Barbour Doesn’t Support Minimum Wage

But seriously, folks. What would we do if we lost all of those service jobs? If they pass a minimum wage bill, places like Wendy's and KFC will shut down and re-locate on the border, taking those jobs to Arkansas, etc. It may sound like a good idea to raise the minimum wage, seeing as how it's at its lowest real value since 1947, but if you take it to the next level and see what the real results would be, it becomes obvious that it would be a disaster for our state.

It's simple: Raising the minimum wage would hurt poor people, and it would destroy our economy. Thank goodness we have someone like Barbour looking out for the little guy.

what do you think about cutting the corporate tax rate, which makes it easier for them to hire more people and invest in the business?

How about a cut in payroll taxes so companies can invest more with an incentive toward hiring. Or a comprehensive plan for medical insurance that takes some of that burden off small businesses. From the POV of a small business owner, anything that state did to incentivize hiring would result in new jobs at the JFP...but the overhead for a new employee means it's a big budget item to add a single full-time position at any given moment in time.

Lowering MS taxes on corporate profits doesn't feel like the smart solution for small business (where the job growth is) especially when you consider that any sort of investment that a business wants to make or expense it wants to incur can be written off pre-tax anyway. In other words, if I see myself making an extra $100,000 this year for the business and decide to use that money to invest in salaries and growth, the income tax rate isn't going to stop me, because those are all pre-tax dollars. It's the fixed government/benefit dollars that really put overhead on salaries.

That is one reason I generally do not favor increases in marginal rates. What people forget is that most small businesses are filed on the personal tax returns of the owner and thus a higher marginal rate hits him harder than it does a corporation, which is taxed at a lower rate. Disclaimer, I'm not sure how LLC/LLP has changed the tax filing and rates of the members/owners so I could be dated in my thinking.

My thoughts are not set on this, that is why I threw out the question.

What people forget is that most small businesses are filed on the personal tax returns of the owner and thus a higher marginal rate hits him harder than it does a corporation, which is taxed at a lower rate. Disclaimer, I'm not sure how LLC/LLP has changed the tax filing and rates of the members/owners so I could be dated in my thinking.

You can also be an S-corp, which means that profits from the company would be taxed on personal returns. I believe the same is true for LLC and certainly for any sort of partnership or sole-proprietorship. So, yes, if you had to take a chunk of the company's profits on your personal tax return then that could hurt if you planned not to pay it to yourself but instead to reinvest in the company. I understand that's generally handled by dispersing a dividend that would cover the additional tax dollars even if you aren't otherwise dispersing profits.

Again, though, if you're planning ahead for a profitable year, then you can do your investing and hiring ahead of time to take advantage of it pre-tax. That could make up for some of it, and if the slightly more regressive payroll taxes were rolled back, you'd see jobs created perhaps a bit where they are needed by companies. (It occurs to me that what drives people to hire has little if anything to do with tax burdens on either side of the paycheck stub, but rather if and how many people you need working for you. The tax question is just icing. Insurance might be the elephant in the room on adding full-timers and professionals to a payroll. Oh...and worker's comp. Argh!)

It could also be argued that lowering our massive state-wide sales tax would be beneficial to businesses, because people would (a.) buy a little more and (b.) elect to buy locally more often than via e-mail or the Internet. If I knew I was going to pay 4% taxes for a $1000 computer, I might buy it locally and forgo the $50 shipping fee for buying it online, etc. Figuring out a way to stop funding our state largely on a punitive sales tax might be the single greatest boon for both labor and business.