Cheney and S corps

[Nick Arnett]

I have to complain about this somewhere... and Brin-L might as well be 
the place.  During last night's debate, Cheney talked about how a 
Kerry-Edwards tax increase for people making more then $200,000 would 
hurt job creation because small businesses, which he said create 7 out 
of 10 new jobs IIRC, often pay their taxes on the owner's personal tax 
return, thus often putting their income above $200K.  There are only two 
ways that this can be done, as far as I know.  One is to file a Schedule 
C, for self-employment.  That's fine if one has a truly small business. 
 But anybody who hires employees and grows large at all will almost 
certainly incorporate as a subchapter S corporation, whose profits and 
losses flow into the owners' personal taxes, thus avoiding the double 
tax that C corporations pay.  Fine.  Been there, done that, took the tax 
deduction.

But a few minutes later, Cheney accused Edwards of avoiding taxes by 
using the "loophole" of an S corporation!  That seems outrageously 
cynical to me -- criticize a tax increase because it will hurt S 
corporations, then label S corporations a loophole!

I'm curious how many here caught the hypocrisy.
And what about Cheney's boast that there are now 5 million more people 
who don't pay any income taxes?  How many of them are in that situation 
because they lost their jobs or they became so under-employed that they 
fell below the minimum income?  Sheesh, if the number of people living 
below the poverty level rises, of course more will pay zero income 
taxes.  If we transfer most the wealth to a handful of powerful people, 
we could probably eliminate income taxes for almost everybody.

Nick
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