National Review's "The Corner" blog defends the indefensible by printing a series of e-mails by readers claiming to be businessmen and professionals who say they'll fire half their employees, start smoking crack and leave the country for Andorra if, as under the Obama tax plan, they have to start paying 39.6 cents on every dollar they earn above $250,000 instead of the 35 cents they do now.
Some come up with convoluted justifications for a radical down-sizing of their businesses that seems only tangentially related to Obama's tax plan.
I have a few thoughts concerning your Corner post titled Bracketology. My wife and I are both Pediatricians. We own our own practice together. We have one PA and 7 other employees. We each gross about $200 K a year. We have 3 young children at home, 2 of which are not in school. We also employ an in home Nanny. My wife has been torn for years about not being at home for these children, which are our biggest investment in the future. We operate parallel S corperations (sic.) as PC's, with a 50/50 ownership of the LLC that is our business. We file taxes jointly. After crunching some numbers concerning the President's tax hike proposals, I have come to the following conclusions. If the President's plan is inacted (sic.), we will do the following:Of course all of the above could be done right now under the current tax system with similiar results, and with Obama's tax plan adding exactly $5000 to someone earning $400,000 per year, you've got to wonder if the missus was merely looking for a reason to stay home with the kids and the couple's hatred of Obama provided just the excuse they needed to take that step? After all, they are sacrificing $10,000 in income in order to avoid paying half that much in taxes.
1. My wife will become a stay at home mother.
2. At least 3 of my 7 employees will be released.
3. The practice will downsize to a smaller office space, i.e. less rent.
4. The number of patients cared for on a daily basis will drop by 40%.
5. My wife will come out of the forced ER call schedule for good.
6. I will gross $249,999.00 a year, exactly.
7. The net income of our personal home will decrease by less than $10 K a year from where it would have been if we changed nothing.
Other readers are more honest in saying that they intend to stop making money just to spite Barack Obama:
I am a tax accountant, don’t consider myself to be an idiot, and I am right in Obama’s income target range. I will be joining those looking to limit hours worked so as not to enter that 60% territory. Part of the motivation will be the self satisfaction of not contributing to the socialist cause.One concerned reader even included the following useful
Reagan used to tell the story about how when he was a movie actor he'd make 2 pictures a year, which would take maybe 8-9 months, then lay on the beach for the rest of the year. The reason was by the end of the second picture he was in the 90% tax bracket, and it wasn't worth all that effort to get another 10 cents on the dollar.Because you know what the directors all used to say back then: "If I can't have Hollywood's biggest star, Ronald Reagan, I don't want to film the movie!"
It didn't hurt him, he said, as he made plenty of money anyway. But what it meant is that the cameramen, set designers, sound people, etc had to go out and look for part time work the rest of the year.
(UPDATE: A commenter Media Matters notes that another way for employers to reduce their take home pay would be to simply pay their employees the difference between what they now make and $249,999... you know, if they're really all that terrified of jumping into a higher tax bracket and all.)