s 500 index has climbed from $703 billion in 2007 to $1.21 trillion today, according to Dow Theory Forecasts.” So the idea that “if companies have more money, they’ll create more jobs and expand their business” is clearly contrary to all the evidence, but it’s also false on another level, expanding without the demand to support that expansion is bad business. Businesses expand when the demand for the product is greater than their ability to produce that product (they call this “production capacity”). “The rate of capacity utilization for total industry decreased 0.5 percentage point to 77.8 percent, a rate 0.1 percentage point above its level of a year earlier but 2.4 percentage points below its long-run (1972–2012) average.”

    So it makes economic sense for businesses to be sitting on record amounts of cash, because we’re underutilizing our capacity by almost ¼ because demand is soft, and demand is soft because American consumers are paying off past excesses rather than accumulating more debt and/or using their home equity to purchase items. But to get to the point, raising taxes on personal net incomes in excess of $250,000 will probably have NO effect on their businesses; because all of their business expenses are written off before you even get to the increased personal tax rate. You’d think that someone sitting on the COC, would be aware of these facts and not just be a puppet of ideology.

    But my question to you is, if everyone agreed that there was a “structural deficit” a few months ago, how is it possible that it will “take care of itself”? That’s absurd, unless, I suppose, you think that the ostrich is a “wise old bird”.

  • Richard Olson

    Phaedrus Wolf is “Da Bomb”

  • Walt Henry

    And where do these taxes go, up in smoke? As long as the money collected is spent in the location it is collected from there is no net cost. How many taxpayers have a pre-tax income that will pay the higher rate in Ottertail County? It is likely some of us in the city will be sending our money to you. And how many people with 5 year old children will save money on daycare now that we will have all day kindergarten? Will there be another teacher of two getting paychecks and spending money in Fergus Falls? What will the school districts do with the money they have been taxing or borrowing from district residents now that the schools will be repaid and the state won’t need to borrow money from them? And what about the money that will be sent to counties and cities to help them balance their budgets? And what about the money which will go straight into the pockets of homeowners and renters in the form of property tax relief?
    I know it is easy to scare people by decrying higher and higher taxes but really and honestly those cries are only coming from the wolf hoping to catch a few silly chickens.

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