That is an easy question to answer: If you work in the private sector, Obama’s proposals to increase taxes on the people who own businesses could cost millions of people their jobs. If you work in the private or even the government sector, the job loss could possibly be yours.

 The formula is relatively simple. Every business requires a certain amount of working capital, i.e. money, to operate. The amount varies depending on the type of business. For instance, the manufacturing industry, which I know about, requires an average investment of about $125,000 per employee for buildings, machinery and working capital. Most of that money typically has to be borrowed. To employ 20 people, therefore, a company has to find a bank willing to lend $2,500,000, which the bank typically wants to have paid back over a 10-year period, or $250,000 per year. Add interest at 7 percent, or $175,000, and you have a minimum obligation of $425,000 per year or  $35,400 per month.

 The $175,000 per year interest is deductible from taxes on any profits the business might make. But the additional $250,000 principle they have to earn each year to pay the bank back is taxable, less depreciation, before they get anything for themselves. That tax is already one of the highest in the world at 35 percent, and Obama is proposing to raise it!  Consequently, many small business owners already make less in actual take home pay, after paying the bank and the government taxes, than many of their employees. I know because I am one.

 Now, Obama promises to make it worse by raising our 35 percent taxes higher. Either he doesn’t understand, or doesn’t care, that a lot of people are going to lose their jobs because of that tax increase. Jimmy Carter had our taxes at 70 percent; people got laid off and our economy collapsed. Reagan lowered them to 26 percent, our economy boomed, people got hired and the U.S. government received more in taxes the next year than it ever did before.

 Incidentally, to those of you in government jobs, when we in the private sector lose our jobs, there is less tax money to pay for you or fund your pensions. Therefore, guess what? You’re next! Think about that before you vote next Tuesday.

 David Eller, Publisher

10-30-08