How is Obama's budget going to affect small businesses ability to create jobs?

Okay, it is well known now that taxes on households making over $250K or individuals making over $200K will go up. What I don't understand is why people saying this will hurt small businesses ability to create jobs? I'm a small business and have yet to break $250K in sales per year. To me, what limits my ability to create jobs is actual sales of my services and not the tax rate. My structure is LLC by the way and I use Schedule C. My business is selling services not products. So, it's purely man hours that generate revenue. Example: I make $140K and don't hire anybody, I get taxed for $140K profit. Now, say, I generate $400K in sales (maybe a fed gov contract). If I hire just one person and that person makes $150K/yr, I get taxed for $250K. But if I create TWO NEW JOBS by giving the first person junior subordinates at $50k/yr per person, my profit now is only $150k. I pay my employees or subs first before I pay taxes anyway. This is simplified example: no G&A and all those other expenses. So, how is Obama's plan's "tax increase" going to affect my ability to create jobs? I don't get it. Please explain. Thanks! Paul, you pay your people first before you pay Uncle Sam, don't you agree? Your explanation doesnt make sense since you're implying that Uncle Sam takes your money first before your business expenses (like employees) get paid.

10 months ago - 1 answers