September 22, 2008

Voter Education for Liberals Volume 3

GuyK has been trying to make this point for a long time. He knows the truth because he used to be a business owner. I am going to give it a try and I hope I can convince at least one of you that taxing businesses is a socialist and idiotic plan. Businesses do not pay taxes.

The role of a business is NOT to provide jobs. That is a fundamental understanding you must possess. Let me repeat that. The role of business is NOT to create jobs. The role of a business is to make money. A business that does not make money for its owners will not be in business long. You should look with a sceptical eye when a Presidential candidate says he is going to create jobs. If the business that employs those workers cannot make money, there will be no jobs.

The Government, and I mean the Local, the State, and Federal Governments, only provide jobs and pay public workers by taking money from all workers and redistributing it. The Government does not make a product, sell a product or generate profit. It gets its money through taxes. It takes our money. Patriotism has nothing to do with it. If you are one of those people who thinks your new local park, road, Government Building was free because the Federal Government paid for it, you are an idiot. You paid for it, I paid for it, people in Arkansas and Indiana and Ohio paid for it. All of those roads, buildings and bridges in West Virginia -- Robert Byrd did not provide them. Your money -- taken from the wages due you -- paid for them.

The Obama says he is going to cut your taxes. Good, at least he understands reduced taxes is a good thing. Too bad he is going to make up the difference by taxing businesses. Get ready to pay more for everything you buy. Get ready to see more businesses and manufacturing plants move to Mexico and China and Indonesia and Vietnam. What? How is this possible? Well those of us who are not smelly hippies understand cause and effect, but what the heck. I will try to explain it in simple terms.

Let us say you own a business. If it makes you more comfortable it can be a commune or a small company that makes environmentally-friendly organic tiny little vases that allows you to keep fresh flowers in your hair when you visit San Francisco. You decide that it costs you a certain amount to buy the raw materials. It costs you to hire workers. You need to pay for office and manufacturing space. You need to pay for advertising and marketing. Even 'green' packaging has a cost. Electricity and solar panels and wind power have to be purchased and maintained. . If you take all of the items I outlined and add them together you have COST. Hopefully you sell your little hippy vases for more than cost. You might want to actually make a little money yourself. This is called profit. It is not evil. The difference between selling price and cost is profit. The percentage of cost compared to selling price is called profit margin.

If it costs you ninety cents to make the vases and you sell it for $1.00 you have a ten percent profit margin. If it costs $0.93 to make the vases and you sell them for $1.00 you will have a 7% profit margin. If you sell 1,000 vases you will make $70. If you make $700,000 you will have sold 10,000,000 little hippy flower vases. Your profit margin is still 7%. Your profits increased 999,900%. Your margin remained the same. Did you gouge anyone? Did you have windfall profits? Should we now consider you evil Big Vase? I have probably lost you hippy liberal types here. Look up the profit margin of evil Big Oil after you are done here.

Back to your little, but growing hippy vase manufacturing company. You are cruising along making hot hippy chicks happy because they can put flowers in their hair when they go to San Francisco. Suddenly, you get a bill in the mail from the Government. You owe TAXES. These include payroll taxes, permit fees, waste fees, property taxes, warehouse taxes, income taxes, etc. etc. You divide the taxes you owe by the number of hippy vases you make and discover the taxes equal $0.10 for every vase you make. You are only making $0.07 per vase, so the extra ten cents means you will lose three cents for every hippy vase you sell after you pay the taxes. If you sell 10,000,000 vases you will lose $300,000! Your only recourse is to raise prices. To keep the same 7% profit you made last year (and you really wanted to make a little more to get that new hybrid car)your new price for hippy flower vases is now $1.07 each. Some hot hippy chicks are going to have to pay just a bit more to put fresh flowers in their hair when they go to San Francisco.

Are still with me here, my Liberal Friends? What happens if the Government raises taxes on your business again? That is right, you will have to raise your prices more (please tell me I do not have to go through the math again). Thus, raising taxes on businesses equals higher prices for the consumer -- even hot hippy chicks who just want to put flowers in their hair if they go to San Francisco.

Hey guess what? The business did not really pay the taxes to the Government. The initial .010 per vase was rolled into the selling price and subsequent tax increases were too! Businesses really do not pay taxes.

Now, let us say the tax burden for your little hippy vases gets to a point where the vases cost more than hot hippy chicks are willing to pay to put fresh flowers in their hair if they go to San Francisco. You either go out of business, or find a way to make the vases cheaper. You try lower quality raw materials, you beat up your suppliers, but none of this works. Your costs (including the high taxes put on you by The Obama) are still too high to make a profit. You either close your business (disappointing hot hippy chicks who just want to put flowers in their hair if they go to San Francisco) or you decide to outsource the manufacturing to a place where labor and raw materials are cheaper. You are now one of those evil companies that shipped jobs out of the country -- Mexico or China or Indonesia or Vietnam, for instance. Because of this, The Obama wants to make you pay even higher taxes. You saved the jobs of the accountants, customer service people, shipping and receiving and quality departments, but that does not count. You sent jobs overseas. The Obama says you should pay even higher taxes.

You now take the final step. You become a Conservative and vote accordingly.

Why go through all of that pain? The Obama's plan is not good for the economy and will only result in higher prices and inflation for the same middle class people he wants to help. Thanks Obama.

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