The Jobs, Opportunity, and Business Success Act of 2009

 

“Cracker” ;  a pejorative (term of abuse or ethnic slur) term for a white person, mainly used in the Southern United States,  according to Wikipedia “Cracker” has been used among African Americans like Malcolm X and Black Panther Party during the Civil rights movement and is considered an anti-white ethnic slur among African Americans.  This is the term applied to supporters of Governor Sonny Perdue by columnist Bill Shipp in his column “Sonny snaps out of it” found in the Bryan County News (May 20 2009), when he referred to  the Governors “disgruntled cracker followers”.  (I was quoting the paper copy.  The link goes to The Monticello News which carried the same column as I can’t find the column on line from the Bryan County News.)

I had stated in a previous column I did not particularly care to respond to individual columnists.  In the case of Mr. Shipp I am making an exception.  Every time he writes a racial slur, a cultural stereotype, or other assorted terms of abuse, I will write about it.  I find it inappropriate for a syndicated columnist being carried by the Bryan County News-or any newspaper to use these stereotypes or slurs.

After six paragraphs slapping the Governor around a bit, Mr. Shipp apparently gets to the subject of the column; The Jobs, Opportunity, and Business Success Act of 2009.  As the bill was favorable to business and would actually leave some tax dollars in business and consumers hands, Mr. Shipp was of course against passage of this legislation.

The six provisions in the JOBS Act are contained in two bills, HB 481 and HB 482.

1.       $500 credit on unemployment tax to any business who hires someone currently on unemployment compensation for at least 60 days prior.

2.       Income tax credit for any business who keeps a previously unemployed employee for 24 months.

3.       Business start up holiday, exempting new startups from all state government fees to stimulate entrepreneurship.

4.       Eliminate inventory tax on businesses. This requires a referendum, thus the separate bill.

5.       Eliminate sales tax deposits, which are prepayments on projected sales.

6.       Gradual elimination of corporate tax, beginning in 2012, complete in 2023.

In the present time of 8.5% unemployment rate and a slowly recovering economy, allowing businesses to keep some of their money and use it to hire workers and increase inventory seems like a no brainer. 

Encouraging the hiring of new workers through tax credits is a super idea which would permit businesses to grow while eliminating some of the 400,000 Georgians from the unemployment rolls.  Encouraging new businesses to start up and grow through the use of a tax holiday again seems like an idea which would work creating wealth and a growing business class.   The inventory tax is a tax that should have disappeared a long time ago.  Georgia is one of 14 states which consider a business’s inventory of goods as property and taxes it as such.  A tax is again paid on this merchandise when it is sold.  Item six calls for the gradual elimination of the corporate tax, which in Georgia is a flat 6% based on the corporation’s net income.

When it comes to the elimination of taxes or fees paid by any corporation or business, a point that must be considered is they pay no taxes or fees; the consumer pays them in the form of higher costs at the register.  This is a hidden cost of government.  The consumer is paying a large amount of taxes and is not consciously aware of it.  When citizens want to increase taxes and fees on businesses and corporation; they are in effect asking to be taxed at a higher rate themselves.

H.R. 481 and 482 both passed legislation, but Governor Perdue vetoed the bills when they hit his desk.  This is the cause of Mr. Shipps gloating.  Mr. Shipp however fails to mention Governor Perdue said May 11 he vetoed the bill because Georgia constitutionally is required to maintain a balanced budget.

“For every dollar in decreased revenue, we must correspondingly cut expenditures,” Perdue said. “We cannot deficit spend as the federal government does, even if those deficits generate economic growth in the long term.”

He did, however, call the bill “well-meaning” in intent.  If I were the Governor, I would send the bill back to be rewritten to take effect in 2010 when the budget is not halfway through a fiscal year. 

Again, Mr. Shipp plays on class warfare and envy to make this bill sound as if it were written for the intent of making all the “rich people” richer.  Somehow, he comes up with the figure, “richest one percent of the state’s taxpayers would receive 75% of the benefits”. 

What is this one percent and how much do they pay in taxes?  This latest IRS data is shown in Table 1.  It shows that the top 1% of income earners now pay 40% of federal income taxes, while earning 22% of income. The top 5% pay 60% of income taxes while earning 37% of income. The bottom 50% of income earners pays only 3% of federal income taxes.

                             Internal Revenue Service data, 2006

                     Share of federal Income taxes         Adjusted Gross Income

Top 1%                            40%                                         22%

Top 5%                            60%                                         37%

Top 10%                          71%                                         47%

Top 25%                          86%                                         68%

 

Top 50%                          97%                                        87.5%

Bottom 50%                      3%                                       12.5%

Furthermore, the bottom 40% of income earners pays nothing. 

Why this major thrust to redistribute the wealth?  To create an artificial playing field?  The business owner is the person taking the risk; taking out loans, saving their money, borrowing off of relatives and credit cards to open a business and keep it running by working 12-16 hour days until it is operating reasonably smooth.  The business owner is the one putting up the costs of licenses, fees, insurance, and goods.  They are the ones paying the unemployment insurance, workman comp, matching social security, security bonds, etc.  When a business folds, the owner is the one who loses; the employee can (sometimes with difficulty) find another job.  Why does our government continue to “punish” those who succeed?  The “progressive” tax code we now have which is confiscatory in nature does just that.  It rewards failure and punishes success. 

When elements of this tax system are questioned or an attempt is made to change the code, the Bill Shipps of this country will always be in the forefront of the fight to “sock it to the rich and business”, all the while apparently never realizing the taxes he is applauding right now are actually a regressive tax which hits the poor harder when the costs of doing business are passed on to the consumer by business.

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