- Days left
The controversy still rages over Joe the Plumber, who has been raked over the coals by the media and bloggers for asking presidential candidate Barack Obama a question about his tax plan. He's been accused of being a plant and an outright liar, and his divorce and delinquent taxes have been discussed ad nauseum.

Whether you're for or against Joe the Plumber, it's clear that he still represents the American dream. Maybe he's not considering buying a business. Maybe he doesn't have a plumber's license and instead works under someone who does. Maybe he's never going to make a lot of money.

But Joe represents the possibilities that Americans believe in. Someday he could be a business owner and he just might make enough to be considered one of those "high income" people. And indeed, many Americans believe they have a chance to someday be financially successful. But they also know that a strong U.S. economy depends on entrepreneurs.
Companies considered to be "high-growth" are responsible for creating almost all the job growth in the U.S., even though there are only about 30,000 of these companies. When inventors get to work and bring desirable products and services to the marketplace, we all benefit, and the economy expands. Our economy relies heavily on innovation, but that could be negatively impacted by a decreasing desire by consumers to start their own businesses in recent months.

It's popular to suggest that higher taxes on the "rich" are better for us as a whole, and that those in need are helped by such a move. Higher taxes likely would have just the opposite indirect effect, however. When governments seize more from taxpayers, the incentive to innovate and take risk is reduced. That results in less entrepreneurship, which results in fewer jobs, which impacts those in need very heavily.

A system that taxes more and distributes those funds to the less fortunate shouldn't ignore the side effects. Lower taxes encourage development of new companies and industries, and history has shown that the increased output from such development can greatly benefit all classes of taxpayers. So before we're too quick to believe that more taxes on the wealthiest of Americans are their duty (and even a "penalty" that they deserve for being wealthy), let's pay careful attention to what a move like this might mean for the rest of society, which depends on the jobs created by innovative entrepreneurs.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud

Increase your money and finance knowledge from home

Goal Setting

Want to succeed? Then you need goals!

View Course »

Timing Your Spending

How to pay less by changing when you purchase.

View Course »

TurboTax Articles

Know The Key Dates For Health Care Reform

"Open enrollment periods for the health insurance marketplace under the Affordable Care Act are limited" says Mac Schneider, a retired certified public accountant from Albion, Michigan. ?Avoiding tax penalties requires awareness of important dates that may vary year-to-year.? As well as key dates, there are time cycles and coverage gap allowances important to health insurance coverage under provisions of health care reform.

Deducting Mortgage Interest FAQs

If you're a homeowner, you probably qualify for a deduction on your home mortgage interest. The tax deduction also applies if you pay interest on a condominium, cooperative, mobile home, boat or recreational vehicle used as a residence.

What Extra Tax Deductions Should I Make Sure To Take?

The federal government offers tax deductions and credits to reduce taxable income under certain circumstances. There are several that are often overlooked, including deductions for job hunting, caregiver expenses for dependents and children while you work, a credit to reduce taxes for moderate- to low-income earners and the premium tax credit associated with the Affordable Care Act. TurboTax can help determine if you qualify for these credits and deductions.

Add a Comment

*0 / 3000 Character Maximum