I own several low income apartment buildings. Obama’s tax proposal will increase my federal tax by a million dollars a year. Fortunately the Pres is also going to increase the federal minimum wage which is the wage many of my tenants receive.
Obama has put forward an increase in the minimum wage from $7.25 to $9 per hour ostensibly to put more money in the pockets of the working poor. John, who works full-time at a nationally recognized coffee retailer will see his after tax monthly income jump $248 from $1,110 to $1,358.
Like many others, John currently rents a 400 sq. ft studio apartment for $700 month from me. Knowing that John will have an extra $248 to spend each month I will simply raise John’s rent from $700 to $950. Multiplying that by the hundreds of other tenants in my buildings I will actually end up with more take home pay each year even with the tax increase.
In order to compensate for the 24% loss in profit I will simply pass the labor cost onto the customers by increasing the cost of my products by 24%. I could also use this loss as a cover to actually increase my profit margin by increasing the costs of my products by 30%.
In the end the President has given John more money to spend on housing and food yet less housing and food for the money that John spends.
This is what you should expect from a person who wants Americans to smoke cigarettes to help pay his and every other government employees’ salaries.
Obama seeks to fund the government with $78 billion over ten years from taxes on cigarettes. That will require that a lot of Americans smoke a lot of cigarettes resulting in a lot of cancers and disease increasing medical costs by 2 trillion dollars to ObamaCare which is funded by all Americans in the form of other taxes.