|
Mercnbeth -> The Economy of Votes (2/24/2009 10:41:50 AM)
|
A damn good question was asked; "Why are people against raising taxes?". The implication is that anyone against raising taxes is "rich" and doesn't want to participate in solving the economic problems facing the US. That would be the exception. In another thread Warren Buffet was quoted as saying something to the effect that this is a battle between 'us' and 'them' and 'us are winning. Think what you like, but Warren Buffet's 'us' doesn't have me, or anyone I know as a member.
The 'us' I identify with are business people, 'successful' if the definition means we own all or a major chuck of something and operate a business. I'll answer why we're against taxes - taxes make us unproductive. Taxes make us keep assets and resources out of circulation. Taxes stop us from expanding.
How does that affect someone who doesn't own anything, works for a salary, and sees us as uncaring, unsympathetic, cold 'capitalists'. To know that you have to know some details. I provide my personal situation and company as a case study.
I just closed out 2008. Much to my chagrin, my company grossed about $335k. Shows what a poor manager I am, I try to break even. Why? Well, CA already had the highest corporate tax rate in the country and I'd rather pay tax at a lower personal rate, or give it out in bonuses to my people, but even after doing that, the cost of my product (money) was so low in the last quarter, I couldn't spend enough to keep pace.
Take a look whats in that number. I paid out $700k in salary, and another $800k in operating expenses. No complaints in doing so. I pay 100% of my employee's health coverage, provide a 401k with company participating dollar for dollar, and routinely give out bonuses every quarter when we hit 'plan'.
I base my involvement in business based upon a 'Return on Investment'. Many know, and appreciate that's pointed first to an ROI on capital investment. However for me and, many if not all, of the people I associate with in similar situations. That ROI is more about the investment in time as it is capital.
There is some number I have in my mind where I'm not willing to invest my time to pay a bigger percentage of my gross income into taxes going into a pit of government bureaucracy. Who knows, tonight President Obama can hit that number in announcing his raising taxes plan. Then what happens...?
Well, I come in one day and say to my employees - "sorry - we're closing". It will take about 6 months to a year to liquidate out the company. My employees, ranging from my operations manager making six figures, to my 2 temporary college kids making $12/hour will be out of a jobs. Good luck replacing them in CA today. As a result their mortgages and rents won't be paid, they'll buy less groceries, they'll curtail any vacation plans.
My vendors, will see a small percentage of that $800k I paid out to them 2008. They may have to lay off employees, cut back on orders to their suppliers, and a similar 'trickle down' of failure will occur.
Me - well I won't be paying any of that higher tax rate. I'll not be making any 'income' of note, and especially will be sure not to hit the 'rich' threshold of $250k. I'll live off assets. I won't invest anything, except perhaps on more 'short sell' options in the stock market.
Here's the problem; take my situation and multiple it by 10 and you get my 'short sell' investment group. Take an multiply it by a million and you have the mindset of many in business. I've had the ability, desire, and ambition to hire on another outside marketing employee for nearly 6 months. I haven't done so for one reason - I can't answer the question why I should. Why generate more money, to pay more tax to support this path of government policy? Ah, NO! So there is one less potentially six figure income not generating tax, not generating spending, not spending at conventions, not buying plane tickets, not taking business meals at restaurants, spending at gas stations, upgrading a wardrobe at clothing stores, and buying from office supply stores. Again - multiply it by many similar situations throughout the company and you have a reason why higher taxes produce less tax income.
AIG, BoA, GM, and the rest of the failures get the press and the bail-out. Asking people like me, representing a much greater segment of the US economy when considered as a whole, to fund their failure and you get a lot of pissed off 'capitalists' who are, based upon my conversations, ready to 'cash out' and sit back for the rest of their lives.
Once again, I don't think I'm a genius to figure this out. I pretty confident that it was part of an overall plan. We're dinosaurs, entrepreneurs with and without college degrees who just had a work ethic, self accountability, the ability, and some 'luck' to be 'successful'. More of us aren't being produced by this society nor this educational system. The majority are being indoctrinated to want a government which prevents them from hurting themselves. They want a government to pursue a course that results in total and daily government involvement; protecting them and providing 'cradle to grave' coverage. So it becomes 'liberal' to make laws to eliminate playground equipment to protect the children from skinning their knees on 'dangerous' monkey bars. We hear screams from the people to protect them from their decisions and inhibit foreclosure on a house they couldn't afford in the first place. We have a President who says its fine and appropriate to conduct civil disobedience. It's obvious to me, the government wants more of these people and less of me.
What they want is votes. November provided the perfect storm of disgust in the policies and programs of the prior Administration, the strength of public employee unions, and the big voting block of failures, corporate and individual, who hoped to benefit from a candidates stated platform of rewarding them for their results. Well, that candidate is now President and he came in with large enough coattails to insure fulfilling his promises. To see the joy in Nancy Pelosi's face yesterday in announcing yet another $410 Billion of proposed 'pork' spending was a sight to behold. Of course she does represent and is a member of the 'us' referred to by Buffet; so she has cause to smile.
The goal - produce more votes. Were I to close my business, who would my employees vote for, a person championing fiscal responsibly and implementing pragmatic spending cuts and audits to eliminate duplicity; or one who says to them, it wasn't your fault, here's a hand-out?
Government reliance, bludgeoning bureaucracy, increased entitlements produce votes. That's the goal here - not turning the economy around. In 20-30 years all us dinosaurs will be gone - I've got no complaints and will comfortably enjoy the balance of life. I'm looking forward to it as much many of you are to having the government 'save' you.
Good luck with that.
CIAO!
|
|
|
|
