Thursday, December 27, 2012

Another Great Laugh from the Editors of the Wall Street Journal - This Time on the Boehner Plan B

Are They Just Making Merry for the Holiday Season?

No rational person can fail to be cheered up when reading an editorial from the ultra Conservative morons who pen that stuff for the editorial of the Wall Street Journal.  For today’s laugh here is their take on John Boehner’s so-called Plan B.

Consider the tax increase now being touted as a sign of "compromise." Speaker John Boehner has moved from opposing higher tax rates to offering higher rates for incomes above $1 million a year. While that's better than the scheduled increase on incomes above $200,000 a year (for singles), it would still put the GOP on record as endorsing a tax increase, in particular on small businesses that file individual returns.

What the Journal is referring to as small businesses are S corporations, partnerships and LLC’s that are pass through entities.  A business organized this way does not pay taxes, instead the taxable income flows through to the owners, who include the taxable income on their own tax returns.

And notice this little bit of tax illiteracy by the WSJ editors.

This isn't reform. It's another tax increase next year disguised as reform. The Fortune 500 CEOs who are lobbying Republicans don't mind because they hope to get a cut in the corporate tax rate. But small businesses will be stuck with a huge immediate tax increase, at least until their owners can scramble to reorganize as corporations instead of Subchapter S companies or LLCs.

See, first of all converting an S Corporation or LLC to a C corporation is about the easiest thing in the world.  But the reason most will not do it is because the S Corporation and the LLC’s allow tax free dividends, while C Corporations do not.  So this paragraph is tax nonsense.  Yes, you would think someone writing for the Wall Street Journal would know basic tax policy, but read what they say over time and it is clear that is not a requirement for authoring these pieces.

So under Mr. Boehner’s plan, which was never going to be enacted, (even Republicans opposed it) according to the Wall Street Journal a business is a “small business” that returns more than $1 million to each of its owners.  Well, if that’s the best you can do WSJ, that’s the best you can do.  But thanks for the early laughing, and we cannot wait to see your next installment.

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