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Obama Gets the Nerd Vote

Written by Brent Oxley

Monday, November 3rd, 2008

Many of us at HostGator were curious what the ‘nerd vote’ looked like so we went ahead and ran our own poll amongst employees. We limited the choices to either Mccain or Obama in order to keep the results realistic.

Here’s a breakdown of the results:

98 Texas employees participated
55 nerds voted for Barack Hussein Obama II
34 nerds voted for John Sidney McCain

The remaining 9 votes were disqualified for failing to follow the strict directions of selecting one candidate or the other. For the sake of being democratic, here are the results of the 9 votes that were neither McCain nor Obama:

1 vote for “in your moms box” – Whatever this means….
3 votes for “neither”
1 vote for “ray” – Ray, you’re a loser if you voted for yourself.
1 vote for “Ron Paul”
1 vote for “cocktail party” – If you voted this, please come see me for psychiatric help.
1 vote for “Brent Oxley” – Your vote may have been disqualified, but you will still be getting a raise for having such wisdom.
1 vote for “Cbar” – I think this vote was an attempt to spell “brent”, but got mixed up on the spelling.

Obama dominated with 62% of the votes versus McCain’s 38%. This nerd vote took place at the HostGator office in Houston, Texas which is one of McCain’s strongest states! I can only imagine what these results would have looked like had HostGator employees been from somewhere more liberal, like San Francicso.

I personally voted for McCain with the belief that he is the lesser of two evils. I disagree with McCain on a few key issues such as withdrawing from Iraq, and having preconditions before meeting with foreign leaders. This, of course, seems much better to me than Obama’s relying on the United Nations and resolving issues in a “diplomatic” way. The U.N. is a joke, which is why major atrocities and genocide are happening in places like Darfur and Burma. The diplomatic route is the best way to go, but you can only talk so long until action is necessary if the talks are fruitless.

The Iraq war is costing Americans roughly 147 billion a year. This is a ton of money, but when you consider our current deficit is at $438 billion, you can quickly understand the war isn’t the main or only problem in America.

We have a few major problems in America right now. The consensus majority would have you believe that it’s the economy. I believe the biggest problem we have is our nation’s debt, which is about ten and half trillion dollars! To pay this off: every man, woman, child, and baby would need to pay about $35,000 in cash today. Even if our economy was going strong and we withdrew from Iraq our debt would still be increasing!

Both Mccain and Obama have the same plan to fix the economy by adding another trillion dollars if not trillions in further debt to America. To summarize the politics:

Mccains plan is to keep taxes the same
Obamas plan is to tax the rich further.

And here’s the problem…

In 2007, Forbes Magazine reported 946 billionaires in the entire world, with total accumulated wealth of $3.5 trillion. So even if somehow we said screw all you billionaires of the entire world we are now taking 100% of your money to help pay America’s debt it would still only put a small dent in the total $10.5 trillion America owes. This isn’t even taking into consideration that most of their wealth is in assets which means if everything was liquidated the market would be so flooded that the $3.5 trillion would probably be worth much less than half.

If you took 100% of the money and assets excluding real estate of every single person with one million dollars or more in both America and Canada this would still only be somewhere around 7 trillion dollars.

America needs to start being run like a business and Obama’s socialism is not the answer.

If a business is struggling would it be wise for them to raise the prices on its best customers?

No!

Your best customers would be the last ones to receive the price increase. You can’t penalize a customer for doing an increased volume of business with your company. If you do they’ll do less business or find someone else to do business with altogether.

If you raise the taxes of United States businesses they will become less competitive and the world is going to find someone else to do business. This will result in both fewer jobs and less government income. The middle class and the poor will suffer the most.

It’s a fact that the last time the capital gains tax was increased the government brought in less revenue. It’s a fact that the last time the capital gains tax was decreased by Bush the government’s revenue increased!

When Obama was asked about this he said: “I would look at raising the capital gains tax for purposes of fairness“. Instead of looking at the capitals gains tax for what’s going to make America the most revenue, Obama is going to raise it due to what he calls “fairness”. That doesn’t make any sense to me.

The truth is that the rich and small businesses are America’s best customers who are already paying the highest percent in taxes.

The rich fall into the 35% tax bracket.
The average household falls into the 25% tax bracket.
And the poorest fall into the 10% tax bracket.

So, basically as a business owner that’s increasing wages and adding jobs to America I’m already paying about 50% more in taxes than the average citizen.

I honestly wouldn’t mind my taxes being increased if it meant decreasing our nation’s debt. However it’s upsetting that Obama wants to raise my taxes to add further debt to America. You can only tax the rich so much, or heck you can take 100% of their money, and it’s still not going to be enough to pay off the debt. It doesn’t take a genius to see that on our current course America is going to have no choice but to bankrupt itself if something doesn’t change and neither candidate seems up to taking on this challenge.

A democracy fails when everyone votes to give themselves money, and that’s what this election is about. The middle class and the poor far outnumber the rich and Obama is winning votes by promising more money at the expense of the horrible small businesses such as HostGator. It may not be what’s best for the country but it is a great way to win votes! I mean after all who cares if the tax revenue decreases when you raise the capital gains tax since it’s a matter of “fairness”.

According to the Wall Street Journal — 40% of income earners pay zero, zip, nada, in income taxes. Obama’s plan is to give people paying zero in income taxes $1,000 a year for nothing. I can’t seem to comprehend why Obama is going to use hard working American’s money to pay someone who isn’t working hard and not even paying a dime in income taxes. This money is coming from all three classes the poor, the middle and the rich. Is that what he calls “fairness”? Sounds more like welfare to me.

What we need right now is a president that says we have harsh times ahead, but shows that we’re going to make cuts and get through this together. If you have thousands in credit card debt you can either squeeze a few more lobster dinners out of it or you can suffer and start eating Ramen Noodles. America needs to start suffering and start eating Ramen. This isn’t the time we should be voting for our last lobster dinner.

Sources:

http://www.fas.org/sgp/crs/natsec/RL33110.pdf

http://taxprof.typepad.com/taxprof_blog/2008/06/comparison-of-t.html

http://www.brillig.com/debt_clock/

http://money.cnn.com/2003/06/11/pf/millionaire/millionaires/index.htm

http://online.wsj.com/article/SB121910303529751345.html?mod=most_emailed_day

photo credit: the_real_cjs

Posted in

Gator Politics, World Gator
Comments
  • http://tristantom.com/ phototristan

    It’s not Socialism to ask the rich to pay the same percentage of their income as the middle class and the poor. That’s called ‘fairness’.

    Warren Buffet, the richest man in the country, pays a lower tax rate than his secretary and believes this needs to change:

    http://www.bloggingstocks.com/2008/10/27/warren-buffett-i-should-be-paying-more-in-federal-taxes/

  • http://fourmuellainc.net Ben

    This is pretty biased.

  • brent oxley

    @phototristan: That’s not exactly true.

    Most of Warren Buffets income comes from dividends that his company Berkshire Hathaway issues. It is correct that he personally is only taxed 15% on these dividends however what is conveniently left out is that the company was already taxed 35% on this same exact
    income.

    It’s double taxation….
    http://en.wikipedia.org/wiki/Dividend_tax

    So if you factor that in he actually paid 35% corporate income tax +15% dividend tax which is 50% while his secretary paid a 30% tax. I’m sure the secretary has some Berkshire stock so she also got taxed the double tax of additional 15% after the corporation paid 35% taxes on the stock that she owned.

    I’m 100% owner of hostgator and the majority of my income comes in the form of dividends. Since I’m 100% it all passes through and I’m able to avoid the double taxation and only pay the 35% rather then 35% plus 15%.

    Like I said I don’t mind my taxes being raised to help pay off our country’s ever increasing debt, but I don’t want it being raised to only add debt faster. American can’t keep increasing the national debt forever eventually the middle class taxes will be increased. You can choose the last lobster dinner now, but eventually that debt is going to have to be paid.

  • http://www.hostgator.com Mixed

    maybe the people who do not pay taxes need to start paying taxes. That too is called “fairness”

  • shortcircuit

    I second the vote to Brent Oxley…you rock!

  • David Mckendrick

    I stopped reading at:

    “This, of course, seems much better to me than Obama’s relying on the United Nations and resolving issues in a “diplomatic” way. The U.N. is a joke, which is why major atrocities and genocide are happening in places like Darfur and Burma.”

    I almost wish a similar incident upon countries like the U.S. as a result of what has gone down in Iraq. Iraq was not an aggressor towards the U.S. and was attacked nonetheless for Weapons of Mass Destruction that simply did not exist. The remnants of the blog are uninteresting as they deal with economics — despite being an Economics major, picking from neither group is going to solve your economic problems. Only you can.

  • http://mtbzu.com Zachary Zaras

    That is a very good way to look at it. My Father and my Grand Mother are both small business owners and both do not like Obama. Why should they get taxed more to give the free loaders more money. My father is against Wellfare and he will tell you that flat out. There is no reason for it. Why give the people who do not want to work money? That is not “Fairness”

  • http://michaelyork.org Michael York

    Brent,

    I’m all with you and McCain. Right on!

    @mixed: “maybe the people who do not pay taxes need to start paying taxes. That too is called “fairness”.

    That would be nice, huh.. =)

    42.2% of Americans did not pay income tax last year according to the IRS.

    –Michael

  • http://sem-group.net/search-engine-optimization-blog/ Gerald Weber

    Oh no the outcome of the “Nerd Vote” does not look encouraging.

    As Jesse Ventura says “If you pick the lesser of two evils you are still picking evil”

    Personally I’m a “Ron Paul republican” however in the spirit of not wanting Obama and his socialistic ideas in office I’m going with McCain. However I don’t really feel good about this guy either.

    I really really hope Obama does not win.

    Let’s hope for the best.

  • Rick

    Hey Brent.. the “in your moms box” comment is a sexual innuendo… not sure if you would publish it if you knew that? *heh*

  • Mike Nutt

    Interesting that you’d venture to post this on your “official company blog.” Just curious, do you not care that some of your customers might be alienated by your politics, or is it that you’d rather have McCain supporters as customers? I would venture to guess that this will cost you some customers.

  • http://tristantom.com photoTristan

    @Mike Nutt – Why would that be alienating? This is a free country and everyone is entitled to vote how they see fit to vote. Because the CEO of any company I use for hosting or buy products from chooses to vote differently than myself doesn’t automatically make me want to leave that company.

    If they told their customers, you cannot use our services if you don’t vote a certain way, that would be un-American. But, I see absolutely nothing wrong or un-American about having a viewpoint and sharing it with your customers.

    What’s really bad is this woman, who would only give out Halloween candy to McCain supporters. What a witch – http://www.youtube.com/watch?v=jbkBE0lWeYU

  • Arturo Bandini

    “@Mike Nutt – Why would that be alienating?”

    Um, because maybe some of the customers (like myself) don’t want to put money into the pocket of a lunatic dittohead?

    Just a guess.

    But I’m moving my sites.

  • Chris N

    I have to agree here. Why should those who learn valuable skills or get degrees to earn a better than average salary have to be penalized, while those who do not work and have no ambition to better themselves take some off the top and middle?

    The economy is not going to be fixed by the government giving handouts to the poor. The economy is only going to be fixed if the poor and middle class stop living beyond their means. Too often I see someone making 20,000 a year buying a 40,000 SUV. I have friends that make barely a living wage living paycheck to paycheck because they eat pizza hut 5 days a week instead of cooking some ramen. Government intervention is not a substitute for fiscal responsibility.

  • http://sem-group.net/search-engine-optimization-blog/ Gerald Weber

    @Mike Nut

    Also to quote Jesse Ventura again “Voting is not like going to the horse races, you aren’t going there so you can pick the winner and brag to your friends , Hey I picked the winner! It’s about voting your heart and your conscious. I don’t see why Brent Oxley can’t do the very same on his company blog.

    It’s doesn’t always have to be about being the most popular or what sells the most. He is just being real.

  • Kristen

    I respect Brent for not only this blog post, but the many posts he has made. Brent is a strong believer in his own ideals and does not care who knows it. Of course it is unfortunate that he may have lost a few customers, but knowing Brent, I believe that he considers it important that his beliefs are known.

    Unfortunately the outcome is not as Brent or myself would have wished, but at least the truth has been spoken.

  • Tom

    I agree with you on so many levels. I wrote in Ron Paul today and it felt good. I think more Americans need to lose their sense of entitlement and then we can finally abolish the Fed and IRS. Great blog!

  • brianm

    Hey guys, I think this story may help explain Brent’s point… One of my friends sent this to me the other day and thought you guys would enjoy it. Please keep in mind this is just a story.

    Obama’s leaky plumbing

    Barack Obama discovers a leak under his sink, so he calls Joe the
    Plumber to come and fix it.

    Joe drives to Obama’s house, which is located in a very nice
    neighborhood and where it’s clear that all the residents make more than
    $250,000 per year.

    Joe arrives and takes his tools into the house. Joe is led to the room
    that contains the leaky pipe under a sink. Joe assesses the problem and
    tells Obama, who is standing near the door, that it’s an easy repair
    that will take less than 10 minutes.

    Obama asks Joe how much it will cost.
    Joe immediately says, “$9,500.”
    “$9,500?” Obama asks, stunned. “But you said it’s an easy repair!”

    “Yes, but what I do is charge a lot more to my clients who make more
    than $250,000 per year so I can fix the plumbing of everybody who
    makes less

    than that for free,” explains Joe. “It’s always been my philosophy.
    As a matter of fact, I lobbied government to pass this philosophy as law,
    and it did pass earlier this year, so now all plumbers have to do business
    this way. It’s known as ‘Joe’s Fair Plumbing Act of 2008.’ Surprised you haven’t
    heard of it, senator.”

    In spite of that, Obama tells Joe there’s no way he’s paying that much
    for a small plumbing repair, so Joe leaves.

    Obama spends the next hour flipping through the phone book looking for
    another plumber, but he finds that all other plumbing businesses
    listed have

    gone out of business. Not wanting to pay Joe’s price, Obama does
    nothing.

    The leak under Obama’s sink goes unrepaired for the next several days.

    A week later the leak is so bad that Obama has had to put a bucket
    under the sink. The bucket fills up quickly and has to be emptied every
    hour, and there’s a risk that the room will flood, so Obama calls
    Joe and pleads with him to return.

    Joe goes back to Obama’s house, looks at the leaky pipe, and says
    “Let’s see – this will cost you about $21,000.”

    “A few days ago you told me it would cost $9,500!” Obama quickly fires
    back.

    Joe explains the reason for the dramatic increase. “Well, because of
    the ‘Joe’s Fair Plumbing Act,’ a lot of rich people are learning how
    to fix their own plumbing, so there are fewer of you paying for all the free
    plumbing I’m doing for the people who make less than $250,000. As a
    result, the rate I have to charge my wealthy paying customers rises every day.

    “Not only that, but for some reason the demand for plumbing work from
    the group of people who get it for free has skyrocketed, and there’s
    a long waiting list of those who need repairs. This has put a lot of my fellow
    plumbers out of business, and they’re not being replaced – nobody is
    going into the plumbing business because they know they won’t make any
    money. I’m hurting now too – all thanks to greedy rich people like you who
    won’t pay their fair share.”

    Obama tries to straighten out the plumber: “Of course you’re hurting,
    Joe! Don’t you get it? If all the rich people learn how to fix their own
    plumbing and you refuse to charge the poorer people for your services,
    you’ll be broke, and then what will you do?”

    Joe immediately replies, “Run for president, apparently.”

  • http://www.hostgator.com patrickp

    For the people who are saying that we would lose clients because Brent is a McCain supporter..

    Even though Brent was a McCain supporter everyone seems to be overlooking the fact that the company as a whole heavily favored Obama.

  • http://www.narayan.com.np narayan

    Nice to read… in detail..

  • Adam

    LoL as a matter of fact I find this funny and it was an interesting read. Cool to know the president of the company is open to share his opinion, as for costing him customers…

    In my opinion customers don’t pick their products based on the business owners views of politics, so long as its a quality product or service.

    We looking at world class here!

  • Daniel Gardner

    Well said Brent. You’re gonna take a lot of flack for that, but it’s still a great post.

  • http://www.hostgator.com Seth

    Well, sir, while I might not agree with what you say, I will defend to the death your right to say it!

    Majority of Americans fail to realize that everything the Presidential candidates promise, they can’t follow through on. They don’t have the power. They can only sign it, or veto it.

    I personally believe we need to pay more attention to our local reps, as they are the ones that are actually working for us.

  • Rob

    Now I know where Brent stands, I will certainly continue to support Hostgator. Good on ya Brent! About time someone stood up for your side.

  • Steve Bryant

    I love hostgator even more now. PALIN 2012!

  • David

    Hey Brent,

    Great post…I knew I liked hostgator for a reason other than the great hosting.

    Here’s something to try. For all of your employees that work really hard and do a great job, but voted for Obama. Tell them you are going to give them a raise for doing such a great job, but instead of giving them the raise take that money and give it to the bum on the street who chooses not to work. See if they like their hard earned money given away. I bet they won’t like it, but you can just tell them you are “spreading the wealth”.

  • Mike

    Cool post! It’s nice to see someone that’s not afraid to publicly admit they don’t vote for socialists–even against the advice of savvy political gurus like Puff Daddy.

    I’m also surprised that “in your mom’s box” didn’t get more votes. I blame it on low voter turnout.

    I think this post also shows the crybaby site of Team Democrat. Even when their candidate wins, they whine about their host voting with his own brain and want to switch hosts based on that?

    I’m thinking about starting Democrat Hosting, Inc. It will be run from a single 486 on a 56K dial-up connections but that won’t matter because I’m going to have a single-post company blog that says I voted for Obama. I’m expecting to pick up all of your customers leaving because of how you voted. :P

  • Anand

    I am an Indian citizen, but still in our country too a lot depends on US for many reasons and it also effect us who has been selected. I hope in ou country too we may get that good politicians.

  • http://www.richbeyondwords.com Claudia

    Hi,

    I moved all my hosting from Austria to Hostagator. It was recommended to me by the Thirty Day Challenege crowd. And I must say I am delighted with the excellent service and friendly people.

    But back to the voting thing, at this stage we all know Obama has won the election and still has to proove himself.

    I for one live in a Socialist country and seriously it’s not bad. So what I’m taxed more but I don’t care. I like to know that every one has the basics. I don’t feel nice if I’m having all the good and others are not, even if they are too lazy to work. Let’s face it what the government gives them isn’t exactly high standard – it’s minimal. I count myself as blessed for using my god given talent and being motivated enough to think out the box.

    It’s the same with so many people that ask me how the economy has affected me. Seriously it hasn’t. It hasn’t made a difference in my life. Firstly I never spend money I don’t have and secondly I never bought into the whole wall street hyppe.

    I’ll admit I find it disconcerting when the state begins privatising everything because then they have no income of their own and have to tax us more. I thought it was okay for the state to own the railways, post office and stuff like that.

    As for the health system I sometimes use the state offer and other times I use private doctors. Depends where the charming doctors are but I think it is good that hospitalization and medical assistance is available for every one no matter what their back ground. Also here in Austria we are given family assistance which is for every family rich and poor alike. You get about €174 a child per month. Some people need the money to live, others save it, invest it what ever. But each person that is an Ausrian citizen and has kids is entitled to the money.

    Anyway thats my take.

  • Joe

    Too bad…was checking things out and just on the verge of signing on when I discovered this post. Not only do I disagree with pretty much everything you said, but it’s REALLY hard to fork over my share of your fees when you’re asking me to feel sorry for you because your taxes are higher than others (at least by your own estimation.) A self-serving small-minded complaint at best. One thing that isn’t in your own service is presenting this kind of personal polemic on your business site. Chased me away, anyway.

  • goddess_dix

    only one Ron Paul vote in your survey? and you call yourself nerds?

    LOL

  • Ryan

    I’ll definitely continue purchasing hosting accounts, as well as referring everyone to host gator.

    I’m not sure if Brent is overly worried about losing accounts, I think Republicans are typically the business owners who provide the real volume and longer lasting business relationships with host gator anyways.

    I don’t think Brent needs to prove anything to his employees. Right now, he is overstaffed sometimes according to a previous post. His Obama loving employees will quickly realize the downfall of the Obama rape-the-business-owner plan when Host Gator, and Brents personal taxes skyrocket and he has to lay off a few employees.

  • http://vexter.com Mike

    Great post and it’s good to know a business owner is so passionate that he would post his views. While looking for new web hosting I ran across your site and the blogs. While others may have stated they would leave or whatever I found the opposite true. Honesty in my opinion should be highly valued and the side stepping and dancing around subjects is irritating at best. You have a new customer. Thanks.

  • http://www.simplifieditsolutions.com Juan

    I just signed up for your hosting services yesterday. After reading this post I am glad I did because I like doing business with companies that share the same values as I do.

    Keep up the good work. So far I am very pleased with the product you provide and the service you provide along with it.

    Thanks!

  • http://www.simplifieditsolutions.com Juan

    Don’t worry about Joe. He ran away and I came running.

  • http://www.creditrepairfirms.net credit repair firms

    This advice is really going to help, thanks.

  • http://www.synapticjelly.com Sarit

    Brent fails to mention that the people in the 35% bracket don’t file their taxes just like the people in the 10% bracket.

    What he is not telling you, is that if you have enough money, you can work the system in your favor. What’s the secret? Deductions!!! That’s what I do, cuz I have money. When I started working, I was single, rented an apt, had no children, no tax-deferred ret. fund, and making no where near what I make today. Fast forward to today, and guess what, I’m not only paying a lower % rate than before, I’m actually paying a lower $ amount. I also pay a highly trained tax guy to do my taxes and find all imaginable ways to let me pay even less tax. And on top of all that, his fees are, guess what,…TAX DEDUCTIBLE!

    Now lets talk about Corp tax. You see corps only get taxed on profit. That means after all the bills, the rent, employees, etc are paid first, then whatever’s remaining gets taxed @ 50%. So at the end of the day if your company has enough to pay its employees, enough pay for the costs of running the business, enough to pay for reinvestments in the company and you’re still left with cash left over you get taxed a high rate. Does it hurt your company? No. Does it hurt your stock holders looking for a fat dividend, yes.

    Now lets compare this to poor people income tax.
    Do they get to write off their:
    -Rent? No.
    -Food? No.
    -Utilies? No.
    -Medical expenses? Not, unless the spend a certain % of their income, and know how to file their taxes correctly to get that benefit.

    What happens if the people in the 10% bracket spend 95% on food/shelter/clothing? -> They get to owe the government money.
    What happens if corps spend 95% on “expenses”? -> They pay 2.5% in taxes and keep the rest.

    Now lets talk about sales taxes. Suppose you spend 100% of your money on taxable items, what is your effective tax rate? Now suppose you spend only 10% of your income, what is your effective tax rate then? Now if you’re making enough to be in the 35% tax bracket (and you’re not an idiot) most likely you will be putting most of your money into “investments” that make you more money and not spending it all.

    Now how much do you suppose is being spent on taxable items? How would you spend if you had the income of someone in the 10% tax bracket? You’d probably be spending much more and “investing” much less, than the 35% tax bracket guy?

    To have a truly “fair” tax, we would have to either eliminate many of the deductions we have today, or somehow access what a real cost of living should be such that we can accurately assess an individual’s “profit”, like we do for businesses. Ironically, nobody who advocates a “fair tax” ever brings this point up.

    Sorry for such a long rant, but there are a lot of people claiming they want a “fair tax” when in fact it is just conservative propaganda. I’m not saying that Mr. Oxley is in any way purposefully trying to mislead people. I believe he is a honest, respectable person, running a honest, respectable company. I’m more inclined to think that this propaganda is highly effective at stirring people up into the conservative way of thinking. And it is easy to see how it works, when people cherry-pick the data, make apple to oranges comparisions, and gloss over important details.

    Lastly, I think the conservative movement is simply an awesome propaganda machine. I would never have imagined that it could convince hard working poor people that poor people need to pay more taxes because the poor are deadbeats. That the “high” taxes on the rich is unfair to the rich. With such skill you’d expect them to run for President, wait… they did!

  • http://www.hostgator.com Brent Oxley

    Hi Sarit,

    -Rent
    Writing off rent only really benefits a company when you are a very small operation working from your home. You aren’t allowed to write off all your rent only the portion of your home / apartment used as “office space”. When we were a smaller operation I was able to write off about $100 a month of my rent. Now that we have an office building I no longer write off any of my home expenses. Back in the day I was very far from being in the top tax bracket. I don’t believe there are many businesses working from their bedroom in the top tax bracket.

    Food- This is definitely the biggest perk when it comes to write offs when you are smaller. Now a days when we go out to dinner the cost far exceeds the benefit of the write off. When we go out as the owner I usually endup paying for everyone’s dinner. The people that benefit off this the most is my employees not me. The majority of people don’t really understand what a write off is….

    If I get to write off $100 due to a business dinner that does not mean I’m $100 Richer. It actually means I’m $100 poorer since it was spent on dinner and my employees. Essentially all the write off means is that I no longer owe $35 dollars in tax on that $100 I would profited had it not been spent on dinner.

    -Utilies? I don’t remember taking advantage of this, but if I had it would have only ended up saving probably $30 a month in electricity at most in the form of a writeoff.

    -Medical expenses? Medical expense write offs benefits the employees far more then it does the employer. We are spending a few hundred thousand a year on providing medical benefits. I don’t have to spend about $70,000 in taxes on that $200,000, but I no longer have a single penny from that $200,000. It was spent on the employees. If we didn’t have medical benefits I would be $200,000 richer a year. ($130,000 after taxes) It would be craziness if I had to pay taxes on money that I never received.

    What happens if corps spend 95% on “expenses”? -> They pay 2.5% in taxes and keep the rest.

    There isn’t much to keep if they spent it on expenses.

    If a company made 1 million dollars but 95% was expenses that means they profited 5% which is $50,000. Now if they are in Texas they have to pay a 1% franchise tax which results in that $50,000 profit becoming $40,000. That $40,000 is now taxable at a 25% rate federally which means they just lost another $10,000.

    This translates into the owner of the million dollar business taking home $30,000 to live on a year when all said and done.

    I’m not a fan of our tax system! I can guarantee the amount of money I lose paying our accounting firm to prepare our taxes along with our in house accountant far exceeds the amount of any “write offs” I could ever profit from.

    I’m a huge Ron Paul supporter and his beliefs on taxes. Anyone reading this comment, I highly recommend you watch the Obama Deception.

  • http://www.synapticjelly.com Sarit

    I think you’re sorta missing my point, but I’m glad you brought up the franchise tax because it illustrates what I’m trying to say.

    My point is that the 10% bracket people are on a tax system that resembles a franchise tax at 10%, whereas the bulk of the corp tax is levied against the profits. Now given 95% expenditure/5% profit example company that we have been discussing, would you prefer to have a 10% franchise tax or a 50% corp tax (assuming that you only needed to pay one of them)?

    Let’s run the numbers:
    A $1 million revenue company would be charged $100k for 10% franchise tax, regardless of how much it spends. If it only makes $50k profit, then it’s bankrupt. However if it only has to pay a 50% corp tax, its tax is only $25k.
    So in this scenario it would be foolish to want to be taxed like a person in the 10% tax bracket.

    Also, a take home of $30k isn’t necessarily the only money you can get. Don’t forget that part of the 95% expenditure can be capitol investment. Meaning that you could direct extra profit (money you don’t need to live on) could be reinvested into your company in ways that increases your net worth without you having to pay corp taxes on it. Then if you decide to sell shares of your company, you’re able to recoup those deferred profits and only pay long term capitol gains taxes (15%-20%) on them.

    The problem I have with your post in general is that there are a lot of half-truths that appear to support your case until all the facts are revealed. For instance, although 40% of income earning American’s don’t pay income tax, does that mean that they don’t work? If they don’t, please let me know how I can be an “income earner”, not pay taxes, and not work, because I want to be in on that gig. Hell, I’ll take 10 of those jobs. In reality, many income earners work, but still don’t make enough to qualify for paying taxes (i.e they are below the poverty line) while others take advantage of the tax system so they can claim no tax liability. So in this regard, it seems like a knee-jerk reaction to say that you want those 40% of americans to pay more taxes. Certainly, I don’t think you are advocating that those who are really in poverty should pay more tax. I think what you want is a reform of the tax code that prevents people who are not in poverty from claiming that they are.

    The next half-truth is that you claim the $1000 check for non-tax payers amounts to wellfare. While you are partially right you neglected to mention that this is a Child Tax Credit. So is giving working low-income families with children welfare a bad idea? It depends on your goals. If your goal is to keep them out of poverty, then its a bad idea, but if your goal is to get people to spend it, then I can’t think of any better group that is more likely to spend it. Since this is a stimulus package, then it makes sense to give money to those that will produce the most stimulus. Weren’t you the one saying that government should do what makes them the most revenue even if that means lowering capitol gains taxes? Why are you now against giving money to those that will cause the most stimulus even if it means people who don’t pay taxes get money? Doesn’t this sound hypocritical to you? Secondly, the stimulus is not a redistribution of wealth (you didn’t say it was, but some commenters are), it is in fact a loan, to be paid off by future tax payers. Some of the poor today may be paying for it in the future. Some of the rich today may be poor tomorrow and avoid paying. Then again, it all depends on future tax laws so maybe the conservatives will take over and make the poor pay for all of it, thus no redistribution of wealth.

    Also the whole talk about Warren Buffet income being double-taxed is yet another half-truth. Ironically, the second paragraph of the “Arguments in favor” section of the wikipedia link you provided sheds light on the fact that “the same cash stream is often taxed any time it exchanges hands in many other instances”. Essentially, since everyone is multi-taxed if you think about it, it seems arbitrary that you would single out the dividend tax for double taxation, but exclude all other forms of multi-taxation that the secretary might pay. In the end, the only reasonable way of comparing income taxes are to consider taxes that are applied to your actual income and not the taxes that a company paid at some point before you could be paid.

    If HostGator was a Corp, and you were the sole owner, then yes, it would seem that you would be double taxed, but that is only because you are not creating a distinction between your company profits and your income. By making a Corp, you are declaring that you and the company are two separate entities (which is why you get the liability benefits). In this way, the corp is taxed once and when you get your dividends, you get taxed once.

    For the record, I’m not a fan of our tax system either. Given the choice, though we would probably fix it in completely opposite ways. :)

  • http://airtelcoolhacks.blogspot.com ankit

    This is exactly what I want

  • Caresse

    This is pretty biased.

  • http://www.sidsplumbing.co.uk/ SIDS Plumbing

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