Don’t Overtax Small Businesses
Wednesday - August 24, 2011
A BBC reporter interviewed two young women during Britain’s recent riots. Reading the following exchange should send a chill up the spine of every American who believes in the danger of class warfare.
“Everyone was just going mad like a riot just chucking things, chucking bottles, breaking into shops; it was madness. It was good though. Yeah, good fun.”
“Have you been drinking all night?” asked the reporter. It was 9:30 a.m.
“Yeah, free alcohol.” Giggle. Pause. “Like, it’s the government’s fault. Yeah, conservatives. I dunny. It’s about showing the police we can do what we like. And now we have.”
“Why are you targeting local people, your own people?” the reporter asked.
“It’s the rich people. The people whoever got businesses. And that’s why all this is happening. Because of the rich people. We’re just showing the rich people we can do what we want.”
So, just who are these deplorable “rich people”?
To these young women out on a boozing, looting spree, the rich are all business owners and all conservatives. To our president, the rich are “millionaires and billionaires,” “corporate jet owners” and “those earning over $250,000 per year.”
But his overly broad definition like the British rioters’ unfairly lumps billionaires with small-business owners and husband-wife wage earners.
It’s true that some small-business owners have actually accumulated millions.
Authors Thomas J. Stanley, Ph.D. and William D. Daron, Ph.D. in their book, The Millionaire Next Door, create a composite of a typical American “millionaire” based on extensive surveys: Three of four are selfemployed business entrepreneurs (welding contractors, auctioneers, farmers, pest controllers, coin and stamp dealers, and paving contractors) and self-employed professionals like doctors and accountants, average age 57. They’re diligent savers and investors living on 7 percent of their net worth. They live well below their means, don’t buy expensive suits or watches, and drive American-made cars. “About 80 percent ... are firstgeneration affluent.”
Small-business owners are often unfairly characterized as rich.
I used to own a small business here. My salary often fell below that of the sales staff. Any profit gain went into business expansion, i.e., more employees, space, advertising (all back into Hawaii’s economy). When my old Chrysler went kaput, I noticed a fantastic lease deal on a small BMW: no money down. Perfect. Next day, I parked the BMW in my parking spot. Within days, each full-time employee petitioned me for a raise. BMW equals rich.
Calling an emergency staff meeting, I laid open my business ledger. My employees were completely stunned by our monthly overhead: salaries and commissions, health insurance, workers comp insurance, matching Social Security, high lease rent, GET, advertising, office equipment and supplies, accounting costs, banking fees, liability insurance, and one full-time administration person just to manage all the regulatory requirements so cavalierly imposed by our state and federal governments. One employee vowed, “I’ll never own a business. It’s too hard with too much risk. I’d rather go home at 5 o’clock and forget about work.” Something owners rarely do.
Why on earth would anyone want to punish our small businesses, the drivers of our economy? Our dry cleaners, dentists, florists and grocery store owners are assaulted on every front from health care mandates to tax hikes cloaked in subtle law.
Forbes recently reported, “Hawaii Adopts Obama Style Tax Hike On Rich,” citing SB 570 Gov. Abercrombie signed into law in June, “making Hawaii the first state in the nation to place a dollar cap on the itemized deductions that better-off taxpayers can claim. Note that Hawaii already has the highest state income tax rate in the nation.” Another swipe at small businesses.
Billionaire Warren Buffett agrees with the president that the (stillyet-to-be-defined) very rich should pony up more taxes. Better yet, here’s a truly American idea: free choice. Make paying more an option. Multimillionaires and billionaires like Buffett ($50 billion), Bill Gates ($56 billion), Oprah ($2.7 billion), George Lucas ($3.2 billion), Steven Spielberg ($3 billion), and Mark Zuckerberg ($13.5 billion) can choose to pay 10-20 percent (oh, heck, 100 percent) more in their income taxes. I say set the example. I call on Buffett-Obama billionaires to immediately launch a billionaire pay-more-tax option. In fact, make it prepaid to the bipartisan Congressional deficit “Super Committee.”
The remaining very “rich” who mistrust where government spends money (bailout bust) can opt out and give to worthy charities, buy 20 homes, play polo or vacation at Martha’s Vineyard.
Please, don’t punish success. Class warfare is hypocritical, un-American and dangerous.
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