When John Kline (R-MN-02) was pushing HR 9 The Small Business Tax Cut Act, which would give a one-year, 20 percent tax cut to every business with 500 or fewer employees, it was noted that would benefit not just the local shops on main street but also sports enterprises. Thus a “small business” like the Super Bowl champion New York Giants, which has about 210 employees and made $1.3 billion last year, would get a tax cut. Of course, the legislation comes at a cost as the CBO states the deficit would increase by $45.95 Billion … and the one year of tax savings provided by the bill is unlikely to make the costs of much investment in physical capital or labor recruitment and training worthwhile.
The Republican-controlled House approved HR 9 on April 23 and the Senate has wisely let it sit in the Finance Committee.
So while that legislation is still in limbo, I wondered how the sports entertainment business was surviving … well, Sunday, Major League Baseball had its best day since the Banking Crisis of 2008 as baseball games across the country attracted 581,680 total fans, the largest single-day attendance for 15 games since Aug. 23, 2008.
Overall attendance is currently up 7.6 percent ahead of the total through the same number of dates in the 2011 season.
And its not just baseball … the previous weekend, Mankato hosted an air show … the official attendance for the air show won’t be known for a few more days but it appears that about 35,000 paying customers attended the two-day event.
Another story that tells us a little about Minnesota’s economy was in the Strib “Stronger than expected sales tax collections in May helped Minnesota’s budget outperform estimates by state finance officials. The state’s general fund took in $1.3 billion in May, $32 million more than forecasted. Since February, tax revenues have surpassed estimates by $148 million, according to a new report by Minnesota Management and Budget. Minnesotans paid $380.3 million in sales tax in May, $37.4 million more than expected. Tax collections from businesses surpassed predictions by nearly double, coming in at $42.9 million.”
Remember, sales taxes are not applicable to some of life necessities — food and clothing … plus manufacturers can get exemptions for electricity used in production.
Maybe the economy is not doing that bad.
Somehow, I suspect that the fans at the baseball games or air show probably had forgotten about President Obama’s June 8th remark that “the private sector is doing fine” … but that quote will haunt him as I was reminded by someone today — because Bill O’Reilly said it will cost him the election.
For the record, the six words should be taken in context of the matter being discussed – the need to improve the overall jobs situation and for Congress to approve a effective “Jobs Bill” that he says would help the economy during this period when the economic recovery is stalling.… and the complete quote was :
“We’ve created 4.3 million jobs over the last…27 months, over 800,000 just this year alone,” the president said, “the private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government, oftentimes cuts initiated by, you know, governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility of the federal government in dealing with fewer revenues coming in.”
The “six words” were evaluated by ABC News :
But is the president correct?
Are private companies “doing fine”?
Compared to the public sector, the private sector is growing substantially. In May, the government shed 13,000 jobs while private companies added 82,000 employees.
Over the past year the private sector has added nearly 2 million jobs and GDP has grown by 2 percent. According to Christopher Thornberg, an economist and co-founder of Beacon Economics, that is a “normal pace” for growth.
“Why it seems so painful is because we had that recession,” Thornberg said. “We had the trough of the economy and then started growing at a normal pace. We haven’t had that catch up.”
The public sector, on the other hand, has cut 161,000 jobs over the past year, the vast of which came at the state and local level, where payrolls have decreased by 111,000 since May 2011.
The reaction proves that old adage is true : The difference between a Recession and a Depression occurs when your neighbor is out of work that’s a “recession” but when you are out of work, that’s depressing.
Let’s be honest … some doing very well … others are doing well … some are doing okay … but some have some real challenges.
Reviewing President Obama’s comments is analogous to Triage decision-making … let’s face it, the Banking crisis sent the economy to ER … in Triage decision-making through initial assessment, patient care is prioritized on the basis of appropriate consequences.
President Obama was making Economic Triage decisions … the private sector has been given help … big corporations are sitting on piles of money even as the Congress enacted legislation to raise the borrowing limits for the Import-Export Bank that predominately helps large corporations.
Further, we sometimes forget that the 2010 tax deal that kept the Bush tax rates where they are for the middle class, did the same for the highest-income families. The deal also introduced the temporary payroll tax cut for everyone — that tax cut put more than $2,000 in the pockets of those making six figures or more in salary.
For small businesses, President Obama has signed a number of tax cuts … many for manufacturing … for example,
A New Tax Credit for Hiring Unemployed Workers;
Bonus Depreciation Tax Incentives to Support New Investment;
75% Exclusion of Small Business Capital Gains Expansion of Limits on Small Business Expensing;
Five-Year Carryback of Net Operating Losses;
A New Small Business Health Care Tax Credit ;
But most people do not remember — or just listen to Bill O’Reilly preaching doom — and fail to seek the facts.
Such was the case with the woman, who quoted Bill O’Reilly, continued to tell me that a small business owner told her that ObamaCare was killing his company.
Naturally, I was surprised because unless his business involved Tanning Beds, regulations involving ObamaCare has not taken effect yet.
She explained that he ran an automotive repair business and he wanted to hirer more workers, but ObamaCare penalties were too severe. I asked, how many employees he had and how many he thought about hiring … she responded 22 and would add a couple.
Hmmm … QUERY : Is it a TRUE statement that every business will have to provide health insurance coverage ?
Employer Requirements Under the Law
There are no requirements on employers with 50 or fewer full-time employees.
Larger employers — with 51 or more workers — will have to make a payment if they don’t offer insurance. The penalty is $2,000 per full-time worker, excluding the first 30 workers.
There’s no penalty for not offering coverage to workers who are only part-time.
Businesses that provide coverage must make an affordable offer to employees, who can’t pay more than 9.5 percent of their household income for insurance. If they do, they’ll receive a tax credit to buy their own insurance on state-based exchanges, and their employers will be assessed a payment of the lesser of $3,000 per employee receiving the credit, or $2,000 per employee, excluding the first 30 workers.
Small businesses with fewer than 25 workers and average annual wages under $50,000 qualify for tax credits. They must contribute at least half of the premium costs. For 2010-2013, the credits cover up to 35 percent of a business’ contribution. Starting in 2014, the credit goes up to 50 percent of the employer’s contribution for two years.
So not only was this factually a misstatement, as a small business with less 25 employees, he could get a tax break when the insurance was provided.
When people are attending baseball games, and waiting in lines to buy the latest gizmo released by Apple or a video game company, suggests that people are spending disposable income … but when “six words” can determine an election, which is sad … and sad that so many people are misinformed.
Instead of debating the merits of a Voter ID, we should be debating how to better inform citizens so the facts are known rather than allowing Media-talking heads (or Super-PACs using distorted commercials) to determine the election.
Besides those Media-talking heads and contributors to SuperPACs are the ones doing “Just Fine“.