Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Sunday, May 23, 2010
Sunday, March 21, 2010
WARNING! WARNING! WARNING!
Unsustainable Spending
By David Warren
A spectre is haunting Europe, and America -- the spectre of Keynesianism finally gone nuts.
What began, not very innocently, as a suggestion that governments should run deficits in bad times, and surpluses in good times, gradually "evolved." In the next phase, governments tried to balance at least the operating account during the best of times. In phase three, governments ran deficits by habit during the good times, but much bigger "stimulus" deficits during the bad times. We are now entering phase four.
Canadians tend to feel smug about this, for we look south at a fiscal catastrophe that had nothing to do with us. For the last generation, we have been trying to claw our way back to budgetary conditions before Pierre Trudeau broke the bank. This had once seemed a small price to pay for his "just society" (or "just watch me"). Surely it was worth mortgaging our children's future, and that of their children, and children's children, for the transient privilege of being governed by such a man. (I can still hear the erotic screams of the women, from the 1968 general election, as Trudeau passed by.)
By about 1984, we had had enough. Michael Wilson balanced the operating account, then Paul Martin balanced the overall budget, and today Jim Flaherty tries to keep the federal debt "shrinking" in proportion to national income. (Of course, the debt itself grows and grows.)
We feel smug because we are watching President Barack Obama do for the United States what Prime Minister Trudeau did for us -- although in their case, on top of what Obama's predecessors did. The U.S. national debt now exceeds $12.3 trillion in a $14.2 trillion economy, and the U.S. government is now piling it on with unprecedented new deficits. The U.S. Treasury's borrowing requirement is, as it were, coming up against the Great Wall of China.
Little things, such as the heart of the U.S. space program, are being gutted to make way for metastasizing social security entitlements and debt service payments that will soon swamp the entire federal budget -- thus requiring the elimination of more little things such as the army, navy and air force. At some point the entitlements simply can't be paid, without hyperinflation.
I am not exaggerating. The American debt is now at levels that ring bells at the International Monetary Fund. And as the world's biggest debtor rapidly accelerates its borrowing, the fiscal carrying capacity of the rest of the planet comes into question.
There are two large reasons why we cannot afford to be smug, up here. The first is that after adding the "entitlement" heritage of our provincial governments to the federal debt load, our position is not much better. The second is that even if it were much better, the tsunami coming from south of the border will anyway sweep all our dikes away.
The Obama administration's financial projections are extremely optimistic, yet even if they all come true, the U.S. debt will continue to grow unsustainably. The kind of alarm falsely placed in "global warming" would more usefully be directed towards the remarkable cooling effect this will have, as all our fiscal and demographic trends converge. For this is a predictable future; an issue where the numbers correspond to real things, not to mere speculation.
We can already see where the U.S. is headed, because Iceland and Greece are showing the way. Both have now passed a point of no return, and both are being followed down that plughole by Britain and several other European countries that will probably precede the U.S. into outright bankruptcy. The State of California also gives some clues.
While an optimist would say that we are witnessing the final demise of the welfare state, and good riddance, a pessimist would observe that everything must go down with it. Moreover, as we have seen from the history of Germany and other countries, fiscal catastrophe accentuates every latent threat to public order.
For our governments have created vast bureaucracies, employing immense numbers whose livelihoods depend entirely (whether they realize it or not) upon the capacity of profit-earning people to pay constantly increasing taxes.
It should have been grasped, decades ago, that the constant transfer of resources from the productive to the unproductive must eventually tip the ship. And when it does, real people go over the side, who get angry when they are thrown in the water. There are consequences to that anger.
The idea that we can spend our way out of a debt crisis -- or what I called above, "Keynesianism gone nuts" -- has already been rejected by the Tea Party movement in the U.S., and has always been rejected by voters of conservative tendency. They know what's wrong with the present order, and have an important teaching function to the rest of the electorate, which doesn't get it yet.
But more urgently, we are in need of a positive conception of how to rebuild economy and society, when Nanny State collapses under her own weight. For yelling "run!" is only a short-term solution.
A spectre is haunting Europe, and America -- the spectre of Keynesianism finally gone nuts.
What began, not very innocently, as a suggestion that governments should run deficits in bad times, and surpluses in good times, gradually "evolved." In the next phase, governments tried to balance at least the operating account during the best of times. In phase three, governments ran deficits by habit during the good times, but much bigger "stimulus" deficits during the bad times. We are now entering phase four.
Canadians tend to feel smug about this, for we look south at a fiscal catastrophe that had nothing to do with us. For the last generation, we have been trying to claw our way back to budgetary conditions before Pierre Trudeau broke the bank. This had once seemed a small price to pay for his "just society" (or "just watch me"). Surely it was worth mortgaging our children's future, and that of their children, and children's children, for the transient privilege of being governed by such a man. (I can still hear the erotic screams of the women, from the 1968 general election, as Trudeau passed by.)
By about 1984, we had had enough. Michael Wilson balanced the operating account, then Paul Martin balanced the overall budget, and today Jim Flaherty tries to keep the federal debt "shrinking" in proportion to national income. (Of course, the debt itself grows and grows.)
We feel smug because we are watching President Barack Obama do for the United States what Prime Minister Trudeau did for us -- although in their case, on top of what Obama's predecessors did. The U.S. national debt now exceeds $12.3 trillion in a $14.2 trillion economy, and the U.S. government is now piling it on with unprecedented new deficits. The U.S. Treasury's borrowing requirement is, as it were, coming up against the Great Wall of China.
Little things, such as the heart of the U.S. space program, are being gutted to make way for metastasizing social security entitlements and debt service payments that will soon swamp the entire federal budget -- thus requiring the elimination of more little things such as the army, navy and air force. At some point the entitlements simply can't be paid, without hyperinflation.
I am not exaggerating. The American debt is now at levels that ring bells at the International Monetary Fund. And as the world's biggest debtor rapidly accelerates its borrowing, the fiscal carrying capacity of the rest of the planet comes into question.
There are two large reasons why we cannot afford to be smug, up here. The first is that after adding the "entitlement" heritage of our provincial governments to the federal debt load, our position is not much better. The second is that even if it were much better, the tsunami coming from south of the border will anyway sweep all our dikes away.
The Obama administration's financial projections are extremely optimistic, yet even if they all come true, the U.S. debt will continue to grow unsustainably. The kind of alarm falsely placed in "global warming" would more usefully be directed towards the remarkable cooling effect this will have, as all our fiscal and demographic trends converge. For this is a predictable future; an issue where the numbers correspond to real things, not to mere speculation.
We can already see where the U.S. is headed, because Iceland and Greece are showing the way. Both have now passed a point of no return, and both are being followed down that plughole by Britain and several other European countries that will probably precede the U.S. into outright bankruptcy. The State of California also gives some clues.
While an optimist would say that we are witnessing the final demise of the welfare state, and good riddance, a pessimist would observe that everything must go down with it. Moreover, as we have seen from the history of Germany and other countries, fiscal catastrophe accentuates every latent threat to public order.
For our governments have created vast bureaucracies, employing immense numbers whose livelihoods depend entirely (whether they realize it or not) upon the capacity of profit-earning people to pay constantly increasing taxes.
It should have been grasped, decades ago, that the constant transfer of resources from the productive to the unproductive must eventually tip the ship. And when it does, real people go over the side, who get angry when they are thrown in the water. There are consequences to that anger.
The idea that we can spend our way out of a debt crisis -- or what I called above, "Keynesianism gone nuts" -- has already been rejected by the Tea Party movement in the U.S., and has always been rejected by voters of conservative tendency. They know what's wrong with the present order, and have an important teaching function to the rest of the electorate, which doesn't get it yet.
But more urgently, we are in need of a positive conception of how to rebuild economy and society, when Nanny State collapses under her own weight. For yelling "run!" is only a short-term solution.
Tuesday, February 2, 2010
Obama's Idea of "Austerity"
In the wildly unlikely case you mistook Obama's call for "austerity" as actual cost cutting by the Imperial State Bureaucracy...
Silly Citizen. He means austerity for you...not the government, Gaia forbid.
Read the entire article by Andrew Wilson.
wtp
Silly Citizen. He means austerity for you...not the government, Gaia forbid.
You don't have to be a proponent of small government to favor austerity. Communists and socialists have been doing it for years. So, too, have the mullahs. They are excellent practitioners of the same kind of austerity that sneers at free choice and reliably produces shoddy products and grinding poverty.
Price controls, shortages, queuing and rationing -- all those are key elements in the socialist tool kit. Since this administration was already prepared to ration health care , CO2 emissions and incomes (with severe tax penalties for anyone making more than $200,000 or $250,000 a year), why not ration jobs as well.
Read the entire article by Andrew Wilson.
wtp
Monday, November 30, 2009
Wednesday, November 18, 2009
You Have GOT to be Kidding!
You are NOT going to believe this. This is the sort of delusional thing that happens in Insane Asylums.
Read what Resident Obama actually had the nerve to say...out loud:
One can't help but wonder TO WHOM he gave this "stern warning".
One can only imagine he was shaving at the time.
wtp
Read what Resident Obama actually had the nerve to say...out loud:
President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession.
One can't help but wonder TO WHOM he gave this "stern warning".
One can only imagine he was shaving at the time.
wtp
Wednesday, November 11, 2009
The Employee Meeting
"Hat tip to George. Check it out:
President of the Company:
"I would like to start by thanking you for attending this meeting, though it's not like you had much of a choice. After all, attendance was mandatory. I'm also glad many of you accepted my invitation to your family members to be here as well. I have a few remarks to make to all of you, and then we'll retire to the ballroom for a great lunch and some employee awards.
"I felt that this meeting was important enough to close all 12 of our tire and automotive shops today so that you could be here. To reassure you, everybody is being paid for the day --- except me. Since our stores are closed we're making no money. That economic loss is mine to sustain. Carrington Automotive has 157 full time employees and around 30 additional part-timers. All of you are here. I thank you for that.
"When you walked into this auditorium you were handed a rather thick 78-page document. Many of you have already taken a peek. You were probably surprised to see that it's my personal tax return for 2008. Those of you who are adept at reading these tax returns will see that last year my taxable income was $534,000.00. Now I'm sure this seems rather high to many of you. So ... let's talk about this tax return.
"Carrington Automotive Enterprises is what we call a Sub-S - a Subchapter S corporation. The name comes from a particular part of our tax code. Sub-S status means that the income from all 12 of our stores is reported on my personal tax return. Businesses that report their income on the owner's personal tax return are referred to as "small businesses." So, you see now that this $534,000 is really the total taxable income - the total combined profit from all 12 of our stores. That works out to an average of a bit over $44,000 per store.
"Why did I feel it important for you to see my actual 2008 tax return? Well, there's a lot of rhetoric being thrown around today about taxes, small businesses and rich people. To the people in charge in Washington right now I'm a wealthy American making over a half-million dollars a year. Most Americans would agree: I'm just another rich guy; after all ... I had over a half-million in income last year, right? In this room we know that the reality is that I'm a small business owner who runs 12 retail establishments and employs 187 people. Now here's something that shouldn't surprise you, but it will: Just under 100 percent ... make that 99.7 percent of all employers in this country are small businesses, just like ours.
"Every one of these businesses reports their income on a personal income tax return. You need to understand that small businesses like ours are responsible for about 80 percent of all private sector jobs in this country, and about 70 percent of all jobs that have been created over the past year. You also need to know that when you hear some politician talking about rich people who earn over $200,000 or $500,000 a year, they're talking about the people who create the jobs.
"The people who are now running the show in Washington have been talking for months about raising taxes on wealthy Americans. I already know that in two years my federal income taxes are going to go up by about 4.5 percent. That happens when Obama and the Democrats allow the Bush tax cuts to expire. When my taxes climb by 4.5 percent the Democrats will be on television saying that this really isn't a tax increase. They'll explain that the Bush tax cuts have expired .. nothing more. Here at Carrington we'll know that almost 5% has been taken right off of our bottom line. And that means it will be coming off your bottom line.
"Numbers are boring, I know ... but let's talk a bit more about that $534,000. That's the money that was left last year from company revenues after I paid all of the salaries and expenses of running this business. Now I could have kept every penny of that for myself, but that would have left us with nothing to grow our business, to attract new customers and to hire new employees. You're aware that we've been talking about opening new stores in Virginia Beach and Newport News . To do that I will have to buy or lease property, construct a building and purchase inventory. I also have to hire additional people to work in those stores. These people wouldn't immediately be earning their pay. So, where do you think the money for all of this comes from? Right out of our profits .. right out of that $534,000. I need to advertise to bring customers in, especially in these tough times. Where do you think that money comes from? Oh sure, I can count it as an expense when I file my next income tax return .. but for right now that comes from either current revenues or last year's profits. Revenues right now aren't all that hot ... so do the math. A good effective advertising campaign might cost us more than $300,000.
"Is this all starting to come together for you now?
"Right now the Democrats are pushing a nationalized health care plan that, depending on who's doing the talking, will add anywhere from another two percent to an additional 4.6 percent to my taxes. If I add a few more stores, which I would like to do, and if the economy improves, my taxable income ... our business income ... could go over one million dollars! If that happens the Democrats have yet another tax waiting, another five percent plus! I've really lost track of all of the new government programs the Democrats and President Obama are proposing that they claim they will be able to finance with new taxes on what they call "wealthy Americans."
"And while we're talking about health care, let me explain something else to you. I understand that possibly your biggest complaint with our company is that we don't provide you with health insurance. That is because as your employer I believe that it is my responsibility to provide you with a safe workplace and a fair wage and to do all that I can to preserve and grow this company that provides us all with income. I no more have a responsibility to provide you with health insurance than I do with life, auto or homeowner's insurance. As you know, I have periodically invited agents for health insurance companies here to provide you with information on private health insurance plans.
"The Democrats are proposing to levy yet another tax against Carrington in the amount of 8 percent of my payroll as a penalty for not providing you with health insurance. You should know that if they do this I will be reducing every person's salary or hourly wage by that same 8 percent. This will not be done to put any more money in my pocket. It will be done to make sure that I don't suffer financially from the Democrat's efforts to place our healthcare under the control of the federal government. It is your health, not mine. It is your healthcare, not mine. These are your expenses, not mine. If you think I'm wrong about all this, I would sure love to hear your reasoning.
"Try to understand what I'm telling you here. Those people that Obama and the Democrats call "wealthy Americans" are, in very large part, America 's small business owners. I'm one of them. You have the evidence, and surely you don't think that the owner of a bunch of tire stores is anything special. That $534,000 figure on my income tax return puts me squarely in Democrat crosshairs when it comes to tax increases.
"Let's be clear about this ... crystal clear. Any federal tax increase on me is going to cost you money, not me. Any new taxes on Carrington Automotive will be new taxes that you, or the people I don't hire to staff the new stores I won't be building, will be paying. Do you understand what I'm telling you? You've heard about things rolling downhill, right? Fine ... then you need to know that taxes, like that other stuff, roll downhill. Now you and I may understand that you are not among those that the Democrats call "wealthy Americans," but when this "tax the rich" thing comes down you are going to be standing at the bottom of the mud slide, if you get my drift. That's life in the big city, my friends ... where elections have consequences.
"You know our economy is very weak right now. I've pledged to get us through this without layoffs or cuts in your wages and benefits. It's too bad the politicians can't get us through this without attacking our profits. To insure our survival I have to take a substantial portion of that $534,000 and set it aside for unexpected expenses and a worsening economy. Trouble is, the government is eyeing that money too ... and they have the guns. If they want it, they can take it.
"I don't want to make this too long. There's a great lunch waiting for us all. But you need to understand what's happening here. I've worked hard for 23 years to create this business. There were many years where I couldn't take a penny in income because every dollar was being dedicated to expanding the business. There were tough times when it took every dollar of revenues to replenish our inventory and cover your paychecks. During those times I earned nothing. If you want to see those tax returns, just let me know.
"OK ... I know I'm repeating myself here. I don't hire stupid people, and you are probably getting it now. So let me just ramble for a few more minutes. Most Americans don't realize that when the Democrats talk about raising taxes on people making more than $250 thousand a year, they're talking about raising taxes on small businesses. The U.S. Treasury Department says that six out of every ten individuals in this country with incomes of more than $280,000 are actually small business owners. About one-half of the income in this country that would be subject to these increased taxes is from small businesses like ours. Depending on how many of these wonderful new taxes the Democrats manage to pass, this company could see its tax burden increase by as much as $60,000. Perhaps more.
"I know a lot of you voted for President Obama. A lot of you voted for Democrats across the board. Whether you voted out of support for some specific policies, or because you liked his slogans, you need to learn one very valuable lesson from this election. Elections have consequences. You might have thought it would be cool to have a president who looks like you; or a president who is young, has a buff body, and speaks eloquently when there's a teleprompter in the neighborhood. Maybe you liked his promises to tax the rich. Maybe you believed his promise not to raise taxes on people earning less than a certain amount. Maybe you actually bought into his promise to cut taxes on millions of Americans who actually don't pay income taxes in the first place. Whatever the reason .. your vote had consequences; and here they are.
"Bottom line? I'm not taking this hit alone. As soon as the Democrats manage to get their tax increases on the books, I'm going to take steps to make sure that my family isn't affected. When you own the business, that is what you're allowed to do. I built this business over a period of 23 years, and I'm not going to see my family suffer because we have a president and a congress who think that wealth is distributed rather than earned. Any additional taxes, of whatever description, that President Obama and the Democrats inflict on this business will come straight out of any funds I have set aside for expansion or pay and benefit increases. Any plans I might have had to hire additional employees for new stores will be put aside. Any plans for raises for the people I now have working for me will be shelved. Year-end bonuses might well be eliminated. That may sound rough, but that's the reality.
"You're going to continue to hear a lot of anti-wealth rhetoric out there from the media and from the left. You can chose to believe what you wish .. .but when it comes to Carrington Automotive you will know the truth. The books are open to any of you at any time. I have nothing to hide. I would hope that other small business owners out there would hold meetings like this one, but I know it won't happen that often. One of the lessons to be learned here is that taxes ... all taxes ... and all regulatory costs that are placed on businesses anywhere in this country, will eventually be passed right on down to individuals; individuals such as yourself. This hasn't been about admonishing anyone and it hasn't been about issuing threats. This is part of the education you should have received in the government schools, but didn't.
"Class is now dismissed."
---------------------
A lesson every citizen should hear.
wtp
"I would like to start by thanking you for attending this meeting, though it's not like you had much of a choice. After all, attendance was mandatory. I'm also glad many of you accepted my invitation to your family members to be here as well. I have a few remarks to make to all of you, and then we'll retire to the ballroom for a great lunch and some employee awards.
"I felt that this meeting was important enough to close all 12 of our tire and automotive shops today so that you could be here. To reassure you, everybody is being paid for the day --- except me. Since our stores are closed we're making no money. That economic loss is mine to sustain. Carrington Automotive has 157 full time employees and around 30 additional part-timers. All of you are here. I thank you for that.
"When you walked into this auditorium you were handed a rather thick 78-page document. Many of you have already taken a peek. You were probably surprised to see that it's my personal tax return for 2008. Those of you who are adept at reading these tax returns will see that last year my taxable income was $534,000.00. Now I'm sure this seems rather high to many of you. So ... let's talk about this tax return.
"Carrington Automotive Enterprises is what we call a Sub-S - a Subchapter S corporation. The name comes from a particular part of our tax code. Sub-S status means that the income from all 12 of our stores is reported on my personal tax return. Businesses that report their income on the owner's personal tax return are referred to as "small businesses." So, you see now that this $534,000 is really the total taxable income - the total combined profit from all 12 of our stores. That works out to an average of a bit over $44,000 per store.
"Why did I feel it important for you to see my actual 2008 tax return? Well, there's a lot of rhetoric being thrown around today about taxes, small businesses and rich people. To the people in charge in Washington right now I'm a wealthy American making over a half-million dollars a year. Most Americans would agree: I'm just another rich guy; after all ... I had over a half-million in income last year, right? In this room we know that the reality is that I'm a small business owner who runs 12 retail establishments and employs 187 people. Now here's something that shouldn't surprise you, but it will: Just under 100 percent ... make that 99.7 percent of all employers in this country are small businesses, just like ours.
"Every one of these businesses reports their income on a personal income tax return. You need to understand that small businesses like ours are responsible for about 80 percent of all private sector jobs in this country, and about 70 percent of all jobs that have been created over the past year. You also need to know that when you hear some politician talking about rich people who earn over $200,000 or $500,000 a year, they're talking about the people who create the jobs.
"The people who are now running the show in Washington have been talking for months about raising taxes on wealthy Americans. I already know that in two years my federal income taxes are going to go up by about 4.5 percent. That happens when Obama and the Democrats allow the Bush tax cuts to expire. When my taxes climb by 4.5 percent the Democrats will be on television saying that this really isn't a tax increase. They'll explain that the Bush tax cuts have expired .. nothing more. Here at Carrington we'll know that almost 5% has been taken right off of our bottom line. And that means it will be coming off your bottom line.
"Numbers are boring, I know ... but let's talk a bit more about that $534,000. That's the money that was left last year from company revenues after I paid all of the salaries and expenses of running this business. Now I could have kept every penny of that for myself, but that would have left us with nothing to grow our business, to attract new customers and to hire new employees. You're aware that we've been talking about opening new stores in Virginia Beach and Newport News . To do that I will have to buy or lease property, construct a building and purchase inventory. I also have to hire additional people to work in those stores. These people wouldn't immediately be earning their pay. So, where do you think the money for all of this comes from? Right out of our profits .. right out of that $534,000. I need to advertise to bring customers in, especially in these tough times. Where do you think that money comes from? Oh sure, I can count it as an expense when I file my next income tax return .. but for right now that comes from either current revenues or last year's profits. Revenues right now aren't all that hot ... so do the math. A good effective advertising campaign might cost us more than $300,000.
"Is this all starting to come together for you now?
"Right now the Democrats are pushing a nationalized health care plan that, depending on who's doing the talking, will add anywhere from another two percent to an additional 4.6 percent to my taxes. If I add a few more stores, which I would like to do, and if the economy improves, my taxable income ... our business income ... could go over one million dollars! If that happens the Democrats have yet another tax waiting, another five percent plus! I've really lost track of all of the new government programs the Democrats and President Obama are proposing that they claim they will be able to finance with new taxes on what they call "wealthy Americans."
"And while we're talking about health care, let me explain something else to you. I understand that possibly your biggest complaint with our company is that we don't provide you with health insurance. That is because as your employer I believe that it is my responsibility to provide you with a safe workplace and a fair wage and to do all that I can to preserve and grow this company that provides us all with income. I no more have a responsibility to provide you with health insurance than I do with life, auto or homeowner's insurance. As you know, I have periodically invited agents for health insurance companies here to provide you with information on private health insurance plans.
"The Democrats are proposing to levy yet another tax against Carrington in the amount of 8 percent of my payroll as a penalty for not providing you with health insurance. You should know that if they do this I will be reducing every person's salary or hourly wage by that same 8 percent. This will not be done to put any more money in my pocket. It will be done to make sure that I don't suffer financially from the Democrat's efforts to place our healthcare under the control of the federal government. It is your health, not mine. It is your healthcare, not mine. These are your expenses, not mine. If you think I'm wrong about all this, I would sure love to hear your reasoning.
"Try to understand what I'm telling you here. Those people that Obama and the Democrats call "wealthy Americans" are, in very large part, America 's small business owners. I'm one of them. You have the evidence, and surely you don't think that the owner of a bunch of tire stores is anything special. That $534,000 figure on my income tax return puts me squarely in Democrat crosshairs when it comes to tax increases.
"Let's be clear about this ... crystal clear. Any federal tax increase on me is going to cost you money, not me. Any new taxes on Carrington Automotive will be new taxes that you, or the people I don't hire to staff the new stores I won't be building, will be paying. Do you understand what I'm telling you? You've heard about things rolling downhill, right? Fine ... then you need to know that taxes, like that other stuff, roll downhill. Now you and I may understand that you are not among those that the Democrats call "wealthy Americans," but when this "tax the rich" thing comes down you are going to be standing at the bottom of the mud slide, if you get my drift. That's life in the big city, my friends ... where elections have consequences.
"You know our economy is very weak right now. I've pledged to get us through this without layoffs or cuts in your wages and benefits. It's too bad the politicians can't get us through this without attacking our profits. To insure our survival I have to take a substantial portion of that $534,000 and set it aside for unexpected expenses and a worsening economy. Trouble is, the government is eyeing that money too ... and they have the guns. If they want it, they can take it.
"I don't want to make this too long. There's a great lunch waiting for us all. But you need to understand what's happening here. I've worked hard for 23 years to create this business. There were many years where I couldn't take a penny in income because every dollar was being dedicated to expanding the business. There were tough times when it took every dollar of revenues to replenish our inventory and cover your paychecks. During those times I earned nothing. If you want to see those tax returns, just let me know.
"OK ... I know I'm repeating myself here. I don't hire stupid people, and you are probably getting it now. So let me just ramble for a few more minutes. Most Americans don't realize that when the Democrats talk about raising taxes on people making more than $250 thousand a year, they're talking about raising taxes on small businesses. The U.S. Treasury Department says that six out of every ten individuals in this country with incomes of more than $280,000 are actually small business owners. About one-half of the income in this country that would be subject to these increased taxes is from small businesses like ours. Depending on how many of these wonderful new taxes the Democrats manage to pass, this company could see its tax burden increase by as much as $60,000. Perhaps more.
"I know a lot of you voted for President Obama. A lot of you voted for Democrats across the board. Whether you voted out of support for some specific policies, or because you liked his slogans, you need to learn one very valuable lesson from this election. Elections have consequences. You might have thought it would be cool to have a president who looks like you; or a president who is young, has a buff body, and speaks eloquently when there's a teleprompter in the neighborhood. Maybe you liked his promises to tax the rich. Maybe you believed his promise not to raise taxes on people earning less than a certain amount. Maybe you actually bought into his promise to cut taxes on millions of Americans who actually don't pay income taxes in the first place. Whatever the reason .. your vote had consequences; and here they are.
"Bottom line? I'm not taking this hit alone. As soon as the Democrats manage to get their tax increases on the books, I'm going to take steps to make sure that my family isn't affected. When you own the business, that is what you're allowed to do. I built this business over a period of 23 years, and I'm not going to see my family suffer because we have a president and a congress who think that wealth is distributed rather than earned. Any additional taxes, of whatever description, that President Obama and the Democrats inflict on this business will come straight out of any funds I have set aside for expansion or pay and benefit increases. Any plans I might have had to hire additional employees for new stores will be put aside. Any plans for raises for the people I now have working for me will be shelved. Year-end bonuses might well be eliminated. That may sound rough, but that's the reality.
"You're going to continue to hear a lot of anti-wealth rhetoric out there from the media and from the left. You can chose to believe what you wish .. .but when it comes to Carrington Automotive you will know the truth. The books are open to any of you at any time. I have nothing to hide. I would hope that other small business owners out there would hold meetings like this one, but I know it won't happen that often. One of the lessons to be learned here is that taxes ... all taxes ... and all regulatory costs that are placed on businesses anywhere in this country, will eventually be passed right on down to individuals; individuals such as yourself. This hasn't been about admonishing anyone and it hasn't been about issuing threats. This is part of the education you should have received in the government schools, but didn't.
"Class is now dismissed."
---------------------
A lesson every citizen should hear.
wtp
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