10/3/2012 11:37:00 AM Commentary It's the 'worst of times' for two job creators
By U.S. Senator Jon Kyl
Charles Dickens' A Tale of Two Cities famously begins: "It was the best of times, it was the worst of times..." Yet, for two Arizona business owners who recently visited my office, it can only be described as the worst of times.
Not only are these job creators up against the headwinds of a weak economy, but costly mandates and tax hikes enacted by the president and his allies in Congress are poised to crush their businesses and force many of their employees into the unemployment queue.
Bruce owns three restaurants in the Flagstaff area. He is currently deciding whether or not to renew a franchise contract on the third restaurant.
Moving forward with that renewal would not only maintain restaurant jobs, but would also create new construction jobs from the $600,000 he plans to invest in rebuilding the restaurant. There is only one problem: ObamaCare would make a choice to move forward with the renewal the single worst business decision of his career.
Because of the additional employees in Bruce's third restaurant, he will no longer meet ObamaCare's definition of a small business. And although Bruce offers health-insurance coverage to all of his full-time employees, ObamaCare will declare his insurance plan not good enough, and Bruce will be fined $2,000 per employee.
Moreover, since his restaurants only earn $1,200 in profit per employee, he will not only lose all profitability but be $800 in the hole for each employee he maintains.
The only rational business decision Bruce can make is to shed the third restaurant, which will unfortunately mean laid-off restaurant workers, fewer construction jobs, and community blight resulting from the newly vacant property.
The situation is no better for Mitchell, who owns 28 restaurants with about 500 employees. Mitchell's restaurants earn a profit of $2,000 per employee, or $1 million. That sounds like a lot of money, but Mitchell hasn't taken any cash for himself out of business profits for years - he leaves all of it invested in maintaining the restaurants. Regardless, ObamaCare will fine Mitchell $2,000 per employee, so he will lose every dime of profit - much of which he needs simply to pay the mortgage on his restaurant property.
But it doesn't end there. Because ObamaCare does not allow business owners to deduct these fines, the tax code will treat Mitchell as if he still had $1 million in business profit, even though he already turned over 100 percent of it (which he never had in cash) to Uncle Sam. As a result, he will also owe hundreds of thousands of dollars in income taxes on $1 million that does not exist.
And it gets worse. Because the president and his allies consider Mitchell to be one of those "millionaires" who "aren't paying their fair share," they want to raise Mitchell's tax rates again next year. In other words, turning over all his business profit and then paying hundreds of thousands of dollars in income taxes on phantom profits is not enough. For Mitchell, this arithmetic can only lead to bankruptcy and more senseless destruction of jobs.
Who loses in this scenario? Not only Bruce and Mitchell, but also the hundreds of workers and families who depend on those restaurants for their livelihoods. We have already experienced the 43rd consecutive month of unemployment above 8 percent. If we truly want our country to move forward, we must stop this war on job creators.
The first step in that process is to repeal ObamaCare, and I remain committed to doing so.
Posted: Friday, October 12, 2012
Article comment by:
More lies and fear mongering from our "Esteemed" politicians. Aren't you ashamed of your selves yet?
Posted: Wednesday, October 10, 2012
Article comment by:
Discussion Not Emotion
Well spoken, Enuf.
Obamacare is darn near the exact same thing as what Romney implemented in Massachusetts. Heck, the plan's authors have publicly admitted that they borrowed heavily from Romney's plan. I've asked every Republican I've met why Obama's plan is 'bad' while Romney's was 'good,' and I have yet to receive a satisfactory answer.
The answer is obvious, of course. It's political loyalty, nothing more. Enuf said it perfectly.
I want politicians to stop telling us what we want to hear and tell us what we NEED to hear, and I want people to stop clinging to political loyalties in the face of facts and evidence. You can still be a Republican and realize your party's political candidate is a poor choice for the job, and same for Democrats.
Ignore the partisanship and get with the facts.
Posted: Friday, October 5, 2012
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I've been a conservative for forty years but I find this sort of despicable bald face lying that Kyl so casually tosses about to be more than I can tolerate.
"ObamaCare" is RomneyCare is the GOP Plan under Clinton and was outlined to Congress by Nixon in his day. I supported it as a Republican and a pragmatic American when the Republican Party pushed it. Now because a liberal finally agrees with my side I'm supposed to buy into all these lies and call it some sort of government take-over?
Look, I recognize that most voters have short memories. I am unusual, mine is long and detailed. I can no longer ignore that Obama put a Republican plan into law than I can ignore that Romney is a successful enemy of the 2nd Amendment who banned firearms and raised taxes on gun owners 400%.
I say to hell with political parties and all their lies, their platforms, their spinologists. I look to history, without partisanship, and practicality. I'll vote for anyone that will work to solve problems, not merely to obstruct the "other side".
I have but one side now, the American Side.
All you serious "Party Members" have lost touch with being American Citizens first.