The Endangered Species, Entrepreneurs, a.k.a. Small Business Owners

President Obama is disingenuous when he says he is championing small business and the middle class.  Most small business owners are Sole Proprietors, Limited Liability Corps (LLCs) or Sub S Corps.  I own a Sub S Corp.  President Obama knows the challenges I face.  He is counting on you, the voter, to lump small business owners like me into his campaign to denigrate the high income earners in this country.

What he doesn’t want you to know is small business people, like me, often take a lesser salary, but often earn more than his definition of   “rich” because I have to pay taxes on the combined total of my salary and my business earnings.   Both are considered ordinary income.  By ordinary income, I mean income you and I pay taxes on after pre-tax expenses and deductions, like anyone else earning 1099 or W-2 income.

Keep in mind the risk to a small business owner.  If my business loses money, my salary and my business is in jeopardy.  It is a constant challenge to a small business to earn enough money to employ people, to grow and still earn a salary, in that order.  Contrast that with government subsidized businesses like GE and Solyndra.  Imagine if President Obama had the vision to subsidize small businesses to the tune of Solyndra or GE.  Take Solyndra’s $500 million in taxpayer dollars and give it to 500 small businesses, each with 20 employees or the equivalent of 1,000 employees.  Take my company’s track record over the past 2 years and small businesses would have increased employment by 40%.  I have a neighbor down the street who owns a small business, who increased his small business employment by 3-400 percent, without a government subsidy.

I run a small business, going on 25 years.  I pay taxes on my salary as an employee of my business and on the income my small business earns, both as ordinary income.  For many years, my business didn’t earn income.  For many years, my salary was well below the poverty line.  There were many years I was eligible for government assistance and I refused to take it.

How do you put a price on all the sacrifices a small business owner makes?  How do you quantify the years of no or little income you live with while supporting your business and fellow employees.  You pay their salary, you pay suppliers, you continue to pay them while you wait to get paid by your customers.  How do you quantify the debt you assume, including 2nd mortgages, credit cards, personal and bank loans.  How do you quantify the risks you take only to emerge from that debt as a job creator.  Only to be told, “You didn’t build that…,” the government built that.”  You’re branded greedy, uncaring if you are a Christian who believes in the sanctity of life and racist?  Like Mitt Romney I believe a women should have a choice to abort a pregnancy in the case of rape or incest, yet I’m extreme!?

My business is classified as an S Corp.  Today my income tax rate on ordinary income due to the income my small business earns, in an Obama administration, in the next four years, if he is reelected, will be much higher, 35 – 44.5%.   Today it’s 28%.  From that point forward you can make the argument there are tax breaks, subsidies, deductions for both personal and business income.

Argue the advantages and disadvantages until the cows come home.  The bottom line is the effective tax rate.  The effective tax rate for most small businesses will increase from 28% to at least 35% .  That’s huge.  Even more significant, more important and what President Obama doesn’t want you to know is most small businesses reinvest the income they earn from their business back into their business on sales and marketing programs and personnel and consequently accounts receivable to grow.  This practice creates jobs in all segments of the business.  In my case, I reinvested one-half (1/2) my ordinary income in jobs and other current and performing assets, increasing employment (salaries by over 40 percent) in 2012 YTD alone.

If you are the CEO of GE and Obama’s schmoozer-in-chief, your salary, bonuses and investment income is taxed as personal income.  There’s a good bet the CEO of GE paid little or no taxes on millions of dollars in income, certainly not at the same rate myself or other small business people paid.  His company, GE paid no taxes in 2011.  GE’s income was offset by losses, subsidies, tax breaks and expenses, claims I would wager could easily be overturned and taxes, interest and penalties would be significant.  The problem is GE has always had their hand in the government’s pocket.  There’s no secret there’s a love fest going on today between the Obama administration and GE.

What the Obama administration doesn’t want you to know about small business tax rates, is we pay taxes on ordinary income both on our salaries and on the money our business makes.  As a rule of thumb, a small business owner will take one-half (1/2) of their income as salary and they will reinvest the other one-half (½) of their small business income back into their business.  The small business investment I’m talking about isn’t about capital investments in equipment, furniture and other fixed assets.  The investment I’m talking about is in operating income, including people, sales and marketing, accounts receivable which is the fuel the economy needs to grow.  Operating income comes from small business revenues taxed as ordinary income.

In fact, even large corporations in America pay much higher corporate tax rates than most other countries.  Our higher corporate tax rates are supported by the Obama Administration.   A Romney administration would propose to lower corporate tax rates to be more competitive with other countries we compete with for business.  The irony is Obama touts green energy and competing for high tech business but he will do nothing to lower the unfair advantage international competition has because their tax rates are much lower.

Here are the facts…

On taxes, President Barack Obama wants to raise “the top rate to 44.8 percent.”

http://www.politifact.com/truth-o-meter/statements/2011/may/18/paul-ryan/paul-ryan-says-barack-obama-wants-top-tax-rate-448/

Here’s a potential solution – Fairtax

FairTax - FairTax.org

If I Could Write You a Song



If I could write you a song,
I’d be asking you to sing along.
Lyrics without the music,
They just don’t belong.
Like this plane I’m sitting on.
Going nowhere, I’ve always been,
Into the setting sun, away from you,
Away from you.
 
If I could write you a song,
There’s no now, there’s no then,
My life’s not taking off.
There’s no place I’m landing soon,
So much for life’s baggage when,
I can’t even carry a tune.
No place I’m going soon.
 
If I could write you a song,
The music would be all wrong.
In this lonely hotel room.
Trying to forget, drinking wine.
Thin walls, thin lives, keeping time.
Keeping me away from you.
I need to be moving on.
Always away from you.
 
If I could write you a song,
The lyrics would be too long.
City streets, no place to turn around.
Can’t keep these feet on the ground.
In time, it’s always back to you.
If I could write what’s wrong,
This song would never end.
I’d be on my way back to you,
Back to you…
 
++
Saturday, August 18, 2012

Paul Ryan VP Full Acceptance Speech, “If You Have a Small Business, You Did Build That!” Full YouTube Video and Text

File:Paul Ryan, official portrait, 112th Congress.jpgPaul Ryan VP Full Acceptance Speech, “If You Have a Small Business, You Did Build That!”

http://www.youtube.com/watch?v=QrRBXKgAxSs

Congressman Paul Ryan today delivered the following remarks in Norfolk, Virginia after Mitt Romney selected him to be his Vice Presidential running mate:

Thank you Governor Romney, Ann. I am deeply honored and excited to join you as your running mate.

Mitt Romney is a leader with the skills, the background and the character that our country needs at a crucial time in its history. Following four years of failed leadership, the hopes of our country, which have inspired the world, are growing dim; and they need someone to revive them. Governor Romney is the man for this moment; and he and I share one commitment: we will restore the dreams and greatness of this country.

I want you to meet my family. My wife Janna, our daughter Liza, and our sons, Charlie and Sam.

I am surrounded by the people I love, and I have been asked by Governor Romney to serve the country I love.

Janesville, Wisconsin is where I was born and raised, and I never really left it. It’s our home now.

For the last 14 years, I have proudly represented Wisconsin in Congress. There, I have focused on solving the problems that confront our country, and turning ideas into action; and action into solutions.

I am committed, in heart and mind, to putting that experience to work in a Romney Administration. This is a crucial moment in the life of our nation; and it is absolutely vital that we select the right man to lead America back to prosperity and greatness.

That man is standing next to me. His name is Mitt Romney. And he will be the next president of the United States

My dad died when I was young. He was a good and decent man. I still remember a couple of things he would say that have really stuck with me. “Son you are either part of the problem or part of the solution.”

Regrettably, President Obama has become part of the problem,…and Mitt Romney is the solution.

The other thing my dad would say is that every generation of Americans leaves their children better off. That’s the American legacy.

Sadly, for the first time in our history, we are on a path which will undo that legacy. That is why we need new leadership to become part of the solution – new leadership to restore prosperity, economic growth, and jobs.

It is our duty to save the American Dream for our children, and theirs.

And I believe there is no person in America who is better prepared – because of his experience; because of the principles he holds; and because of his achievements and excellence in so many different arenas – to lead America at this point in its history.

Let me say a word about the man Mitt Romney will replace. No one disputes President Obama inherited a difficult situation. And, in his first 2 years, with his party in complete control of Washington, he passed nearly every item on his agenda. But that didn’t make things better.

In fact, we find ourselves in a nation facing debt, doubt and despair.

Whatever the explanations, whatever the excuses, this is a record of failure.

President Obama, and too many like him in Washington, have refused to make difficult decisions because they are more worried about their next election than they are about the next generation. We might have been able to get away with that before, but not now. We’re in a different, and dangerous, moment. We’re running out of time — and we can’t afford 4 more years of this.

Politicians from both parties have made empty promises which will soon become broken promises–with painful consequences–if we fail to act now.

I represent a part of America that includes inner cities, rural areas, suburbs and factory towns. Over the years I have seen and heard from a lot from families, from those running small businesses, and from people who are in need. But what I have heard lately troubles me the most. There is something different in their voice and in their words. What I hear from them are diminished dreams, lowered expectations, uncertain futures.

I hear some people say that this is just “the new normal.” High unemployment, declining incomes and crushing debt is not a new normal. It’s the result of misguided policies. And next January, our economy will begin a comeback with the Romney Plan for a Stronger Middle Class that will lead to more jobs and more take home pay for working Americans.

America is on the wrong track; but Mitt Romney and I will take the right steps, in the right time, to get us back on the right track!

I believe my record of getting things done in Congress will be a very helpful complement to Governor Romney’s executive and private sector success outside Washington. I have worked closely with Republicans as well as Democrats to advance an agenda of economic growth, fiscal discipline, and job creation.

I’m proud to stand with a man who understands what it takes to foster job creation in our economy, someone who knows from experience, that if you have a small business—you did build that.

At Bain Capital, he launched new businesses and he turned around failing ones – companies like Staples, Bright Horizons and Sports Authority, just to name a few. Mitt Romney created jobs and showed he knows how a free economy works.

At the Olympics, he took a failing enterprise and made it the pride of our entire nation.

As governor of Massachusetts, he worked with Democrats and Republicans to balance budgets with no tax increases, lower unemployment, increase income and improve people’s lives.

In all of these things, Mitt Romney has shown himself to be a man of achievement, excellence and integrity.

Janna and I tell Liza, Charlie and Sam that America is a place where, if you work hard and play by the rules, you can get ahead.

We Americans look at one another’s success with pride, not resentment, because we know, as more Americans work hard, take risks, and succeed, more people will prosper, our communities will benefit, and individual lives will be improved and uplifted.

But America is more than just a place…it’s an idea. It’s the only country founded on an idea. Our rights come from nature and God, not government. We promise equal opportunity, not equal outcomes.

This idea is founded on the principles of liberty, freedom, free enterprise, self-determination and government by consent of the governed.

This idea is under assault. So, we have a critical decision to make as a nation.

We are on an unsustainable path that is robbing America of our freedom and security. It doesn’t have to be this way.

The commitment Mitt Romney and I make to you is this:

We won’t duck the tough issues…we will lead!

We won’t blame others…we will take responsibility!

We won’t replace our founding principles…we will reapply them!

We will honor you, our fellow citizens, by giving you the right and opportunity to make the choice:

We can turn this thing around. Real solutions can be delivered. But, it will take leadership. And the courage to tell you the truth.

Mitt Romney is this kind of leader. I’m excited for what lies ahead and I’m thrilled to be a part of America’s Comeback Team. And together, we will unite America and get this done.

How to Communicate with High-Minded Liberals

Harry Reid

It’s been my experience it is highly doubtful high-minded liberals will listen to you if you have anything to say against this administration and the Democrats.  If they do, they will try to either steamroll you with insults, misdirection and shameful attempts to bring on a guilt trip over a multitude of entitlement issues.

The best advice I have read comes from a Twitter contributor Wayne Dupree.

You can follow Wayne @NewsNinja2012.  I’m not endorsing Wayne, only applauding sound advice.  I could learn from him. 

From Wayne:

When speaking w/liberals, be calm and always remember. Democrats Shift the subject, Ignore the facts, and if that doesn’t work, they begin name calling.

Wayne Dupree

Another suggestion is to do the math and deal with the facts.  

Too often conservatives, in particular small business people like myself, take liberal bias personally, especially since we have to deal with a barrage of it daily.  If we complain about the media the first thing they do is throw Fox News in your face.  I disagree because Fox News is an hour long program that allows both points of view.  I would agree O’Reilly, Hannity and many other programs are biased, but no more than NBC, ABC, CBS MSNBC and CNN for their liberal bias.  I watch news and political broadcast on all the above mentioned networks, that way I feel I am being fair and balanced listening to many points of view.  Sometimes it’s best to watch a sitcom and lately I have taken refuse in watching the Olympics.

A great source fact-finding source is http://PoliticalCalculations.com a Blog that does the math and cites the facts. 

Here are a few good examples:

If you listen to the mainstream media or read the news you would think Obamacare is going to save taxpayers money.  Think again.

The Tax Burden of ObamaCare

If you think the CBO is projecting Obamacare is going to cut the deficit, think again.

Projecting the Personal Cost of ObamaCare

If you think Regulations are not burdensome on the American people, especially small business, think again.  The scary part is Obama is going to wait until after the election to unleash a tsunami of addition regulation.

The Regulation of the American People

Again, if the argument gets personal, take the high road and walk away, stop Blogging, Facebooking or Tweeting with anyone who gets too personal. 

You can’t talk about what you do with your money, how much you pay in taxes and how much you donate to charity.  That’s too personal.  The best you can do is agree-to-disagree. 

Finally, once your discussion or argument’s ended, take some time to reflect and explore the other person’s point of view.

Maybe you can learn something new.  Maybe the other person had a valid point or argument.  Maybe your counterpart will have learned something, too.   Highly unlikely, to be honest, but then you can always find solace after November 6th, 2012.

 

Grow business, not bureaucracy, to help our country prosper

Published by The Orlando Sentinel August 2, 2012 by Bill Herrle | Guest Columnist

It is always an honor to have the president of the United States visit our state. But as he journeys to Florida today to seek our vote, he can expect some hard questions.

Four years ago, then-candidate Barack Obama made a lot of promises. He told us he had the skills and the plan to end the economic downturn that was gripping our country.

With his first term coming to an end and with President Obama asking for re-election, it is worth reviewing how he has lived up to his promises. The president has given us his own review of his performance. Recently at a campaign event, he said of his approach to the economy, “It worked.” But has it?

In Florida, we are facing record foreclosures and an unemployment rate of 8.6 percent, even worse than the national average of 8.2 percent.

Obama told us his stimulus would have unemployment below 6 percent by this year.

Last week, the White House lowered its GDP estimate for the year following a dismal growth rate of only 1.5 percent for the second quarter, down sharply from the already poor 2 percent growth rate of the first quarter.

But why did this happen? Why has the president been so unsuccessful? It’s because he puts his faith in the government — instead of the people — to get our economy back on track.

Recently, at a Roanoke campaign event the president said, “If you’ve got a business, you didn’t build that. Somebody else made that happen.” It was a statement that caught fire around the country, and as business owners spoke out in outrage, the Obama campaign countered the words were taken out of context. Here’s the context:

“If you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hard-working people out there.

“If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen.”

These words — and more important, the policies behind them — outline the president’s belief that putting faith in government instead of the hard-working men and women of this great nation, is the key to getting our economy back on track. The president believes that if we are to recover from this economic downturn, the government must lead the way.

It’s for that reason that his entire approach to addressing the recession was government based. Obama wasn’t interested in helping the private sector — according to him, you might remember, the private sector is “doing fine.” His main concern was to grow the government. He has done so with aplomb, presiding over four years of trillion-dollar deficits. But the economic recovery he promised has not followed.

Government can do a lot of good, and it can support the growth of the economy. But it can never replace the contributions of American entrepreneurs. It can never replace the story of the American dream that is lived day-by-day by large and small business owners and their employees across Florida and across the nation.

When government forgets its place and our leaders decide that growing the bureaucracy instead of putting our faith in the people is the key to prosperity, we see results like we have had these past few years.

More regulations and higher taxes don’t help business, and they won’t lead to a recovery. As Obama visits Orlando today, we invite him to come meet those of us who know something about how jobs are created and how they are lost.

Then he might learn that government didn’t build this country’s prosperity — her people built it.

Bill Herrle is the executive director of the National Federation of Independent Business/Florida.

 

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