I’m the “Real McCoy” – How About You?

A real stimulus – Lower Taxes on Small Businesses – Published by The St. Petersburg Times Letter to the Editor, February 8th, 2009

The Real McCoy can survive and prosper under the McCain plan for small business, especially with regard to taxes and healthcare.  Real McCoy hopes to grow business by a minimum of 35% this year, with a goal of 200%, which would include a significant gain in employment, significantly more than big business.

Lonely at the top!

The Real McCoy’s approach is the purest form of Capitalism you can imagine.  And what does one or twenty years in business teach a Real McCoy?  If you are truly the Real McCoy of small business, it is all about grow or die.  Odd as it may seem, it is the exact opposite of government!

Taxes – A typical small business like Real’s is self-funded.  Real might have a loan from Real’s folks, a 2nd mortgage on the house and, with luck, a small line of credit from a local bank.  So McCoy’s business needs to earn Real income to cash flow and grow.  Any tax increases will hurt McCoy’s ability to sustain and grow our business.  Obama’s plan is to tax the wealthy individual, but he forgot about the Real McCoy.  Increasing taxes on McCoy’s small business that earns $200,000 is not spreading the wealth around.  Real McCoy must spread the wealth around to keep loyal employees who will help Real sustain and grow Real’s business.  Like Real, small business owners spread the wealth to middle-income and lower-income earners that depend on Real.  So it is about Real people and Real jobs, not government.

The Real McCoy’s chosen to reinvest most of the “after tax” profits in the business.  This comes in the form of Real employment, including Real competitive salaries, Real payroll taxes, Real benefits to include medical, dental and a Real top-notch wellness program that includes a Real company owned gym.  Plus McCoy has invested in state-of-the-art technology for every Real employee.  McCoy has a flexible work from home program to save on foreign oil and improve Real people’s attitude, a “Real Go Green program and Real Town Hall meetings.

Both parties tout plans to help small businesses.  Obama’s tax credits to small businesses under 50 employees must go to the employee.  Over 50 employees your taxed up to 7% of payroll and with all the reporting required for businesses, we’ll get stuck with the paperwork, which would bury me or I’d have to hire someone to do it for me.   What if you have 51, 52, 53 maybe 60 employees?  You’d have to let them go or pay a significant penalty.  Maybe look for more independent contractors, and more games to be played…

Tax credits to hire new employees for small business from Obama falls way short.  McCoy’s business typically will invest $75-100,000 in the first year on a new employee, which includes salary, payroll taxes and benefits.  Obama’s tax credits are designed to help unskilled labor get a job at McDonald’s or maybe Starbucks, not small business seeking skilled workers to help them grow.

The Real McCoy needs skilled labor.  McCoy knows they need 6-12 months to train even the most skilled worker for him or her to become productive.  That means a Real large investment, even to employ one skilled worker.  The Real McCoy can’t afford to pay taxes on $200,000, not entitlements that far fall short of helping Real small business grow.

Obama gives big business the same tax credits as small business, plus lower-income workers will get additional breaks and entitlements from Obama’s plan.  This allows big business to pay unskilled labor less.  Bottom line, no government subsidy will replace a tax cut for small business.   Subsidies always come with a price.  More paperwork, more bureaucracy, more pork, more fraud, more government…

Why is no one talking about McCain’s plan to leave capital gains tax alone?  Unlike Obama, who wants to increase capital gains tax.  Obama doesn’t think we can make a buck in this market, so who cares!  McCain would actually like to lower capital gains tax.

Why is no one talking about Letting businesses expense technology and equipment in the same year they buy it?  Under the current expensing provision, companies can write off half their equipment outlays in the first year and must depreciate other costs over a longer period.

Healthcare – The Real McCoy can’t increase his prices 35 – 60% to his customers like the major insurance carriers can.  National healthcare plans, such as Medicare and Medicaid are responsible in part, greed on the part of healthcare industry is responsible in part and fraud follows close behind.  Healthcare providers, nurses and doctors are Real people and get a pass.   The healthcare industry needs to let Real people work out a plan (like the plan proposed by the AMA) that offers individual choice and fair market competition which far outweighs any other social issue simply because we are  in survival mode, something big government does not understand.

Both candidates healthcare plans benefit and cover large numbers of uninsured people.  Obama’s 2 million less.  Source http://www.hsinetwork.com/

McCain’s plan costs $287 billion annually, around $165 billion less than Obama and reduces uninsured by 27.5 million.

Obama’s plan costs $452 billion plus annually and reduces the uninsured by 25.5 million.  One of the reasons for the added cost, Obama’s plan does not discriminate against illegal immigrants, who will be entitled to coverage under his national Healthcare plan.

McCain does not tax businesses who do not offer health care.  Employees who are not offered insurance by their employers will get a tax credit.

Obama’s claim that McCain taxes those insured under his plan is essentially bogus, as employees getting insurance from their employers continue to get pre-tax benefits and if the spend less than the tax credits get a refund.  For example, there’s a plan for single females, over 40, from a large insurance carrier for as little as $200 per month.

Obama’s National Healthcare Plan takes the responsibility out of the hands of the people to make their own decisions about the quality and cost of healthcare.  That’s opposite of the current H.S.A. savings plan the Real McCoy offers as a lower cost alternative.

McCain’s plan will offer a tax credit to individuals which allows the individual to choose between plans makes the choices.  Imagine the competitive pressure on insurers, health care providers, especially pharmaceutical companies (especially when McCain allows us to buy across the border) and health care equipment and supply vendors. Affordable, quality healthcare can only happen if there is individual choice.

If Obama wins this election, look for the Real McCoy’s of this world to end up the Real Minority and end up on the endangered species list.  Take away the incentive to make money, the American dream and our freedoms will be compromised and eventually disappear.  Obama’s plan for big government will become a self-fulfilling prophecy, except we will no longer be the big government calling the shots.  Try China.  Try being pro-choice when your only choice is boy or girl!  Just one.

About Idea Capitalist
Family guy and entrepreneur. Small Business owner. NFIB Leadership Council member. Serial blogger.

One Response to I’m the “Real McCoy” – How About You?

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