How the Government is Stopping the Heart of our Economy

by Erich

urbanprepping.com keyed me on to a great post put out by AboveTopSecret.com that I had to share with you guys (thanks Vic :)).

Although the letter may be fictional, I think it summarizes our economic situation perfectly and shows how the government’s tax and “stimulus” policies are doing nothing but worsening the current situation. I just don’t get how these politicians with no business experience think they can fix the economic crisis we are in.

It’s time to get your preps in order because the worst is yet to come…

Subject: Letter from the Boss

To All My Valued Employees,

There have been some rumblings around the office about the future of this company, and more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn’t pose a threat to your job.

What does threaten your job however, is the changing political landscape in this country. Of course, as your employer, I am forbidden to tell you whom to vote for – it is against the law to discriminate based on political affiliation, race, creed, religion, etc.

Please vote who you think will serve your interests the best. However, let me tell you some little tidbits of fact which might help you decide what is in your best interest. First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back story.

This back story is often neglected and overshadowed by what you see and hear sure, you see me park my Mercedes outside. You’ve seen my big home at last year’s Christmas party. I’m sure all these flashy icons of luxury conjure up some idealized thoughts about my life. However, what you don’t see is the back story.

I started this company 12 years ago. At that time, I lived in a 300 square foot studio apartment for 3 years. My entire living space was converted into an office so I could put forth 100% effort into building a company which, by the way, would eventually employ you.

My diet consisted of Ramen noodles because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn’t have time to date. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business — hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting Nordstrom’s for the latest hot fashion item, I was trolling through the Goodwill store extracting any clothing item that didn’t look like it was birthed in the 70’s.

My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, will be able to afford these luxuries my friends supposedly had.

So, while you physically arrive at the office at 9 a.m., mentally check in at about noon, and then leave at 5 p.m., I don’t. There is no “off” button for me. When you leave the office, you are done and you have the weekend all to yourself. I unfortunately do not have the freedom. I eat, ****, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to me like a one day old baby.

You, of course, only see the fruits of that garden — the nice house, the Mercedes, the vacations. You never realized the back story and the sacrifices I’ve made. Now, the economy is falling apart and I, the guy that made all the right decisions, sacrificed and saved his money, have to bail-out all the people who didn’t.

The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for. Yes, business ownership has is benefits but the price I’ve paid is steep and not without wounds. Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit and let me tell you why:

I am being taxed to death and the government thinks I don’t pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payroll taxes. Workers compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man just to manage all these taxes and then guess what? I have to pay taxes for employing him. Government mandates and regulations and all the accounting that goes with it, now occupy most of my time. On Oct 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes. You know what my “stimulus” check was? Zero. Nada. Zilch.

The question I have is this: Who is stimulating the economy? Is it me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, is it the single mother sitting at home pregnant with her fourth child waiting for her next welfare check?

Obviously, government feels the latter is the economic stimulus of this country. The fact is, if I deducted (Read: Stole) 50% of your paycheck you’d quit and you wouldn’t work here. I mean, why should you? That’s nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree which is why your job is in jeopardy. Here is what many of you don’t understand … to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn’t need to pay taxes, guess what? Instead of depositing that $288,000 into the Washington black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don’t defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart? Business is at the heart of America and always has been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers in Washington believe the mud of America are the essential drivers of the American economic engine.

Nothing could be further from the truth and this is the type of change you can keep. So where am I going with all this? It’s quite simple. If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV payment and for your child’s future. Frankly, it isn’t my problem any more. Then, I will close this company down, move to another country, and retire.

You see, I’m done. I’m done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship.

While tax cuts to 95% of America sounds great on paper, don’t forget the back story: If there is no job, there is no income to tax. A tax cut on zero dollars is zero. So, when you make decision to vote, ask yourself, who understands the economics of business ownership and who doesn’t? Whose policies will endanger your job? Answer those questions and you should know who might be the one capable of saving your job. While the media wants to tell you “It’s the economy Stupid” I’m telling you it isn’t.

If you lose your job, it won’t be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the Constitution, and will have changed its landscape forever. If that happens, you can find me on a beach, retired, and with no employees to worry about.

Signed, your boss

via abovetosecret.com

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21 Comments»

Comment by Eric
2011-10-20 20:19:08

What a load of crap. This cheeky ‘letter’ – purely a piece of conservative propaganda – shows no understanding of the real political machinations that occur either in government or in corporations.

I wish I knew how to respond intelligently to such an absurd post, but I don’t even know where to start. This is wrong and deliberately misleading in more ways than I can express.

Comment by Tactical Intelligence
2011-10-21 16:24:23

What are you implying are “the real political machinations”? Can you expand on that? I’m definitely open to all sides of the issue.

While I agree that this is propaganda, there is a lot of truth to these statements. Government (and I mean that as both sides of the aisle) have imposed regulations over the years that are squeezing out the small/medium-business owner from competing. Either through regulations that favor the large corporations (since they have the money and resources to brush off those regulations) to taxing these businesses to the point that they have to lay off workers.

It’s businesses that create value, which in turn stimulate an economy, not government programs and increased taxes. Our country does not have a revenue problem it has a spending problem (social programs, military, etc). And both parties are to blame.

We have been living off an economy that is based on debt not production. That is clearly not sustainable. And as this ponzi scheme continues to unravel all around us, it’s the little guy that will be hurt most.

There’s plenty of blame to go around (governments, financial sector, etc) However, just because you dismiss it as “conservative propaganda” doesn’t make it false.

 
Comment by NetRanger
2011-10-24 20:47:51

Hey Eric, how many businesses have you run? Myself, only 2. Co-owner of an ISP and sole owner of a Systems Engineering group.

The reason you can’t respond intelligently is because there is no intelligent response to that other than, “Yep.”

“What a load of crap.” Really? The load of crap is in your liberal head that has never dealt with the heavy burden of taxes and government regulations. Its a load of crap to you because you don’t want to believe he sacrificed. Guys like you want to think that he just got a lucky break and then got rich.

So, which are you closer to? …his spendthrift friends that blew all their money or the welfare queen waiting for your check?

Why am I even explaining this to your. Your mind is already made up. The corporation has already got you swayed the way it wants and you’ll vote just like they show you.

The sad thing is that the letter makes it seem like there is a political alternative to wrecking the economy. There isn’t. The left. The right. The dumbastardcrats. The repukeblicons. The liberals. The conservatives. They are all the same. More government.

The RESET is coming. Eric and all his buddies will be confused, disoriented and starving while myself and the guy that wrote the letter will be living in bigger houses and owning more land because we know how to thrive in adverse conditions. The problem with government is they want to box you in, block all the exits, strap you down and suck you dry. They have just about done it. …and Eric and his kind say, “Yeah! They’ve lived in the lap of luxury! Let them SUFFER!”

Have fun Eric. Your time is coming.

 
 
Comment by Hilary
2011-10-20 21:27:56

Of course it is a bit of propaganda. But as someone who has been in business in the past I accept everything he has to say – I won’t go into business hiring staff as it takes half a staff member to service the government requirements of having a couple of staff members, so that is another tax.

No, I say this letter is fair comment. If Eric is prepared to go into specifics one might engage him in a conversation. Global statements such as he gives are just the emotional claptrap that he appears to be disdaining.

Comment by Tactical Intelligence
2011-10-21 16:25:56

Exactly.

 
 
Comment by ZeitGeist
2011-10-21 19:33:25

http://www.zeitgeistmovie.com/

Give that moments of your time and eyes will be opened.

Comment by Tactical Intelligence
2011-10-21 19:59:42

ZeitGeist,

Thanks for the link. I’ve seen addendum and “the movie” but didn’t know zeitgeist released a new movie this year. I’ll be sure to check it out.

 
 
Comment by Billy Rudin
2011-10-25 12:55:30

I don’t have a problem with decreasing excessive and stifling regulation and minimizing taxes. It is important to keep in mind though that the rate of corporate tax is relatively low. Quoting from http://www.ritholtz.com/blog/2011/04/corporate-tax-rates-then-and-now/:

Corporate Taxes as a Percentage of Federal Revenue
1955 . . . 27.3%
2010 . . . 8.9%

Corporate Taxes as a Percentage of GDP
1955 . . . 4.3%
2010 . . . 1.3%

Individual Income/Payrolls as a Percentage of Federal Revenue
1955 . . . 58.0%
2010 . . . 81.5%

Another complaint often levied is that bankers that took risk with their investments did not have to bear the brunt of those poor decisions because they were effectively bailed out by the government. This article http://www.usatoday.com/money/companies/management/story/CEO-pay-2010/45634384/1 reports that the median top CEO salaries in 2010 rose by 27% while workers in private industry saw their wages grow by 2.1%. The median salary for CEO’s was 9 million dollars.

Finally, there is the concern about corporate welfare with subsidies. For this I use a quote from http://www.corporations.org/welfare/ “The $150 billion for corporate subsidies and tax benefits eclipses the annual budget deficit of $130 billion. It’s more than the $145 billion paid out annually for the core programs of the social welfare state: Aid to Families with Dependent Children (AFDC), student aid, housing, food and nutrition, and all direct public assistance (excluding Social Security and medical care).” “After World War II, the nation’s tax bill was roughly split between corporations and individuals. But after years of changes in the federal tax code and international economy, the corporate share of taxes has declined to a fourth the amount individuals pay, according to the US Office of Management and Budget.” –Boston Globe series on Corporate Welfare

I am a small business owner and have been since 1993.

 
Comment by Marty Jensen
2011-10-31 09:38:38

I think perhaps you have been misled by the propaganda of businesses that “regulations” are always bad, always stifling of small/medium business. Many regulations are simply filling in the details of statutes passed by legislatures–the forms needed or the addresses to contact for various laws to be put into effect.

More important, the idea behind those laws is always some perceived public good. You may disagree that keeping open water poison-free or preventing gender discrimination (for example) is worth the regulations needed to do so.

But do not simply say all regulations are bad, anymore than you can say all of the ten commandments are bad. They both simply set out rules that we agreed should apply to make our community lives better.

2011-10-31 16:41:51

Hi Marty,

Nowhere did I say that ALL regulations were bad. In fact there are many regulations regarding businesses that are very important and in certain areas I would argue more regulation would have prevented much of the economic collapse we are seeing (ie the derivative mess).

What I have an issue with is when Government’s regulation prevents small businesses from growing or even getting off the ground (as is the case with a friend of mine’s business).

The primary issue I have is regulation in the form of taxes, but aside from that, things like health reform regulations, hobbling energy/environment regulations, and tax complexities are stifling this nation’s small businesses. Let me provide you an illustration:

Small companies pay 67% more to be in compliance with the tax code than do larger companies. Not only does tax complexity weigh especially heavily on small employers, who don’t have the time or money to hire professional administrators, but over 70% of small businesses file their taxes as “pass-through” entities. In other words, small business owners file their firms’ taxes under their own personal returns.

And what’s more frustrating is the current administration wants to increase taxes on individuals earning over $250,000 a year, which would include small business who file their taxes as “pass-through” entities. Any increase in the level of already crippling taxes would make it that much harder for small business owners to make payroll, let alone hire any new employees.

 
 
Comment by Exile
2011-10-31 14:58:44

As a small business owner I often get the “talking point” of you only pay 18% income tax. That’s true I do only pay 18% tax on any money my company pays me but my company already paid 39% tax on that money so it’s really being taxed at 57%. If I paid myself the same amount as a wage then the company would only pay CPP and EI on the money so about 7% and I would pay 48% tax for a total tax burdin of 54%.

So while people scream about the “low” tax on business owners they are looking at only one of the taxes on that money.

2011-10-31 16:43:01

You’re exactly right.

 
 
Comment by Toby
2011-11-08 12:24:51

When I was employed for a small partnership and paid their taxes, it really hit home for me. I could see that it may have been a partnership on paper, but the government took 1/3 of all their profits in some form or another of taxes. I decided I did not want to own my own business. The comment above about the owner being “married” to the business – I’ve seen that over and over.

My family is also paying state taxes, federal taxes, property taxes, gasoline taxes, auto registration taxes, and FICA and Federal taxes from our paychecks. (I’m sure I’ve forgotten a few others)

Every time the government prints more money, then money, in general, is devalued. This is another form of taxation. The government gets to spend that newly printed paper before it becomes devalued; you, on the other hand, are left with less buying power from your hard earned money.

So……just tell me where “your boss” is moving to…….I ready to move there myself.

Comment by Tactical Intelligence
2011-11-09 07:46:48

With all the taxes (and hidden taxes like inflation) our tax rate is exceeding 50%. It’s robbery. Nothing less.

 
 
Comment by Mountaineer
2011-11-17 23:09:46

This country is falling apart. This world is falling apart. My only hope is that I can find some cave somewhere where I can peacefully live out my days growing dandelions. Because, as a few other people have suggested, the little guys like me will be running around like headless chickens while business owners and entrepreneurs build their own little kingdoms on the ruins of modern society. What a wonderful way to look at the future.

 
Comment by John Foy
2011-12-09 10:20:24

It’s easy to think we should have what the upper class has but there is a flaw with that thinking. First of all the upper class will never surrender what they have worked for so you would never see it even if it happened. Second you have to have workers and you have to have bosses. The pay is based on which group you are in. If everyone had the same amount of money or clout there would be no reason to work.

 
Comment by Vinsanity
2011-12-09 11:03:03

If you don’t know how to respond intelligently, that suggests you are not intelligent enough to understand the issue at hand or the “real political machinations”.

Eric, I assume you want the harvest while doing nothing with the seed nor the plowing – USA don’t work that way. That is the heart of the matter.

 
Comment by Futureatstake
2011-12-15 11:35:04

What we have gone away from is the American System and have been on this monetary system for so long we zombies to it. The truth of the matter is the financial sector owns the governments and not just ours. This system of taxes. e.t.c is designed for a slow literal death of US. The people. The empire always said that growing is not an option.. That keeping us stupid and creating ways to kill us slowly is that answer. We are letting the empire destroy the only vessel of true freedom we have and our forefathers fought and died for. They understood that MONEY would be the end of us all because we worshiped that instead of a physical production, science driven type of economy. I’m not saying there shouldn’t be a form of currency but think about it. what gives something value? We do! What is true value? A creative process of our minds to create new technology and a better standard of living(via preamble of the constitution) thru great science driven projects like what NASA does, that promote smaller business opportunities. Well, the bankers/Governments/empire does not want this. They want to keep us stupid and tax us via a monetary system and not a system of creativity I mean real creativity for man kinds future. Our forefathers knew this, its what the constitution is a bout. Alot of this so called economic problems is cause by empire/wall street speculation. We don’t need this parasite. They are the ones imposing this crap on us. Do your research on the East India company. Its a system of oligarchy that we are on. We need to go back to our AMERICAN SYSTEM of building ourselves out of debt and getting rid of the fictitious debt that we “so called” owe. That wall street, the banks(FED) and our government has put on us because they are pawns of the empire. They control us via money. It will be the death of us all. Worldwide. environmentalism and zero growth will be the death of us. I know I’m not a good writer but I hope you understand the jest of it. No disrespect either.

 
Comment by untrue
2011-12-22 08:41:09

Netranger is spot on. Eric cannot respond because anything he says will be a Liberal knee jerk reaction. Liberals dont rule with reason and logic they rule with feel-good emotional socialist agendas.

 
Comment by Don
2012-08-22 04:28:24

Corporate does not pay taxs you pay it for them in highter cost of what they sell think about it when their taxs go up the cost of the product goes up to pay for it until they can no longer raise the price of the product the you get layed off

 
Comment by Mattz
2012-12-04 13:09:49

Amazingly stupid piece of propaganda that fails on its face to actually understand the way economics work.

Businesses do not hire based on taxes and regulations. Look at the hedge funds that gain millions, sometimes billions, in profits per year yet hire only a handful of people. Do you honestly think they will somehow hire more simply because taxes suddenly went down? Of course they won’t because they can still manage to remain profitable, in fact become even more profitable, without having to hire any more people.

The argument that somehow, someway, taxes are what drives hiring and firing is patently absurd. Hirng and firing is done based on demand and production. If your demand starts climbing, you start hiring more workers. The fictional author of this screed bemoans that he lived an austere lifestyle while his friends partied it up. And now this person is employing 14 people. Well, why did he not hire those 14 people right away? Why did he wait so long to begin the process of hiring? Was it because the mean old government was somehow taking away all his money? No! Simply demand. Demand dictated he needed those extra people to meet demand and increase production. If he did not need more people to meet demand, he wouldn’t hire them. There is no reason to hire someone to do a job that simply does not need to be done.

But how do we create demand? Simple. By spending money. One more tax cut for the Waltons won’t make them hire more people and open more Walmarts; more people walking into their stores demanding more goods and services will (not that I’m advocating for a wage suppressing hawker of Chinese junk mind you). And by putting money into the hands of poor and middle class people, either by social programs or by wage increases, is the only way to do so.

It is not the dreaded taxes and regulations that are killing our economy. We’ve heard this same idea trumpted for decades. Taxes are the lowest they have been since the 1980s, both personal and corporate. And corporate profits along with the Dow are at their highest tahn they have been in decades. If it were taxes that dictated employment practices we should logically see total employment. No, what is killing our economy is the simple fact that wealth is now being concentrated into the hands of a very few while the rest of us are living paycheck to paycheck.

Though I agree with the rest of you. Eric, by his own admission, is certainly not intelligent enough to understand what is going on since he is unable to craft an intelligent response.

 
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