Higher taxes bad for small businesses

Several columnists have reported that President Obama wants to repeal or revise the Bush tax cuts. As he runs for re-election, Obama wants the rich to pay their “fair share“ of taxes and proposes to raise the tax rates on incomes of $250,000 or more to 41 percent and on their capital gains to 30 percent.

Four out of five incomes of $250,000 yearly are reported by small businesses who already pay a disproportionate share of the federal income taxes. Some of these businesses will raise the price of their services and thereby pass the higher tax to their customers. This may make their services unaffordable for some people living on a fixed income. If a small business can't raise its prices and sell enough to make a profit, it will have to lay off employees, limit what it pays its investors and perhaps enter bankruptcy.

About one-third of all American households own stock directly or via pensions or annuities. If the value of dividends paid by the stock owned by a retired person is reduced while inflation increases the cost of living, it may significantly lower the standard of living of many families.

On Nov. 6, everybody needs to think about what President Obama thinks is fair and what he wants to do and how that will affect their families before voting to give Obama a second term.

J. Fred Doornbos

Iowa City