Obama's Epic Failures

[mrgybe]

Taxes may not be a big deal to rapidly growing high tech start ups. Most of them don't turn a profit for years, if at all. When they do become profitable, taxes become very important as Apple, Google and others have clearly shown by their intense focus in that area. However, the real project money is spent by large, established companies. Who spends the most project money in the US? The oil and gas business. Dwarfs high tech. In a high volume, low margin business taxes are crucial to the economics. Overseas, try telling an oil company considering a project in Nigeria that the 85% Petroleum Tax doesn't loom large in the decision to proceed. Most NFL and MLB stadiums are located where generous tax breaks were given by the locale. Tesla increased production in California only after CA gave them large tax breaks. New York State is flooding the airwaves on this coast with the promise that start ups in New York State will pay no taxes for the first 10 years............and on and on. All these ventures create massive employment........if they proceed. So to suggest that taxes have no impact on employment is, well, you remember.

Incidentally, a lower cost of living outside of CA is driven, in part, by lower taxes. As for uncertainty, we'll agree to disagree. I'm guessing, however, that the Transcanada experience isn't encouraging other foreign businesses to invest in the US.

[boggsman1]

I will admit , my geographical location for the past 25 years, plus the business that I'm in makes me biased to high tech. But, this is no small segment. The Bay Area is home to 9% (44) of the fortune 500 companies, $3TR of market value, so a large percent of the US economy, and the fastest growing segment for the past 25 years. My main argument is that it is foolish to suggest that the current lack of fiscal plan, and uncertainty in tax policy is a major input of the lack of hiring. We always have tons of uncertainty in DC, and little has changed in the past 30 years. We had cap gains in 1998, we had divs, and depreciation in the 2000's, but thats about it.

[coboardhead]

I will admit that compared to either of you guys, I am a business neophyte. That said, at 55, I am seriously considering starting a new business (hell, just bought the real estate so I guess i am beyond consideration!). It will involve the RISK of hiring and training employees. This risk is not insubstantial and higher net return (after taxes) is paramount. While I do not really need the income...I do not need the losses either! Taxes matter when it comes to decisions by little guys like me!

[mrgybe]

Good for you! I'll drop you a brief PM with a couple of thoughts you which might find helpful.........or which you can use to prop a wobbly table. Good luck.

[keycocker]

Income tax is an overhead cost .
Taxes do matter, but they are unlikely to be the central factor in your hiring and firing.
If you have more demand for your goods and services than your employees can supply, you will need to hire.

If your taxes go down will you hire guys you don't need?
This is the contention of Gybe and Talk Radio.

The businesses in America did not fire people when taxes went up or hire them when they went down. The employment rate has slowly recovered jobs as consumer demand returned, despite higher taxes.
Your biz will work the same way.

[mrgybe]

Let me attempt to explain this again more slowly. A well run company will have a benchmark rate of return it requires to enter into a project. If the economics do not meet the threshold, they will not do the project. Taxes can play a significant role in that determination. A simple example.........a few years ago, a number of DC area businessmen formed a group to bring a major league baseball team back to DC. Before they would build a stadium, they sought large tax breaks which they obtained. If they had not obtained those tax breaks, the stadium would not have been built. Large numbers of construction jobs and stadium staff jobs were a direct result of those tax concessions. Similar stories are repeated daily all over the world. As I indicated previously, Tesla hired people to ramp up production as a direct result of tax concessions given by CA. And on and on. Of course there are other significant factors also at play in decision making, but there is no question that tax policy is key in persuading investors to enter into ventures that directly result in job creation. To suggest otherwise etc, etc..........

[keycocker]

I was in my favorite gas station this morning. They pump the gas and wash your windshield. The owner is pretty far right .very angry because he says his taxes went up lately and that will cause soaring unemployment, needs help but can't hire until taxes come down...same talking points as Gybe.
I wondered how a guy like that can stay in business.
Saw that he has two attendants now. Line moved much quicker so I will shop more there for gas.
I took the time to chat in the office and asked why he hired another guy..
He said biz was good and he was losing customers because of the long line to fill up.
Did your taxes go down so you can hire?
He looked me blankly.and said I told you I needed a guy.

Folks like him and Gybe who live in a bubble of conservative talking points don't seem to let the nonsense they prescribe for others interfere in their own lives.
No matter how full of themselves they are, he still runs his business like a normal person. Gybe runs no business at all, I guess, since he doesn't seem to know when a real businessperson hires employees.

[mrgybe]

You may wish to read my post above before you continue to make yourself look ridiculous. Extrapolating from a small, simple real estate business to a large, complex multinational doesn't work.

[keycocker]

Speaking of looking ridiculous---Ever run a small business?
Your expertise is is vast on all subjects, but biz is clearly hard for you to understand.
In the third world, when we saw guys like Gybe sitting around looking down their noses at locals we figured they were mostly bag men.

If they said they were consultants then we were sure. The Corps bring these guys in to pass out envelopes to corrupt pols and then move them on when the investigations begin.
They think of themselves as daring James Bond types so they will be comfortable working as fall guys.
There are real biz consultants out there of course, but they knew the connection between demand for goods and hiring needs.
Hard to pass biz school if you sleep through that course.

[mac]

I love this kind of hypocrisy from the well to do who call themselves "conservatives." I've met a lot of people who give lip service to markets--and then run from them or manipulate them with political means: