Voting for Small Business
A few days ago I declined the honor of commenting in the press on which of the two presidential candidates would be better for small business. I know why I'm asked. I own a business, we have 45 employees, and decent (multi-million-dollar) sales. We have no outside investors, and we've never missed payroll in 25 years (except when I didn't pay myself).
The following day I saw an analysis of how and why small business owners should vote for John McCain. It was done by a man I respect, know and like, a journalist with pull in the small business world. He has a good reputation.
And that disturbs me for several reasons.
- First and foremost, it's crazy to vote for president based on the supposed details of what's best for my business. What's best for my business on the long run is whatever is best for my country. Before I go into my office every morning, I walk or drive through the town I live in. I pass schools, homes, and businesses. We win together, or we lose. When I get to the office, I deal with sales involving thousands of Web users, all of whom are affected by what my government does for the population in general, not what it does for a small minority of business owners. Voting simply on small business issues related directly to my business is like sticking my head in the sand.
- Secondly, I'm not at all sure he's even right about the Republican offerings.
- I've been signing checks for employee health care for 15 years now. We've never linked our benefits to exactly what the government wants for us; we've always done a lot better than minimum requirements. As far as I can tell, ironically, the Democratic platform leaves us alone to do what we've always done, and the Republican platform messes with us a lot, and not in a way that's good for the company or our employees. And I'm no expert, but it doesn't seem to me like it's good for the general population either.
- The arguing about tax rates seems to be full of misinformation. The campaigning seems to mislead people on what it is to have $250K in profits; that's a lot of profits. Don't confuse that with having sales of $250K. I think I read that the Democrats say that only 2% of businesses make more than that in profits. I'm surprised that it's that high.
- Furthermore, who are we kidding? Tax rates these days are about how we calculate taxable income, not about the final rates. It's all smoke and mirrors.
- And if we fix the deficit spending a bit by raising taxes, that's much better for all business that the hike which affects a small minority, and not the main public, even if we're part of that small minority. Ultimately, in my business at least, we want our buyers to have money.
Ultimately, when people start talking for small business, they're almost always off base. Small business includes more than 21 million business owners in this country, not counting the millions more who own shares in large businesses. We don't vote as a block. We are as diverse as the country itself. And, I guess this is a cheesy statement, but I think each of us should vote for what we think is best for the country, not just what's supposedly best for our specific business.
But that (what I've stricken out above) is too damn non-committal. Let's just get to the real meat of it, which is that the Republicans have co-opted a lot of small business analysis to foster this misinformation, as if that bait-and-switch McCain health care plan and the pie-in-the-sky tax cuts were really good for anybody in small business. What it's really good for is confusing issues, and its authors are same Republican leadership that has laid siege on the SBA and made business harder for everybody. The only thing they've really done for small business is add to our numbers by turning so many formally medium-sized and larger businesses of the past into small businesses today.
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If I were making a lot of money, I would not paying a bit more on my marginal rate. It's not like anyone is saying, "We're going to cap your earnings. Earn this much and after that, we take everything
Do you really buy the idea that only those making less than $250K will get an INCOME tax break?
1. 40% don't pay income taxes, which will increase to 45-50%. Like Obama, we're only talking about INCOME TAXES.
2. Those who will be hit the hardest will flee to tax havens like tax free bonds or other countries. So you can bet that the $250K will be lowered considerably. Now we hear it's $200K and Biden earlier said it is $150K.
3. Obama's plan will increase the amount of FICA taxes on those making over $95K. For nearly all it will offset the income tax cut and for most it will be a net loss.
4. Obama's plan will also raise taxes on gasoline, natural gas, electricity and home heating oil which will offset nearly all those remaining income tax payers and be an increase for most.
5. Obama's tax plan to raise taxes on business's will be passed on to the consumers and will be a net increase on the standard of living for all working Americans.
6. The only one's who MIGHT see a benefit will be those American's on welfare.
7. Obama's bill, the $845 Billion a year Global Poverty Act passed in the Senate in 2008 will insure that the rest of the world's poor will benefit.
You are a fool. Most of the people on welfare WORK. They DO NOT make enough money to handle the NECASSATIES. You know things like electric, food, housing, transportation, and coats for the winter. Y'all need to make up your minds. You want people to work and they are working, but because they don't make enough to live..... then you say they have no ambition or drive and to get a better job. Who do you think is going to do those low paying jobs? Who's going to check your groceries at the stores? Who's going to clean your house? Who is going to work in the peon departments of companies? You? I truly doubt you will lower yourself to the level. You allowed the deregulation of certain industries which put them even further behind and now you complain because they need help. You conservatives are some greedy, unfeeling, egotistical, alternative plane of existence bum lickers.
Bullshit! What do you call public assistance like food stamps and Federal housing? The electric company here has a fee for assistance to low income customers. When I couldn’t afford it, I wasn’t too proud to get my coats form Good will and DAV. I’m amazed at how many times I’ve stood in line at Wal-Mart behind a person wearing designer jeans and shirts, a $120 pair of shoes and enough gold, silver and diamonds to blind me, and then pay for their frozen and prepared food with food stamps.
The Democratic socialism has done nothing but kept those recipients chronic dependants on the government. It is equivalent to economic slavery. The government rewards those for having more dependants especially for those born out to wedlock. It’s just enough to get by and insure that those in the receiving end vote Democratic. Open your eyes and look at who controls the urban areas and see that the problem is only getting worse. It’s the ultra rich liberal elite using the “Uncle Tom” minority leaders to solidify their power and kill the American dream for all who work hard to achieve it.
4. yes and no. The money made by taxing carbon will be given back to the taxpayers, so it is a zero sum game. Of course, if you are into coal, it is bad, and if you are into solar, it is good. it just means that when people who could care less steal my air, water, and share of the planet, they finally have to pay me for my property, instead of just taking it.
5. maybe, but look at who is taxed and who isn't. Only businesses which don't provide health care with over 50 employees will pay the tax. Right now they are using that advantage to provide goods cheaper than competitors who provide health care. once this tax exists, there will no longer be an incentive to screw your employees.
6. The ones who might see a benefit are the middle class that have gotten poorer every year of Republican leadership this century.
7. if the rest of the world's poor do better, the rest of the world will be forced, by economic pressures, to give better pay to their workers, which will make our workers more competitive, and maybe turn around the job drain to the third world. But that might hurt your stock values, so who cares if it makes the US stronger.
5. Much to your socialist thinking, I don't screw my employees. The only way I can write off my insurance is to offer it to all my employees. I must offer this benefit among profit sharing and paid vacations to attract quality employees. Small business is very dependant on long time quality employees to offset unemployment expenses which can vary as much as 8% on each employee.
6. Don't forget the fact that Obama will let the current tax plan expire in 2010 which will INCREASE the tax rate on all those earning over $42,000 per year. The $1000 tax rebate Obama offers will be offset for most of those tax payers. Unlike the Socialist countries, the middle class makes up the largest class with the upper and lower class being similar is size. Oabam's plan with change the statistic daintily eliminating the upper class and turning more workers into the lower class. If you can get something for free, why work?
7. The primary reason the for the prosperity of Communist China is trade with the huge consumer markets of the capitalist countries of the U.S., Japan and the few remaining free markets. Once those markets dry up from Socialist redistribution, the entire world will be worse off. The former Soviet Union was denied from trading with the Capital markets and was forced to abandon its form of Socialism.
I am no business owner but it is common sense that if the middle class don't have money to spend no business is going to make money (profits).
I wish someone would respond to my earlier post about the very real problems that the Democratic party poses to a small business. The threat of a union in a small business is life threatening to many businesses. Lawsuits pushed by blood sucking attorneys are very real and apparent to anyone purchasing liability insurance. Minimum wage laws raise your costs for entry level employees and force you to pay more for every one else that you employ. I cannot even imagine the chaos ensuing from comparable worth laws, living wage laws and the proposed card check union organizing. Add in higher capital gains taxes and estate taxes and there is not much to recommend from the Democratic party. A small business person voting for the Democratic party is in denial. Belief in some vague idea that their proposals will increase the number of customers and their purchasing power is idiotic. The Democrats are going to raise taxes on everyone except their welfare base throughout the country. The best thing that any young person could do would be to get a government job with guaranteed benefits, no risk and performance standards that apparent at any post office or motor vehicle office.
How's that Republican scam party of ruin working out for your business then, eh?
I am a small busness owner for over 25 years. I always have done better when a democrat is in office. The issue about taxes is not how much tax we pay , but rather what we get ,or how our taxes are used.
As a business owner, if I was given the choice between more customers or more tax cuts, it's obvious which to chose - more customers, of course! We cannot survive without economic prosperity in the middle class.
Great post Tim. I suspect more entrepreneurs than we'd think share those views. All we really have to do is look back--small business owners thrived under the Clinton Administration--and are struggling to just hang on today.
With six tax brackets in existance today I wonder how many individuals or businesses would turn down making more money versus paying more taxes. If the prospect of paying higher taxes is so daunting then casinos and lotteries would not exist!
I read somewhere that a small business will have to be worth a few millions to declare 250k in profits that will be taxable which eliminates many, many small businesses, esp. in reference to joe the plumber business dreams. Maybe I misread the article, I don't know. This whole issue is confusing.
One thing I do know, the repubs have been campaigning on and cutting taxes for the past 30 yrs. Where has it gotten us? More jobs lost. No money for needed infrastructure. Dwindling wage earners to pay taxes, less middle class. More people living in poverty. The list goes on and on.
I am a small business owner with 30 employees and agree completely with this article. I was approached by one of my very Republican employees about how I could vote for Obama because of the tax issues...a
I am no business person, really, except as a very small scale art producing craftsperson.
But I appreciate your point that "small business," and perhaps over-idealistically so, even mid- and large business do not have to vote as a bloc. As you note, it may be outrageously old-fashioned, declasse and outre, but your wanting to vote for what is best for the country is, for me, the basis of a civil society, something which is everyday belied by the mentality evinced by such as enochsmoky above and many others. These last 8 years of unbridled greed and selfishness have been particularly ugly.
I'm sorry, but I will have to call it what it is.
SMALL BUSINESS 101: owner income: salary vs dividends
Say Joe's S Corp. grosses $500,000. Joe got a loan to purchase the business, and the interest on the loan is a deductible business expense. Joe pays his 5 working plumbers $50,000 each, totaling $250,000. Joe pays himself (as manager/sa
A business owner is a CAPITALIST. After he pays himself a plausible salary, the remainder can be distributed as a profit on his investment.
Imagine how much PROFIT Joe's would actually have to produce for him to actually declare a salary of more than $250,000. I would call that RICH.
As a small business owner for 30 years, thanks a lot for this post. I get infuriated every time McCain repeats that Obama's plan raises taxes for more than 50% of small businesses. I know it's an old joke about you've got a set of books for the bank, one for the IRS, and another for the person you're selling the business to, but it is accurate. Profit in most businesses is what you report when you want to impress the bank. In my state of Idaho, the late billionaire J.R. Simplot and a northern Idaho publisher and resort developer were the only two "small" businesses who reported more than a quarter-million net income. Don't want to pay higher business taxes? Simple. Pay your people more, invest in more equipment, you'll do better in the long run. That is, after all, what we give business deductions for - to encourage investments in jobs and economic activity.
And is McCain actually suggesting that I'll refuse to make another dollar because I'll pay 39 cents in taxes instead of 35? I still get 61 more.
My grandfather had a small but successful construction company. He operated under Hoover, Roosevelt, Truman, Eisenhower and Kennedy. I never heard him whine about taxes, even though tax rates through those years were higher than today. In fact, without taxation he would not have had a company. One of his projects was building sidewalks in boomtown Detroit. People pay taxes, taxes wre used to hire his company, SPREADING THE WEALTH! His complaint was on fees (permits and the like), something neither candidate addresses.
Fees are a regressive tax. Most voters do not consider these taxes, but they definitely are taxes.
Great article. I am always amazed at the tunnel vision of so many small business owners. As though a few bucks in republican tax cuts, is better than having a large pool of customers with cash in hand?
Unless you are making at least $300,000 a year, the republican tax scam is actually costing you money - and that includes small business owners!
I noticed from the very beginning that neither McCain nor Palin were clear that it is NET profits that are taxed. Many businesses, even businesses you would call BIG business, declare 0 or very little in net profits. That's the complaint about Hollywood movies grossing hundreds of millions, for example.
It's not that hard to figure out what profit you want to declare and then put the rest of the money elsewhere - higher salaries, high retirement account contributions, more research spending, less depreciation, expand more, upgrade equipment, etc.
So for McCain and Palin to say businesses will be taxed out of business is WRONG. Now removing a deduction, like for healthcare, would have a BIG impact -- for one thing, it removes one of the ways to remove business profit, which also benefits employees at the same time.
I recently started a small business, a very small business, and what I want most are customers that have money to spend... and that is how Obama is good for my small business.
What I don't understand is... why would you decline to say who's better?... it almost seems like you would prefer Obama, so why not just say that?... I just think that declining to speak up allows those who won't shut up more say...
Yes, you're right, I went back and revised to make my stance more clear. Tim.
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