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Small business owners on the Buffett Rule

Two small business owners discuss how the proposed Buffett Rule might impact them, if at all.

Kai Ryssdal: On what was effectively the first day of the 2012 general election campaign, President Obama made another pitch for the Buffett Rule: Higher taxes for people making more than a million dollars a year. From the GOP and the Romney camp came criticism that the rule -- were it somehow to pass both Houses of Congress -- would hit small businesses and so slow hiring and hurt the economy.

Small businesses get used as props by politicians from both sides all the time. We picked up the phone and made some calls to check this one out.

Lew Prince: My name is Lew Prince. I am the founder and beloved president for life of Vintage Vinyl, a modest-sized record store in the city of St. Louis. We're about to celebrate our 33-and-a-third anniversary in the business.

Ryssdal: Ba-da-boom. When you say modestly sized, Lew, how big is that?

Prince: We employ 24 people. We're in the very low single-digit millions in growth income.

Ryssdal: If the Buffett Rule passes and people who make a million dollars or more wind up paying 30 percent at least on their taxes, is that going to bite you? Are you making a million a year?

Prince: No. It would actually take about a decade of my income to get even near the Buffett Rule. I actually was talking about this with my accountant. He has, he tells me, 400 small business customers and of them maybe four will be affected by it. That seems to be real consistent. It seems to be about 1 percent of the people who make any income off small business would be affected.

Ryssdal: If it's not tax rates to help you with your business, what do you need then?

Prince: I need educated people. I need the infrastructure to deliver my product. I need really good broadband everywhere so that I can compete with these countries that are moving ahead of us incredibly quickly in those areas. Those who are the most successful really should feel it's their patriotic duty to keep it going for the rest of the people.

Ryssdal: Lew Prince at Vintage Vinyl in St. Louis. Lew, thanks a lot.

Prince: Cool. Thank you, man.

Tom Secor: I'm Tom Secor. I'm the president of of Durable Corporation. We're a small manufacturer in north-central Ohio. We started in 1923. We make loading dock bumpers, wheel chocks, and floor mats.

Ryssdal: Small business, you'd say Mr. Secor?

Secor: Yes, 36 employees.

Ryssdal: As you look around at the political debate that's happening in Washington, and specifically this whole thing about the Buffett Rule and whether or not it would influence small businesses to perhaps not hire as many people as in the past, do you buy that? Is the Buffett Rule and tax policy one of the things that's driving your hiring practices?

Secor: The Buffett Rule specifically probably has little to no effect on me. I don't make a million dollars a year. The corporate tax rate, whatever it is, we don't pay that. For the vast majority of sole proprietorships and partnerships, they tend to run their business and at the end of the year say, 'I don't know, I should probably get money back 'cause I don't think I made anything.' I think in the bigger picture though, it is very indicative of what's going on in that there's this constant battle over picking winner and losers. And when that occurs, there's a general trend as whole to say, 'Wow. Do I really want to invest and grow and do something when I have no idea whether five years from now, when this thing starts to pay off, of all this work, if somebody is going to decide -- well, wait a minute -- they should take something from me.' So why should I do this?

Ryssdal: Tom Secor, he runs the Durable Corporation. It's a manufacturer in Norwalk, Ohio. Mr. Secor, thanks for your time.

Secor: You're very welcome.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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No entrepreneur I know or ever met worried about taxes when starting a company. Sure if you inherited the family business and fortune, I could see how maintaining wealth and minimizing taxes is important to you, but you are no entrepreneur. I'm one and I've sent big checks to the IRS when I sold, but I never cared because of the really big sum left in my bank account!
I'm amused how the conservative Republicans like to claim they are speaking for small business! They are really the mouthpieces for "vampire capitalists" like Romney and Bain Capital that prey on businesses for personal profit.
PS: Remember big companies like GE don't pay squat for income tax - they pay tax lawyers instead.

The top 1 percent of income earners paid 38 percent of all federal income taxes in 2008, while the bottom 50 percent paid only 3 percent. Forty-nine percent of U.S. households paid no federal income tax at all. If this isn't progressive, I don't know what is. All you have to do is compare tax receipts to government spending, and you'll quickly realize that even increasing taxes substantially will not come close to our outlays.

Personally, I don't understand the current left/mainstream media's fascination with European-style socialism we seem to be sliding towards. It hasn't worked there.

Small businesses need infrastructure and a healthy, educated workforce. So, if the community invests millions in schools, medicare and medicaid, roads and airports, will you mind paying a min 30% rate when you start earning over $1M a year? Or will you feel entitled to your wealth and forget the workers, vendors and community that supported and invested in your business?

Perhaps you will defund your training budget and cut benefits, use your employees to train staff in India before you right size them (regretfully) without severence and cash your bonus check, enroll your kids in private school, write off your "company owned" audi and complain about paying taxes?

3% of small business owners make 1 million. Many of them are rich owners of small businesses
in a conglomerate.
In 2011 all corp paid 12.1% Tax Rate on average. About 10% of total profits.

All Federal Taxes Paid As Percent Of Total Income(before deductions)
lowest 20%-5.0%
second 20%-9.5%
middle 20%-13.9%
fourth 20% -17.1%
next 10%----18.5%
next 5%------19.7%
next 4%------20.6%
Top 1%-------21.1%
Total=17.6% of 12,000 Billion Total Individual Income
#2 Least Taxed in OECD nations

Wonder why we have 15,000B of Debt?
Top Tax Rate cut 70% to 28%
Investment income cut to 15%
From 1945 to 1980 each percentile gained almost evenly, percentage, in wealth.
Need:Progressive Flat Tax by Group to pay our way(again)
Members of Congress and White House cannot accept anything with a current or future financial value.. Eliminate K Street and the Bribery.
Burn Tax book start anew

Corporate 35% Tax Rate a Joke
Corporate profits are not enough to make big cut in deficits
2011 they paid 12.1% tax Rate -less than 200 in 3800 budget. Wow!.
Take that out of Defense + Medicare fraud, over charges, and waste. Easily.
Why is Justice investigating an alleged 1 Billion over charge in Medicare by Lab Corp and Goldman Sachs? How did New Health Care Investigative Group get 8 Billion in refunds in two years? Fraud. Fraud. Fraud. Big $$$=Big Fraud
Eliminate Corporate Income Tax will boost economy by growth of new start up businesses.
Best read on fraud is Andy Pasztor-”When The Pentagon Was For Sale”.Detailed.
Hi rank Govt Officials to Jail and Big fines. Dept. Heads.

14000 total income
3800 budget
1300 borrowed

cut spend 10%=380
Add tax 10%=1400
1780 will pay down debt

I really liked this segment. I am a very strong Democrat (never voted for any GOP candidate) This segment seemed to really show the GOP as disingenuous. You should interview small business owners a couple times a month!

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