. . . . . USA Today reader Scott Baron, an orthopedic surgeon, threatened to lay off some of his staff or cut the benefits for those who remain if the Bush tax cuts are not extended for high income taxpayers like him (“Tax hike on ‘rich’ hits bottom line,” September 17.)
. . . . . Because the economy is bad, he probably can cut benefits and get away with it. However that move would not be motivated by higher taxes. The reader pays income tax on his net income, after expenses. Everything he pays his employees is tax deductible. He could lower his tax by increasing benefits or hiring more people. I can’t imagine that many employers hire more employees than they need because they have “extra money” from lower taxes. The “lay off threat” is a bogus argument. Nancy Nichols, Deadwood, Oregon: USA Today 9/24/2010
. . . . . The impression offered through this liberal letter is that employers may hire more folks and reduce unemployment without much concern because there are some things that are tax deductible. This form of bas-ackward thinking is typical of liberal thought. This sounds more like liberals in government who spend money they know they don’t have, or take items “off budget.” Off budget sounds a lot like tax deductible, a slippery concept used to fool the casual observer.
. . . . . In business there are no free lunches. Hiring more folks or increasing staff benefits are not offset by tax deductibility. Other things being equal, increased costs must be covered by increased revenue. Without increased revenue, one must lower costs somewhere else, borrow to cover a shortfall, liquidate assets, or go out of business. Currently businesses all over the country are lowering costs by laying employees off. Many businesses are going bankrupt because they are unable to generate the revenue needed to break even. I guess these businesses never heard of hiring folks through tax deductibility?? Hello! Nancy are you there?
. . . . . Your certainty about the reader’s motives, and your statement that he is trying to “get away with something” is your projection, at best. Your conclusion that the lay-off threat is a bogus argument flies in the face of reality. It may simply be that he is planning to cover his cost of operations for the coming year, not knowing what his actual taxes will be. He is receiving no help in his planning from the liberals in power, who will decide his taxes at the last minute. Without this decision, he must plan on higher taxes January 1. Higher taxes are a cost of doing business, not a revenue from which other costs may be deducted.
. . . . . Reimbursement by the government is typically slow, requiring many weeks or months to cover expenses at all, and then they receive only a portion of their usual billing, a discounted amount. This delay and government discount must be covered through actual cash revenue, or through borrowing to cover the delay and reduced reimbursement. Because of this many physicians simply refuse to accept Medicare and Medicaid patients.
. . . . . If a revenue shortfall is anticipated, all options are on the table, whether benefits, lay-offs, or other adjustments. For the past many weeks, over 400,000 folks are being laid off every week because of business “adjustments” to revenue shortfalls. These are real folks, not idle threats. When businesses close or go bankrupt, their employees are put out on the streets to collect unemployment insurance. According to your buddy, Nancy Pelosi, unemployment insurance is one of the greatest stimulants to the economy. Exactly how unemployment benefits stimulate the economy Nancy doesn’t explain.
. . . . . Hello!!! Exactly what planet does Nancy Pelosi come from? Can we send her back?
. . . . . Is Oregon a planet, or is it simply out in space? Hello! Nancy from Deadwood. Only kidding, Nancy!