Some business concepts to think about
By Robert Barnes
As a small business owner for the past 30 years and as part of my corporation, I would like to address some business concepts that could perhaps help others in these difficult days. My thoughts are in response to Don Hinkle’s column concerning a Christian worldview of economics, a column with which I agreed.
No. 1. Every business has a tax liability at the end of their year on their net profits. When I close my books at the end of my year, I must reconcile all facets of my business activities and pay income taxes on this profit. This tax is not a tax deductible item. Every business pays taxes on profits unless they loose money. The idea a business pays no taxes is a misstatement and is misleading.
No. 2. Businesses collect sales taxes, Medicare taxes, FICA taxes and income taxes from their employees and monthly sends this money to the state and federal government along with estimated income taxes and their part of some of these other taxes. The employer part of Med/taxes and FICA is tax deductible. That is all. Nothing else unless he has some tax credits.
No. 3. The excessive bonuses paid to executives should be subject to income taxes. For a select group of employees to be granted tax dodges to avoid paying taxes like ordinary folk has gone on too long and is not American! For an executive to be paid a bonus while his business is loosing money is corrupt!
No. 4. These people are not owners. They are a higher class of employee but they are no different than the rest of the workers, therefore no special privileges should be granted to them by the companies or government.
No. 5. We have traveled all over the United States, all 50 states, and viewed huge homes built by the kingpins of old who before President Franklin Roosevelt paid no taxes whatsoever. They took this money and formed huge companies and kept everyone else out therefore the consumers were cheated daily. They had no responsibilities toward their workers whatsoever. I grew up in a company town. I know how people were treated up until Roosevelt came into power. Remember the wealthy people wanted nothing to do with him after he did this and he put a stop to all the abuses done to us in these times. Remember there was no Social Security until Roosevelt. By the way, a teacher is covered by a completely different retirement system. I know because I am married to one so his understanding is a little skewed there.
No. 6. When companies become too greedy which has happened in the last 40 years and price their merchandise way above what it is worth companies in other countries took note and brought their wares here. This was brought on by several things – executive greed and employee greed which in turn causes companies to no longer be competitive in the world market. Nothing wrong with this. We have done this to other countries for years.
No. 7. I find it interesting when politicians make disclosures regarding their income the paltry amount based on their incomes given to charities proves to me the other bigshots are not doing their part as well. I personally have always thought wealth brings a responsibility to our fellow man and society, but I guess this isn’t the case.
No. 8. I certainly do not agree with his statement and concepts of trickle down economics. While it sounds nice I suppose people being greedy with the money have built elaborate homes and have the finest of everything. Instead of these huge salaries paid out companies and boards should have been reinvesting this money in their companies in order to compete and survive.
In addition I do not condone these non-owners, or owners really for that matter, taking excess profits and buying or consuming far more than what is the norm for the population of our country. This is exactly the thinking and what happened to us before the great depression. We are seeing more and more an attitude of these people ignoring the plight of people in our midst.
Hinkle’s thoughts regarding what has happened to the American household is right on target. For years we have saved no money thinking a rainy day would never come. People bought way over their heads and things they didn’t need including high priced cars, higher priced homes and other luxury items which have ate up our precious resources. Now we are having to pay up!
We have many examples of companies now going broke; companies who rode the same concept of managing their money and now things are tight but they have no cash saved in reserve. As they have in most cases, they have squandered it with excess pay to both executives and workers or wasted it on jet airplanes and such luxuries or doodads not needed.
Now we are at a time in our history when extreme sacrifice will be needed by every one to keep our country the country it is. Many companies and individuals will not be up to this challenge. I foresee our population after this is over becoming savers and no longer will be trying to one up one another. Frankly this will be good for us as a country.
I would suggest that anyone who has read a little on business theory, either buy or create a business and actually operate it with his cash money in order to get a more clear understanding of what it takes to run a business. It is not as easy as reading a book.
As my pastor says, don’t believe what you are told, go look it up. So those who are misinformed go talk to a business owner and get your history books out to see what went on prior to our Great Depression. You will wonder how our population put up with what was done to them for so long! As you study our financial history you will also question why our government and companies have allowed themselves to become so bankrupt financially as well as morally. (Robert Barnes lives in Auxvasse and has been in business 60 years.)