What is wealthy?

What does it mean to be wealthy? Obama seems to think that a guy who makes over $250,000 is wealthy. Obviously, if I made $250,000/year I'd be wealthier than I am now, but would I be "wealthy"? I say not necessarily. Here's why:

Who are the people who earn over $250,000/year? I don't know the exact number, but quite a large number of these are small business owners. Most of these guys either own their business through a sole proprietorship or an LLC. Both of these are pass-through entities. In other words, they're legal fiction. Every penny of the $250,000 in net profit that Joe's Muffin Shack makes is considered a penny that Joe made. The fact that Washington ignores and wants us to overlook is that if Joe is smart, he'll not pay himself the full quarter mil his business "made".

I sell building materials to a network of dealers. These guys are almost all self-made men and small business owners. They also are scared of having their taxes increased. Why? Because if my customer wants to stay in business, he'll reinvest every red cent he can back into his business. These guys don't have a guaranteed paycheck. So when they have a good year they'll upgrade their equipment, invest in advertising, purchase some materials, or simply hang on to that money for when a bad year comes along.

A business is a constantly moving and changing thing, just because a business may have $250,000 or more in profits (dirty word) on the last day of a given fiscal year does not mean that it won't be in the red in a couple of months. In a business, every penny counts.

So when our politicians say only the richest in America will see a tax increase when it allows some Bush tax cuts to expire, what I hear is that many business owners will have less money to reinvest in their businesses and will, therefore, tighten their budgets. A business with a tighter budget will either cut wages, lay people off, reduce hours, raise prices, hesitate to hire new employees, or worst of all, simply close shop.

Granted, a small tax increase won't result in mass closures, but when the government says it needs the money, I can't help but wonder if it really needs Joe's Muffin Shack's money more than Joe does.

Perhaps our government should focus more on increasing its own budgetary IQ and on trying to work within its existing revenues instead of trying to find ways to increase revenue to itself in order to compensate for its budgetary incompetence. After all, it's [growing] the economy, stupid, not growing revenues to the government that will pull us out of this recession.