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How Barack Obama, With an Assist from George W., is Killing the Economy

Only Obama acolytes sing the praises of their Hawaiian Messiah for achieving a meagre economic growth, sputting along at barely above 1%. If a Republican was producing numbers like that you can bet your ass that the name of Herbert Hoover would be mentioned in every sentence describing the current Republican leader. Ironically, it was President Bush, not Obama, who signed off on legislation that is savaging the middle class. However, it is Barack Obama’s IRS that is putting the law into effect. So let’s take a look at how real tax policy is hurting middle class and lower middle class people. Let me take you inside a Hair Salon.

As part of the Housing Assistance Tax Act of 2008 Congress passed yet another new information reporting requirement that will cost small businesses money at a time when cash flow is critical to survival. Beginning in 2011 banks and credit card merchant services companies will be required to prepare and file Form 1099 K reporting a variety of different merchant transactions, despite objections raised by the financial services industry.

Merchants who presently pay transaction bank and merchant service charges presently charged for the privilege of accepting customer credit cards, presently ranging between 2.75% and 3.5%, will see their rates increased as a result of this new requirement as they pass the cost of complying with the new law to their customers. Small businesses already reeling from the recession will be hurt hardest by these increases and will be forced to increase their prices for goods and services to compensate for the additional costs.

What does this mean in practical terms? If you put a tip on a credit card, you are costing the business and the employee you thought would benefit from the tip a lot of money.

Before 2011, if you wanted to give your hair dresser a tip, you used a credit card. The business in turn gave the employee their portion of the tip and it was up to the hair dresser to pay the income tax on the tip. That was then.

Under the current law, a tip on a credit card is counted by the IRS as part of the gross revenue for the business. That means the business has to pay tax based on tips that show up on credit cards. Then, assuming the business passes the tip on to the employee, the “tip” is taxed again as part of the gross income of the person who got the tip. The IRS is taxing the same money twice.

In other words, if a server (let’s say is in the 25% tax bracket) in the past would have received a $10.00 tip that person would realize $7.50 after taxes. Today if that same server (25% tax bracket) received a tip through a credit card (let say the small business is also in the 25% tax bracket) the server would only realize $5.00. So the Federal Government discovered a sneaky way to increase taxes on small businesses and workers who depend on tips.

Hair dressers in successful hair salons can earn upwards of $50,000 in tips. For the business, this means an annual revenue of $100k-$300k in tips. Under the current law, the Federal Government is taxing the business on that number as well as taxing the employee. If you think that the typical hair dresser is part of the 1%, you are a moron.

So, what is an owner of a hair salon to do? Bend over and take it up the poop shoot from the IRS? Nope, they are going into the gray market. Clients are being encouraged to pay in cash or by check. The cash is flowing into a financial system that, for now, is beyond the effective reach of the Federal Government. Instead of generating more income, this Federal law is givng business owners and employees and incentive to move into the cash world. Bottomline? Less income for the Federal Government.

Who’s next? Restaurants. This law actually dampens business growth and lowers the income of those who depend on tips. This is the economic reality that many real Americans face.

But Obama is on track to do far more damage than Bush. According to the WSJ:

The government defines “economically significant” rules as those that impose annual costs of $100 million or more, and the Bush, Clinton and Bush Administrations each ended up finalizing about 45 major rules per year. The average over Mr. Obama’s first two years was 63 but then plunged to 44 for 2011 and 2012 so far. The bureaucracies didn’t slow down. They merely postponed and built up a backlog that is about to hit the Federal Register.

We’d report the costs of the major-rule pipeline if we had current data. But the White House budget office document known as the unified agenda that reveals the regulations under development hasn’t been published since fall 2011. The delay violates multiple federal laws and executive orders that require an agenda every six months…

The regulatory flood from Barack’s bureaucrats will drown small businesses, who already have been struggling to keep their heads above water in the festering, putrid pond that is the U.S. economy.

  • TexMexSoup

    well today I had a stupid conversation with one of my colleagues, well probably former now. Anyway she is black and asked me if I voted for Obama, my reply was “hell no” she got pretty angry and told me for being a Hispanic she couldn’t believe that I voted for Romney and she thought I was better than that and more progressive, LOL……
    I asked her why as a black person they don’t acknowledge Obama’s whitey momma, and she said let me tell you why…. I pretty much cut her off and said, there is no fucking let me tell you why, his mother is WHITE stop making damn excuses cause it eats you up inside that his momma is Caucasian!! The rest of our conversation didn’t go so well…… LOL, the sheer assholey democrat point of view is just stupid.

  • HELENK2

    http://hotair.com/archives/2012/11/26/supreme-court-revives-challenge-to-obamacare-on-religious-liberty-grounds/

    supreme court revives challenge to obamacare on religious liberty grounds

  • Mike Monroe

    There is no evidence that these IRS rules regarding the service industry is having a negative impact on either the service industry or the economy overall. Where is the proof of that? Please provide some evidence if you have it.

    More broadly there is no evidence that government regulations in general hurts businesses or the overall economy. Businesses always face regulation, which they always complain about, but they ultimately just adapt. If you look at periods of U.S. history when there was more or less regulation you see absolutely no correlation with the success of the economy and businesses. If you compare different countries with more or less regulation you also see no correlation with the success or failure of the economy and/or businesses. How about you provide or cite some empirical proof rather than these whinny generic posts that really say nothing?

    In fact a lack of sufficient regulation or enforcement during the financial crisis and run-up of the housing/mortgage derivatives bubble clearly hurt the economy and the country.

    Funny how you conservatives spend so much time worrying about the deficit and debt and yet you are now complaining about more efficient means to collect taxes.

    • Hokma

      “there is no evidence that government regulations in general hurts businesses or the overall economy.”

      Pravda was right.

    • http://noquarterusa.net Larry Johnson

      You are a total, fucking moron. If you knew one or two of the people who own these businesses you would know. There are several effects. First, for those businesses that rely on credit card transactions it is raising their costs and reducing their gross. Whatever tax revenue increase in the first year is offset by declining revenue in 2012 and in 2013.

      Second, employees who depend on tips are seeing their incomes fall. The money is getting taxed twice.

      Third, the more agile businesses are moving to a cash basis. That means substantially less tax revenue paid to the IRS.

      Do you get it asshole? Or, are you just terminally stupid?

      • Mike Monroe

        “for those businesses that rely on credit card transactions it is raising their costs and reducing their gross. ”

        Bullshit. How does it reduce their gross? Makes no sense. Sure it may add a few more dollars on credit card transactions and therefore modestly raise some fees, but not enough to make much of a difference. Do the proper math for once.

        “Second, employees who depend on tips are seeing their incomes fall. The money is getting taxed twice.”

        Bullshit. If employees are properly reporting their tips, there is no loss in employee income. It is impossible to not report a significant portion of your tips for very long as the tax man will eventually catch you. They know how much a hairdress makes in tips. They use scales if they audit you.

        Many many hair salons today only take cash. However, if they don’t want to take credit cards then they risk losing business. Their choice.

        To say that moving tips to credit cards is going to hurt the economy in a significant way is a complete exaggeration.

        As a fiscal conserative you should be for catching those who do not pay their taxes on their tips.

        By the way how is tips being put on credit cards considered double taxation? More bullshit.

  • jrterrier

    Democrats Vote The Mentally Disabled

    “This is so appalling in its contempt for the voting process, which is the very foundation of our democracy, and in its cynical exploitation of my brother-in-law and the other patients in the home, many of whose mental capacities are even more limited than his that I am at a loss for words to express it. I hope poll-watching groups like “True the Vote” will comb the rolls of residents at other homes for the mentally disabled, and attempt to stop this particular abuse. I hope that people who care about our country will make electoral fraud a focus of their political efforts, and work to protect the integrity of the voting process.”

    http://www.breitbart.com/Big-Government/2012/11/25/Democrats-vote-the-mentally-disabled?utm_source=twitterfeed&utm_medium=twitter

    • KenoshaMarge

      Don’t you know, that according to the Dems, there is no problem in this country with voting fraud. What that means when you decode it is that voter fraud from the left doesn’t mean anything and people who believe that you should have to produce a picture I.D. are only trying to suppress the vote. (A vast majority of people think a picture I.D. to vote is a good idea but obamacrats, obamamedia and the Cockroach in the White House don’t so liberal judges are acting to suppress I.Ds.)

    • DianaLC

      It’s the same as for social studies teachers in our public schools who most always support the Democratic Party. They indoctrinate in the classroom, and the parents don’t know about it or, if they do, they do nothing to stand up against it. We occasionally read a story about it and hear about a parent stepping forward. But, no outrage exists in the general public.
      I grew up in a day when teachers knew they should present an unbiased perspective. It’s bad enough when a teacher tries to use his/her status to make a student think a certain way. I can’t imagine what goes on in the minds of the persons doing this to a mentally challenged man.

      • KenoshaMarge

        Indoctrination instead of education. Liberalism at it’s best!

  • binky354

    Applies to a prior post re: Egypt:

    “I cannot help but see the image of Valerie Jarrett sitting inside of her second story West Wing office, just down the hall from Barack Obama’s own often used private study, nodding her head in agreement and mouthing the words, “All according to plan” .”

    http://theulstermanreport.com/2012/11/25/obama-and-jarrett-now-reap-what-they-have-sown-in-egypt/

  • TeakWoodKite
  • HELENK2
  • MG6
    • http://twitter.com/jbjdjbjd jbjd

      No, Carville isn’t “telling it like it is”; at least, verifying he is, is impossible from the link you posted, which ends up (after several re-directions) to this link from September 2011, http://republicmainstreet.wordpress.com/2
      011/09/29/democrat-james-carville-says-80-of-democrats-are-politically-clueless/, which leads nowhere.

      • DianaLC

        Has Carville denied it? Just asking.

    • arturo_ui

      That quote is obviously entirely fabricated. It’s embarassing that you would actually believe it is real.

      • HARP2

        Thanks arturo_ui for providing the comedy portion of this thread.

        • HELENK2

          he even got a review in pravda

  • MG6

    Now this is really tall telling when Russia is giving lecture to the American people….

    http://english.pravda.ru/opinion/columnists/19-11-2012/122849-obama_soviet_mistake-0/

  • HELENK2

    http://www.breitbart.com/Big-Government/2012/11/25/Rahm-Emanuel-to-America-Do-It-the-Chicago-Way

    per rahm emanuel to America do it the Chicago way.

    murder rate high
    lousy schools
    keep electing crooks
    high taxes with little to show for them
    live in fear

    • Hokma

      You have to admit that the guy has kahones.

      • buzzlatte3

        encased in pink tights, too!

        • Patriot

          Rahm and Barry, lifetime members of Man’s Country Club?

      • MG6

        Actually it is spelled “cojones.”

        • Hokma

          It’s a public forum. I do it phoenetically for a reason

  • DianaLC

    Wow! Who knew my partner and I were doing a good thing every time we gave a tip in cash. We have a deal, if I’m paying for the meal, he pays the tip in cash. If he pays for the meal, I pay the tip in cash. I try not to use credit cards, so I pay my hairdresser with a check and add the tip onto it.

    Us old fogeys who haven’t given up our use of check books and who use credit cards sparingly (and who don’t have debit cards) weren’t so stupid afterall. And the cost of checks themselves is not bad, especially in one bank we use where we get them free since we carry a high balance in the savings account.

    • Van_Dessel

      make sure you nail Hokma on the “kahones” comment

      • Hokma

        It’s a public forum. I do it phoenetically for a reason

        • KenoshaMarge

          And who knew the spelling police would be here?

      • DianaLC

        I might have done that if Hokma had used the Spanish word “cajones,” as so many do, a word which doesn’t mean what “cojones” means. But, it was obvious that Hokma was giving a phoenetic spelling. Are you angry that someone corrected you for using the wrong Spanish word once.
        I’m sending you off to El Cajon, California. :-)

        • DianaLC

          And by the way, why did you comment about Hokma’s comment to me? I commented on an entirely different subject. Methinks you’re here to stir up trouble.

    • FLDemFem

      I always tip in cash because that way the server/hairdresser/whoever gets to take the tip home that night instead of waiting for the card or check to be processed and/or cashed. People who count on tips should get them right away, in my opinion.

  • HELENK2
  • foxyladi14
    • Hokma

      I have no doubt that the Obama campaign commited voter fraud and voter suppression. What I don’t understand is why the RNC and the Romney campaign who claimed to be lawyered up and vigilent just let this happen and let it go without a whimper of protest.

      • DianaLC

        I’ve wondered about that also. But, at the time of the election, the media had just not shown that it was going to get out of the love’s nest they are all living in with Obama. A fight over the fraud and voter suppression would have been shouted down and done not gone anywhere with the people who were in charge of the clerks’ offices where the fraud was the worst. The legal wrangling would go on and on and the economy needed addressing badly, and Benghazi is going to take up time. Obama has overwhelmed the system.
        We all just have to lay low and get by until the masses and the media come to their senses. If they don’t, my generation will be gone and it will be my kids’ and my grandson’s generations that have to fix things.l

      • Patriot

        Almost as if they wanted it to happen?

        • buzzlatte3

          Of course the election was a fraud. It stinks of corruption. Didn’t a company owned by Soros count the votes?!?

  • HELENK2

    http://www.cnbc.com/id/49898014

    morgan – stanley predicts 2013 recession

  • Hokma

    I had been saying that the trajectory toward demoratic socialism in this country may have started with FDR but no President since has done anything to reverse that. Certainly not Bush Jr.

    The best thing that could happen to this country is for the economy to completely collapse and force the federal government to cede power back to the states and the states to the people.

    You are right to point out that Obama did not create this but he is finishing the job.

    • no_longer_a_democrat

      “The best thing that could happen to this country is for the economy to
      completely collapse and force the federal government to cede power back
      to the states and the states to the people.”

      as a former lefty, I completely agree with this statement, and predict this is how it will indeed go. Federal govt is broke, they make nothing, they just transfer money one from the producers to the nonproducers. This kind of thing cannot go on forever, especially as the productive in our society are going John Gault more and more now!

      • arturo_ui

        “Federal govt is broke, they make nothing, they just transfer money one from the producers to the nonproducers.”
        Red states take in more money from the federal government than blue states, and pay back less in taxes.

        • no_longer_a_democrat

          riiiight. Of course they do.

          and guess what? when the crash does come, red states will be more than able to rely on themselves, lets see how long CA and IL last will no bailouts from anyone to bail them out.

          • arturo_ui
            • Hokma

              Wow that is real hardcore substantive thinking.

              Within those “blue” states who exactly is paying those taxes? Who are the top 1% or 10% in those states? You have evidence that they are Democrats?

              • TeakWoodKite

                Goof ball Obot thinks he correct…Thanks for decoding my snark. Best to you and yours Hokma.

            • no_longer_a_democrat

              what a clueless idiot you are. Once the dollar is completely devalued, and it WILL happen, I know I would rather be in a red state than a blue state, who are as helpless as a 1 day old calf in taking care of themselves.

              the Federal govt is BROKE! and only getting more broke.

              • Patriot

                usdebtclock.org
                shadowstats.com

        • TeakWoodKite

          Green states make more than purple ones too.
          With all these different colors what does the wiki say?

          http://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state

          • arturo_ui

            It backs me up.

        • elijahzabmom

          Red states have military bases and veterans.

          • scottymac54

            Well, maybe for now….

    • arturo_ui

      “The best thing that could happen to this country is for the economy to completely collapse and force the federal government to cede power back to the states and the states to the people.”

      Yeah, that would be just frickin’ great. Can we fit that on a bumper sticker?

      • Hokma

        Do you have a coherent thought in your head or does that chirping fill your needs? Just wondering since I never read any coherent ideas from you ever.

        • arturo_ui

          When I read you suggesting that “the best thing that could happen to this country is for the economy to completely collapse”, what more needs to be said?

          • Hokma

            It already is teetering. Kicking the can down the road only prolongs the decline. If the economy collapses ti will bring to a rapid end the power of this central government and immediately throw power back to states and communities. The central government will no longer be able to borrow money and therefore spend money. As Ron Paul said, we are already over the cliff. It will also be the only way we can get rid of the shackles of socialism that this country got itself into.

            • arturo_ui

              “If the economy collapses ti will bring to a rapid end the power of this central government and immediately throw power back to states and communities.”
              Right, because we all know that “states and communities” don’t rely on the federal government for anything.

              • Hokma

                You just answered the friggin problem moron.

                Wow what a genius. Give the man a prize.

                Go do some google searching and try and find one founding father that saw the states relying on the central government for anything but national defense. Read Washington’s farewell address or the Federalist Papers. Try as best you can to understand what a federalist republic is.

                Then do some more google searching and find out what a socialist democracy or a socialist government of any kind is.

                What you will find out is that we are and have been the latter and not the former.

          • HARP2

            Keep banging your head on the keyboard…..maybe one day, an intelligent thought will drop out.

            • KenoshaMarge

              Nothing can “drop” out that wasn’t in there to begin with.

              An intelligent thought isn’t possessed by a cretin that thinks it is doing something worthwhile by coming to a blog that disagrees with it completely and thumbing it’s stupid nose. An intelligent being would consider that childish, foolish and a waste of valuable time.

              This cretin has already wasted far more time and space on this blog than it is worth. No obamacrat is worth our time or comments.

              Why respond and give it the attention it so obviously needs?
              It is one giant Talking Point bore.

    • DianaLC

      Hokma,

      I wonder if it’s possible that somehow we could trace this arturo_ui so that whichever state he’s in when the collapse of the federal government does occur will be notified that he/she/it used up all his charity quotients living off the federal government dole and so should not receive help from the charitable organizations in the state. He can become the Wandering Jew, so to speak, of our times.
      (And, arturo_ui, I’m using the reference to that medieval figure as an analogy of the situation I would like you to find yourself in. I am not an anti-Semite, though I will confess to being very prejudiced agains jihadists.)

  • no_longer_a_democrat

    I saw this comment at a zerohedge link… pretty much sums it up.

    As US debt keeps climbing with no debt ceiling it will loose both military and economic power.

    As Russia and China know the way to take the US down is not
    militarily but economically. Let the US bankrupt itself and owe more
    money than it can ever pay back.”

    Nice going Bush and even better going Barry Soetero! and really why would they care? they’re rich, they couldn’t give a chit, especially Soetero, a one man wreaking ball!

  • arturo_ui

    In case anyone forgot, I just wanted to remind you all: President Barack Obama was overwhelmingly re-elected a few weeks ago. Two elections, two colossal failures at No Quarter. 0-2. Way to go, kids!

    • Hokma

      Go F yourself you immature and ignorant Daily Koz Kid.

      • arturo_ui

        “Go F yourself you immature and ignorant Daily Koz Kid.”

        Right: a statement like yours means I’M the one with the maturity issues.

        • Hokma

          Your comments have been inane from the outset which makes you a poster child for everything that is wrong with this country.

    • Sandy

      Doublespeak translation

      arturo_ui

      In case anyone forgot arturo_ui,
      I just wanted to remind you all: arturo_ui
      a Resident Barack Obama Obot-robot was overwhelmingly
      identified as re-elected a Obot-dope-robot few weeks ago. Two elections, fraudulently manipulated two colossal continuing failures continue, have been identified at No Quarter. (00-2 arturo_ui’s IQ). Way to go, kids!

      • arturo_ui

        What?

        • TeakWoodKite

          ROLF!

    • HELENK2
      • HELENK2

        Recently, Obama has been re-elected for a 2nd term by an illiterate
        society and he is ready to continue his lies of less taxes while he
        raises them.

        • MG6

          That! Was a painful article to read. But! I place the blame on the AA communities for their racist vote. A racist vote that is killing this country.

          • buzzlatte3

            Plus, the stupid women who still need the idea of a sugar daddy government buying their birth control for them.

            • KenoshaMarge

              The women who continue to think that what’s between their legs is more important than what’s between their ears. There is NO cure for such stupidity.

      • MG6

        Gawd! I reposted that article from Pravda. Sorry.

        • HELENK2

          gmta

          • MG6

            Why thank you….

            Ps….I had to look it up to figure out what it meant…..hehehe.

    • shelldoll2

      Hate to tell ya the last President overwhelmingly elected was not Obama.

      • KenoshaMarge

        Give the troll a break Shelldoll, reality “overwhelms” what passes for its thought processes. If that were not so why would it be here playing “nyah, nyah” like a child? A nasty child at that. Not worth the time we give it.

        Like a neglected child the attention it gets here makes up for the attention and respect it cannot get among its peers. Probably a bad “potty training” incident or a little penis. Either way, a dead bore.

  • HELENK2

    the other day on TV a female democrat was talking about it would be good for the economy to increase gas taxes.
    not the brightest tool in the shed

    • KenoshaMarge

      A Female Democrat? Nuff said.

  • HELENK2

    Gas stations in my area already have two prices for gas.
    one for cash payment and a higher one for credit card payment.
    this probably will be the future.

    • foxyladi14

      Yep here too Helen.

    • no_longer_a_democrat

      funny you said that. I saw that today for the first time. If you pay by credit card the price was higher, cash, a few cents lower, I’ve never seen that before.

      • Woody

        That was the practice back in the day, at least in the Peoples’ Republic of California.. Also, if you let an employee of the station pump the gas for you … assuming you even remember that arcane service … you paid a few cents more per gallon than if you pumped it yourself. Everything old is new again.

        • buzzlatte3

          The “70′s are back. Cash is king!

          On Drudge: Pravda article states that Obama was re-elected by a bunch of illiterates. For once, I agree.

          • shelldoll2

            The Moscow Times also agrees.
            We are through the looking glass.

            • DianaLC

              I think it’s amazing when we get the truth from Pravda and the Moscow Times. But then, our own media has become what the name “Pravda” used to mean to us kids as we were ducking and covering under our school desks.

    • Dave L.

      Arco Am PM gas stations here in Arizona have been doing that for over 10 years. If you use your debit card , there is another 50 cent charge added on to your bill.