Obama has already announced plans to increase the maximum tax rate to 40% for those who make over $250k. He has also proposed elimination of the ceiling on social security taxes and now the health care bill adds a tax on employers who do not provide health insurance. If you combine this basket of tax hikes with the hikes in taxes from states like California and New York  to avoid their own meltdown and you have a substantial change in the taxes levied on small business owners.  Add  substantially higher minimum wages, enacted long ago but now taking effect in the most severe recession in decades, and higher proposed capital gains taxes. And then consider the vast uncertainty of the Rube Goldberg system called Cap and Trade and the impact of some version of the strongly pro union card check bill will have on business thinking.

You have to be an economic moron not to understand that this will sharply curtail economic growth, investment and hiring. Any of these changes would have an impact, but the collection of such disincentives has a staggering impact on the decisions of small businesses.

Those who are able will shut down and just retire early even if they have to reduce their lifestyle to do so. I hear this from small business people consistently.  With the last kids off to college they speak of selling their business and moving to their beach house.

These same business people see their risk reward opportunity to be so poor now that they would rather sit on their money in low yield money funds that risk it in expansion only to see 70% of it taxed away IF they are successful. That is why there is over 3.5 TRILLION dollars sitting in money market funds.

Many will adjust to the new looter mentality and do the best that they can. I am sure that lawyers and accounting advisors will seek and finds loopholes and other non productive means to protect private wealth. Those who are sophisticated enough will seek foreign opportunities.

Unless this direction is changed unemployment will soar and economic growth will stagnate for a long time.

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