Thursday, October 18, 2012

What A Gaston County Main St. Business Wants From Politicians


Dear Professional Politician

I am an American Business Owner. My size makes me Main St. and not Wall St.  Corporate America is organized by public funding and lately government bail-out funds as safety nets. They try and squeeze the last penny out of every product and service they offer. They are in many communities and sometimes act as if they are not part of any community.

I use creativity, innovation and private funding. I have the courage and determination to take risks. I am local and I live in the community. I am not likely to pollute my own air, water or land. My employees live here also. That means they wouldn’t do those things if I asked. Also because they are local I live with them, shop with them, worship with them ie.. they are my neighbors. How could I mistreat my neighbors and live in the community?

Democrat, Republican or Independent you give lip service to our being the solution to economic problems but your actions don’t ring true. They convince us you do not know what we need. We have lost value on our balance sheets, we have been forced into lay-offs and generally we are or feel poorer today than yesterday. Yet you expect us to create jobs or invest in our business when almost every government action shakes our confidence in the future to the core.

So while no one elected or selected me as spokesman I am still going to tell you what we need. Start by taking the time to listen to us. Listening to my clients is the only way I can do business with them. Further, we don’t want a bail-out, the impact of regulation makes doing business more costly every day, and Government actions currently cause our profit margins to be squeezed. We need a full scale review and rework of the maze of well intentioned but wrongly executed Regulations enforced by Regulators without the experience or background to understand the unintended consequences of ignoring the Value Equation of Business, Value =Price + Quality. Price has been removed. We have only Value = Quality. Frankly it is beyond most budgets, including the Governments, to always use this concept. At some point the benefit is diminishing in regards to its cost.

Start here. I am sure more will come up when you talk to us.

Samuel J. Fleeman, Jr.

Monday, October 1, 2012

Gaston County Median Income Falls


Gaston County households earned less money last year than they did 30 years ago, based on median household income adjusted for inflation. Gaston Gazette Sunday September 29th, 2012.

Now a lot of people want to do a postmortem and try and pin blame of people or parties or institutions. The President, Congress, Obama, Clinton, Bush, Liberals, Conservatives, Free Traders, Outsourcers or take your pick are all thrown into the Blame Pot.

Looking backwards rarely gets you where you want to go. We know where we have been what we want is something better! So let’s look forward to January 1st, 2013 and see if these new five new or higher taxes of the twenty new or higher taxes from Washington on Health Care are going to help or hurt businesses and families.

Medical Device Tax – a $20 billion tax increase: Medical device manufacturers employ 409,000 people in 12,000 plants across the country. Healthcare imposes a new 2.3 percent excise tax on gross sales – even if the company does not earn a profit in a given year. In addition to killing small business jobs and impacting research and development budgets, this will increase the cost of your health care – making everything from pacemakers to prosthetics more expensive.

 “Special Needs Kids Tax” – a $13 billion tax increase: The 30-35 million Americans who use a Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will face a new government cap of $2,500 (currently the accounts are unlimited under federal law, though employers are allowed to set a cap).

There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are several million families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Healthcare tax provision will limit the options available to these families.

 Surtax on Investment Income – a $123 billion tax increase: This is a new, 3.8 percentage point surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income:

Capital Gains
Dividends
Other*
2012
15%
15%
35%
2013+ (current law)
23.8%
43.4%
43.4%

The table above also incorporates the scheduled hike in the capital gains rate from 15 to 20 percent, and the scheduled hike in dividends rate from 15 to 39.6 percent.

 Medical Itemized Deductions – a $15.2 billion tax increase: Currently, Americans facing high medical expenses are allowed a deduction to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). This tax increase imposes a threshold of 10 percent of AGI. By limiting this deduction,  the net widens to capture taxable income for the sickest Americans. This tax provision will most harm near retirees and those with modest incomes but high medical bills.

 Medicare Payroll Tax Hike -- an $86.8 billion tax increase: The Medicare payroll tax is currently 2.9 percent on all wages and self-employment profits. Under this tax hike, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8 percent rate instead. This is a direct marginal income tax hike on small business owners, who are liable for self-employment tax in most cases. The table below compares current law vs. the Medicare Payroll Tax Hike:

First $200,000
($250,000 Married)
Employer/Employee
All Remaining Wages
Employer/Employee
Current Law
1.45%/1.45%
2.9% self-employed
1.45%/1.45%
2.9% self-employed
 Tax Hike
1.45%/1.45%
2.9% self-employed
1.45%/2.35%
3.8% self-employed

 

These do not seem to be taxes only on the rich. Higher taxes at a time of lower median income will hurt families. Business taxes are a cost of doing business and passed onto consumers. Money paid directly or indirectly in taxes cannot go to food, clothes, housing, education, medical, etc… The less purchases made the less is made and the less made means fewer jobs and the cycle repeats.

These taxes come from Washington and no one from the President, to the House to the Senate is working to help! These numbers do not reflect any State, County or City level taxes such as rising Property Taxes on lower Property Values.

We cannot tax ourselves to prosperity and regardless of the social value of government programs. They are not sustainable “as is”. Change is coming and the question is whether we control those changes to create sustainable value in tax funded programs or like lemmings follow others off the cliff. Red, Blue, Liberal, Progressive, Conservative, Democrat or Republican is anybody listening or frankly anybody care?