A Tough Decision

I agree with his insight and courage in making difficult choices.

A friend of mine went out to eat with his wife, and in the course of the dinner engaged in conversation with the waitress. Long story short, she supported Obama and agreed with his idea of "spreading the wealth".

Consequently, he told her his 20% tip of $7 would be donated to charity or to a homeless person in his personal effort to spread the wealth, according to HER own belief. Waitress gasped and said her last paycheck was zero because of with-holdings for taxes on tips. He told her that soon, they would be asking her for money on pay day.

What he did was give her $3.50 and will donate the rest, when opportunity presented itself.

Another "change" brought back home, where I believe, it belongs.

Interesting!

There are many business in a holding pattern right now, and I don't blame them.
It's clear the markets have little faith in Barry, and most domestic small business owners have even less.

This is an email forward that's all over the internet. A Google search returned 218 hits. It's amazing how many people claim to have received this exact email from a friend, especially since the friend seems to be in so many different businesses.

Initially, I think your "friend" needs to get a better secretary or sign himself up for a refresher course in basic grammar and writing rules. This "letter" is fraught with elementary mistakes.

However, in light of of other presented information, I'm more likely to think Nippy is correct and this is an email forward. Nice try, though.

Wow, what an idiot! No wonder is business is going into the toilet!

(If this were true, instead of unmitigated horse manure, the employer would undoubtedly be open to lawsuit for wrongful termination. We're not allowed, in this country, to fire on people for not voting the way we wanted them to. But, hey, if he's ready to shut down his business NOW by admitting to it in writing, hey, how missed would his company be?)

Linda, Interesting tale ... with a moral.

Scooter, The "holding pattern" is an accurate description. Let's hope King henry and the P/E send them some signals pretty soon.

Nippy, That's interesting. Maybe my friend is just trying to get some unity among as many small business owners as he can.

St. Joy, Ah, the plight of the small business owner! Between keeping the business afloat and trying to have a personal life, I guess he never got back to night school for those English and literature classes he wanted to take.

Thanks for dropping by.

true or false.....great idea..... in florida you do not have to have a reason to fire someone....

Stephanie, His business is in a conservative Southern state where you can let people go because you don't like the way they part their hair. They don't speak "wrongful termination" down there.

A hundred jobs is a lot in the South. They're not like Detroit where jobs don't mean much unless you can get the government to finance them.

Cheryl, I appreciate your comment. You are right about Florida. That's why they call it the "Sunshine State". As soon as you screw up, you're out in the sunshine.

Maybe it was a friend of a friend of a friend?

Oh, sure, we're not litigious in the South at ALL *rolls eyes*. Even if that were entirely so, Randy, putting this reasoning in WRITING is so stupid, it makes my eyes water.

If you let people go (and if he thinks changing the tax rates are going to force him to lay off people, he needs to start with his accounting department), try those who are the underperformers, K?

CFOs generally don't make the decision as to which employees to lay off. They have some say in how many. People at a lower level make that decision working together with HR.


I realize that this is a gag email.

Some people don't, Nippy.

"I strolled through our parking lot and found 6 Obama bumper stickers on our employees' cars and have decided these folks will be the first to be laid off."

Something seems awfully fishy here. Last I heard, CFOs don't making hiring and firing decisions. This wouldn't happen to be a fake email written to make a point, would it?

"St. Joy, Ah, the plight of the small business owner! Between keeping the business afloat and trying to have a personal life, I guess he never got back to night school for those English and literature classes he wanted to take."

I'm confused. Is this guy the CFO or the owner?

In PA no reason required to fire someone either. Good luck on the "against the law" because my position was "terminated" and I could have proven age and highest salary was the main factor. But why? I don't want to be where someone does not appreciate me and my work, regardless of any other factors. I have better things to do than that.

If all other things are equal, I would do the same thing - if I'd have thought of it.

"This wouldn't happen to be a fake email written to make a point, would it? "
Of course it is.

"I have resigned myself to the fact that Barrack Obama is our next President, and that our taxes and government fees will increase in a BIG way. "
Really. WHICH big way? What kind of business CFO would predict the increase in fees even before Obama takes office and any fees or taxes can be changed and then turn that into some sort of number of employees that he personally would need to select to get the axe? What idiotic business would have only 6 out of 140 employees supporting Obama?


This is just ludicrous. 6 employees making (shall we say $30,000 a year average) would mean $180,000 savings...and this is just the FIRST 6 to go. Since we don't know the reality of the tax increase let's play just suppose for a second....

Just suppose the increase is the "over $250,000" we heard Joe the tax-cheating Liar mention, Mmm-Kay? So after that, there is the marginal tax increase of 3%....from 35 to 38, right? To get to $180,000. That would require income from profit of $6,250,000 for those 140 employees. Now, why they'd need to lay off that first batch of 6 is beyond me...how about a paycut? I mean, we're already talking about (A) Profit and (b) an average of almost $45,000 PER employee without any layoff,s at all. Thats $2,000 average LESS with the 6 lay-offs....

It also does not take into consideration tax deductions, Depreciation, re-investment expenses and costs which can be deducted....

Just some more of the same GOP non-rational bumper-sticker thinking that got that party into the sad, pathetic, sorry state of decay it's in today.

Nothing to see here folks....move along now...pay no attention to the flailing GOP in the corner.

Joseph, I guess he's got a "piece of the action". Being a small business man myself, I know that one's title doesn't always describe all of the jobs one is assigned.

As for something "fishy", I don't believe they are in the seafood business. It's something to do with awnings.

Thanks for your comments and for stopping by.

But Stephanie, the money to pay those taxes has to come from somewhere. What is a small business owner to do?

As a fellow Southerner, I know y'all hear what I'm saying. (For you Yankees, that's singular - y'all y'all is plural)

Yes they do; however, since employees salaries come out of the profit and it's profits that gets taxed, axing employees to pay the increased taxes is dumber'n dirt - just more profit to be taxed.

Your "friend" is unlikely to stay in business if that's the kind of business sense he has. The axed employees are probably better off.

And I'm not from the South; I just live here.

Doyle (aka TMO6F), Good analytical work. First, it has been called to my attention that there may have been some "assisted authorship" in my friend's message. But, if the words expressed his situation, what the heck. His company motto is "Git 'er done!" (I don't think it's original with them.)

Second, I think you'd better take another look at the assumptions in your analysis. You included a 3% marginal tax rate, but what about the cost of employee health care to cover "everybody that doesn't have health insurance"? And then what about the increased cost of materials, supplies, and services from those businesses who have to recover their cost increases and can't eat them like my friend?.

We can't be sure of the assumptions he used, but until the P/E tells him something different, it wouldn't be prudent to plan on only a 3% marginal tax increase to cover the wide range of promises made during the campaign.

Which brings me to the point I made in my post. I'm not criticizing the P/E. His promises are what they are, and the people elected him based on them. But, we have a changing economy, and businesses need to plan for next year. The P/E would help them a great deal if he outlined what he is realistically considering in 2009 so that they can plan for it. Otherwise, the nation's businesses have nothing to go on but campaign promises.

Thanks for taking the time with the analysis. You made your point too.

Stephanie, In our company's cost accounting, we assume that employee salaries are a cost needed to generate the funds to cover overhead and profit. No employees = no profit. The reality is that profits get taxed, payroll gets taxed, machinery and equipment gets taxed, and buildings get taxed.

The price of all of the materials and supplies we have to buy to make products contains the taxes paid by our vendors. So, it isn't just profit that gets taxed.

To stay in business, we have to charge a price that covers all of our costs of doing business, or we don't stay in business. And that brings me to you the customer. The politicians have created a fiction that businesses pay most of the taxes, and most people today believe it.

But, the truth is that the consumer pays all of the taxes in the price of the products they buy. If a majority of the population understood who pays for government and government programs (right now it is estimated at about a 20% "sales tax" on everything we consume), we wouldn't keep electing the same people (of both parties) to the Congress. But, that's a topic for another day.

The only taxes charged against your company are ales taxes (which aren't Obama's venue) and taxes on the company's net profit. Payroll taxes are collected by the employer but the are deducted from the employee's salaries, not the company. If the net profit is so high that there is an appreciable tax difference, axing employees gives you a short term profit (bad for taxes), long term loss (if they were productive which, since they were smart enough to support Obama, they likely were) that would result in more taxes paid in the short term than otherwise.

More likely, since no tax changes are in effect, he laid people off because of the economic downturn which only a complete idiot would think was Obama's fault.

People who believe email forwards would be better off believing in the tooth fairy. That way the rest of us would just feel sorry for you instead of thinking how amazingly stupid someone has to be to buy into that crap.

Its going to get worse before getting better. Despite some's comments above, they forget businesses exist to make money, not to provide jobs. If it comes down to survival of the company due to increased overhead (taxes/mandated wage increases do represent that), then people will lose jobs or companies will not hire.

Kris, Thanks for the kind words ...

Chuck, You nailed it ...

Imagine how silly he would have felt if the 6 people he fired were the ones actually making the awnings.

You had me going until I read the part about "Git r done" being the company motto. Clearly, this is a work of satirical genius. I salute you, sir.

Charles, we don't forget it, that's why we know that cutting the taxes for business or giving them money doesn't make it down to the regular people. All those extra profits go right into the pockets and no one else sees them because companies ARE in it for the money. And regular people, as Randy noted, are where most of the tax money comes from.

The fallacy in the past practices are made clear in a single comment by you, Chuck. Nice job.

Actually, Linda, I agree with that. The notion that businesses get rich socking it to the little guy is a recipe for long term disaster. The most successful businesses long term are those where everyone involved walks away feeling like a winner.

True capitalists, who understand prosperity, don't operate a business in order to put another institution out of business.

They bring products and services to the market in order to serve others. They understand that is in their best interests to serve others. They believe in efficient and effective service. They know that there are limitless opportunities to serve and to create wealth.

They know that through abundance, EVERYONE can win and can have their individual desires satisfied without harming other people.

True capitalism is about excellence, not about destroying competition, although there are certainly many misguided individuals out there who have given capitalism the negative stigma.

The more people who understand this and become true or free capitalists, the easier it becomes for free market businesses to succeed through cooperation.

There is infinite wealth to accessed and utilized by all. The free market has inherent mechanism that tend toward abundance, not scarcity. Abundance creates opportunities; it doesn't destroy them.

Many economists focus on jobs lost to outsourcing and innovation and fail to realize or mention that is it precisely because of innovation that more and better jobs are created than are lost.

If a business fails in a free market it is because customers are being served more efficiently and effectively elsewhere, not that the business somehow "lost". This actually becomes an opportunity for a business to learn how to serve others better, which is exactly how a successful people and business handle temporary failure.

It may be a though lesson to learn, but it is a valuable tool that gives capitalists practice in looking beyond relatively petty concerns and finding higher forms of value creation through service.

http://killingsacredcows.com/

Like-minded friends wrote this book.

Linda,

I certainly respect your opinions. But if only they were true!

"They bring products and services to the market in order to serve others." True capitalism is about excellence, not about destroying competition" "If a business fails in a free market it is because customers are being served more efficiently and effectively elsewhere" Noble ideals, all!

Or they hadn't the monopoly the would have liked on that last one! You and Allan Greenspan have great ideals. Unfortunately, in the world of reality, there are broad discrepancies, and we function in the world of reality, not ideals. A failure of a business closes that business down and any lesson they may have learned is lost by that action.

I believe in capitalism, with good regulation by people who believe in it less than I and believe strongly in good regulation. I don't disagree with you in principle, only in the reality of results!

The reality is most people do not believe in this principle - only see the corporatists and what they have done to give capitalism a bad image. The principle never changes - just interpretation and blame and excuses.

I have nothing in common with Alan Greenspan - his "ideals" contributed hugely to the current financial disaster that taxpayers are expected to "bail out". Now to the tune of $3 Trillion dollars - the $700 Billion was just a carrot on the string.

Regulation (or lack of regulation) is only utilized to benefit the corporatists - not free capitalism, nor those wanting a free market.

Socialists completely misunderstand the nature of a free market. Our beliefs equal our behavior, and our behaviour equals our results, or - Be-Do-Have.

Most people put these in the exact opposite order - Have-Do-Be. These people think that if thy could just HAVE more, then they would DO the right things, and then they would BE who they want to be.

But abundance works in the opposite order - If we want to HAVE more, then we should start by BEING better people; in order to be better, we start DOING better things which leads to having more of what we want.

Or, conversely, if we have wealth, we can be virtually anything we want and do whatever we want with impunity!

Linda,

I'm going to surprise you and agree that most people do not believe in or accept, however you wish to phrase it, the capitalist principle! That is largely because capitalism has been so punitive to the masses for so long it is difficult to believe that more capitalism is going to improve it. Goes clear back into feudal England and King John. As we've gotten away from that religion of unfettered capitalism, the better have been the lives of the average person.

However, capitalism is essential if you want to have innovation, achievement, enterprise, and many other benefits. It just can't be allowed to roam the land unfettered like a wild fire and must be carefully controlled.

Well, to me Capitalism = free market, and it can't be "free" if it's controlled.

They are going to confiscate our 401k's and IRA's shortly, with other restrictions, aka "carefully controlled".

Just found this today - we are controlled and manipulated in everything we do.

Squawkbox spills the beans about the President's Plunge Protection team on live TV.

There was a revealing and unintended event on Squawk Box this morning around 7:30 AM, when one of the live analyst indicated he thought the President's Plunge Protection Team (PPT) was behind the surge in the stock market on October the 10th and 28th.

You could feel the tension among the commentators of CNBC as they tried to cover it up without being obvious. After two minutes of very uncomfortable live TV, the host made a statement claiming that view in no way reflected the views and opinion of CNBC.

The most entertaining thing I have seen on CNBC in quite a while!!!!!! That's the thing about live TV, sometimes the most amazing things slip out - like the truth!

http://www.youtube.com/watch?v=X06kz9dzXho

http://digg.com/business_finance/Plunge_Protection_Team_discussed_on_CNBC

Here on Dec. 12th, this rings truer than ever, Randy! It seems like Obama supporters are taking a hit, all around. It looks as if Obama has ended his honeymoon before he takes office, which might be a record.

One would think that there is constitutional protection from getting fired for one's political beliefs, but it's not covered to the same degree as race, gender, or even religion, in the private sector. Political bias has no place in the workplace, if an employer wants a productive workplace.