 Tom Grasson |
In order to provide current and relevant information to the readers of our three leading publications in the medical, aerospace, and energy industries, it is necessary to attend a host of functions within the various business sectors.
I mention this because over the past several weeks, I’ve had an opportunity to attend the American Wind Energy Association (AWEA) 2010 Wind Energy Conference and Exhibition in Dallas. I’ve also participated as a panel moderator at the Advanced Aerospace Manufacturing and Technology Conference in Montreal, Quebec. In addition, I’ve been in contact with numerous medical device contract manufacturers. I’m bringing this to your attention because I’ve made an interesting observation while attending these functions, which is common among these diverse business sectors.
While there are unique problems within each of these industries, the main concern seems to center on taxes from a corporate, as well as personal, perspective. There appears to be major concerns about the tax hikes expected to hit after the Bush tax cuts expire, causing corporate profits to dwindle next year. According to economist Arthur Laffer, chairman of Laffer Associates and inventor of the Laffer Curve, tax rates next year will be everywhere. He believes that the coming hikes – coupled with the prospect of rising prices, higher interest rates, and more regulations next year – are causing businesses to shift production and income from 2011 to 2010 to the greatest extent possible.
Some of the major tax hikes to be anticipated include the personal federal income tax rate – which will balloon to 39.6% from the current 35%; the federal dividend tax rate will leap to 39.6% from the current 15%; capital gains tax rates will jump to 20% from the current 15%; and the estate tax rate will skyrocket to 55% from zero.
Yet, considering all these increases, the tax increase that is causing the most controversy is House Bill 3590, the healthcare bill. From mom and pop shops to major corporations, this bill will negatively impact profits. However, it doesn’t stop there. This bill will negatively impact the disposable income of every working person with healthcare coverage provided by their employer. This is where the real controversy is beginning to boil over.
Beginning in 2011, the W-2 form sent by your employer will increase, showing the value of whatever health insurance you receive by the company. It doesn’t matter if it’s a private concern or government provided policy. If you’re retired, your gross income will go up by the amount of insurance you receive. The end result is that you will be paying taxes on a large sum of money that you have never seen. For many, this may even put you into a higher tax bracket, making it even worse. This is how the government plans to buy health insurance for the 15% of Americans that currently go without medical coverage.
It seems to me that this 15% just inherited the mine, while the other 85% of Americans received the shaft.
I guess it’s not that surprising that there are common interests shared throughout the various business sectors. What is amazing is that the majority of Americans wanted change, never expecting to receive chump-change in return.
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