I wonder how many small business owners would just say "screw it," close up shop, and let their 5 or 10 employees go...
That plan would severely impact any labor cost intensive company... Many companies are already running on razor thin profit margins. Eliminating the corporate tax probably won't cover the cost increases to the employers.
Well, that’s a good point.
I personally would like to see the abolishment of all income taxes, payroll taxes, etc. I would like to see a national sales tax combined with tariffs on imported goods and that’s it.
We need to transition to personal individual retirement/medical accounts and get government out of that business. How we get to that point and honor our commitments to people that have worked and paid into the existing system? I don’t know, but we need to work towards that goal.
“I wonder how many small business owners would just say “screw it,” close up shop, and let their 5 or 10 employees go...”
I would say “None”. A successful small corporation typically has at least a 10% profit margin. Eliminating the 35% Corporate profits tax means 3.5% of their revenues stays in their pocket. Even if all of the COGS was labor (no other expenses), their total tax would be going DOWN.
Currently: 7.65%*83.6 + 35%*10 = 9.9% of revenue going to taxes
My Plan: 10%*83.6 + 0%*16.4 = 8.36% of revenue going to taxes
If the small business is not a Corporation, then they are paying both sides of the current payroll tax or 15.3%. So their payroll tax drops from 15.3% down to 10%.
An employer loses under my plan if they have been gaming the current system by pretending employee costs are separate from benefits costs, so they can underpay the payroll tax. This is the equivalent of bartenders and other workers who make 75% of their income on tips and under report their income to cheat on their payroll and income taxes. It is part of what needs to be cleaned up in our tax system, not some “goody” that should be preserved.