I was pleased to read the article on Dec. 7. about the Utah County businessman who finally exposed the flaw in the $250,000-equals-rich doctrine ("Utah small business owners want tax cuts extended"). He is a small-business owner who is taxed on his business income, like all small-business owners, at his personal tax return rates.
He described what the U.S. Chamber of Commerce, the Republicans, the Blue Dogs, etc., have not articulated, which is that much profit is plowed back into a small business and never reaches the pockets of the owner. Nonetheless, the small-business owner is taxed on that sum. He could take home $80,000 a year and yet be taxed on another $300,000 that he never sees but is plowed back into compensating balances at his banks, working capital, etc. He most likely will have to borrow just to pay his taxes. No wonder that small businesses, the long-time engine of employment growth, aren't hiring.
Now let's expose another flaw. The Bush tax cuts are long gone, even if extended. Inflation, the 30-plus percent devaluation of the dollar's value since the cuts were enacted in 2001, and the progressive tax code have left them in the dust long ago. Here's why: One has to earn another 30-plus percent to have the same standard of living as in 2001. We all know that. Yet, by earning an additional 30-plus percent one has graduated into a tax rate that is at least a couple of brackets higher because of the progressive tax code. The government gets more, but one's standard of living ends up on the short end.
Richard D. Paul
Salt Lake City