Monday, October 15, 2012

What Happens When We Punish Businesses?

What happens when we overtax businesses?

First, think of a business like you would your household. This might help. You have things you can afford and then you have necessities. The only thing is when your taxes and incidentals go up you can't fire yourself, your spouse, and/or your children. 

Rent or Mortgage – a must have
Taxes – can’t get away from them
Utilities – another must have, such as phone service, electricity, internet or intranet, water, gas.
Incidentals - Furniture, air conditioning, heating.
Insurance – required by law, but businesses require a lot of insurance. Health insurance, property insurance, unemployment insurance, liability insurance, disability insurance, workmen’s compensation insurance.
Business supplies including products needed to sell or for production.

Now these are just the basics they have to meet to stay open. They can all be quite expensive. On top of these expenses they have to hire employees. So, as the economy in the US goes down sales go down. As sales go down profit goes down. What does not go down? That would be rent and/or mortgage, most likely, taxes, because they are on the increase, and insurance premiums. They also, since the economy is going down will most likely have to start paying more for supplies since cost of materials are rising.

Now, salaries have to be paid to employees because not one business I know of has people that go to work just for fun and say, “Nah, please don’t pay me. Just working here is reward enough.”

If demand for products or services is on a decline and taxes and other incidentals are going up what can a business cut from the budget to stay afloat? It can’t cut out the mortgage payments. It has to pay the taxes. Utilities can be reduced, maybe, but they can’t be cut. Insurance is required by law, so they can’t cut that out either. The only thing they can cut out is the amount of employees that they hire. On top of this they may even have to cut out rewards programs that employees were receiving before taxes were increased because profits are declining.

With the layoffs we also increase the unemployment status in the US, which is high already. Yes, the unemployment status went down slightly recently, but that is because some businesses are hiring for the holiday season. Look for the numbers to go right back up again after the holidays.

The bottom line is that businesses will not and cannot stay open without making a profit, just like a household cannot go on without an income. A profitable business will hire more people making the unemployment rates go down instead of up. More people will be able to keep their homes and food on their tables.
It’s sad when you hear that a business laid off people to rehire only part-time employees just so they don’t have to pay the added taxes set down by the government or the required increase in insurance benefits from the present administration. What happens to these employees besides just a cut in pay? They have to make sacrifices in their homes and make cuts as well, such as not spending as much and increasing the decline in American business. They also will now be required to find affordable insurance or pay a tax. Why? We have overtaxed our businesses, who are also the employers in this nation.

It’s nice to think that no matter what we do we can be rewarded, but that’s not even realistic. Realism comes when you stop to consider that without viable, healthy businesses this country is screwed. We only add to our increasing debt problems.

So, hate those that are touting giving breaks to businesses, but stop and think for just a minute about why it’s necessary, because right now small to moderate businesses are suffering over the increased taxes and requirements being set down by our government. If this continues you will be seeing a lot more empty buildings and a lot more people pounding the pavement hoping that somewhere there is work so that they can have a roof over their head and food in their bellies. Believe me, with the increased level of debt that this country is accruing daily welfare that we so easily take for granted may not be revamped or revised but just out and out broken because even our government won’t be able to pay and provide for the needy.

Building businesses in the country will build the economy in this country. Taxation is not the answer – it is actually one of the problems. The only cure to our increasing debt is to quit unnecessary spending.

This is why so many people are voting Republican, because when Obama gets back into office we can expect further decline in our economy, a lot more layoffs, and a lot more people needing government assistance. I don't want to vote Republican, but I live in Wisconsin, a swing state. I wanted to vote for Gary Johnson and for my principles. I don't feel I have a choice, because realistically I have to vote for one of two parties instead. This has become the American way. So, here is another vote for Romney/Ryan.

Oh, and that cheap insurance you think you'll have? Just wait, because I think you are going to find it costs a lot more than what you were promised. 

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