David Spotts said: Scott Wahlin, CGCS said: Kim Brock said: What is the major malfunction of the Right to see that this is necessary?
They claim they need these tax cuts to not hurt the job creators but from what I have seen, these job creators are just sitting on the cash and making current employees work more.they had these cuts for 12 years now. Since they don't have to fight Obamas' election, maybe they will start hiring. Not holding my breath.
It's deeper than that David. It's easy to go after those that make $250,000. You know, the "low hanging fruit" thing. But the biggest reason people and business are hoarding their cash is they don't trust the current administration.
Side note, my intent is not to create an argument.
Back to the topic. These potential tax increases are exhibit A of why the cash is locked in the safe. Most business looks at this administration as reckless and reacting on emotion rather than intellect and good sense.
I will use my own story as an example. My wife and I opened a retail business. We had a very good business plan, pitched the idea to a lender and the lender was on board right away. We had a plan to expand the business to open a dozen locations within 2 years. Each location would employee 4 to 6 staff members, pay payroll tax, pay sales tax, pay rent to landlords, purchase product from distributors who in-turn pay taxes on our purchases, and on and on. However, after just a couple months we started receiving red flags projecting major tax implications and regulations that would devastate our business model. So we waited. We sat on the cash that was available to us. We did not want to extend the capital with the knowledge that the government would regulate and tax us out of business. Fast forward 3.5 years to today. The regulations and taxes are now upon us. We still only have one location. We had to dump more money into this one location to keep the doors open and we are holding on by a string. We have completely revamped our business model to fit this one store as opening more locations would be more trouble than it is worth. As such, we did lay off staff, we will not hire staff for the other planned locations, our sales are down, our margins are down, and our cost of goods sold is up. Business 101 tells us this is a failing formula, all of which came as a result of our government. We hope to have the new business model operational by the first of the year so we can rescue this one location. We think we can resuscitate the business but if the government rears its ugly head again, we're tapping out. All our staff will be unemployed, we will no longer pay payroll taxes, we will no longer pay sales tax, the business will have to file for bankruptcy, the business will default on loans, the business will default on leases, etc. You get the idea. We had a young thriving business that employed staff and paid a lot of taxes and was a contributor to the economy. Now we are on the verge of a losing it all and become a drag on the economy. And all as a result of this administrations decisions. This is but one story of why business is not willing to take a chance with their capital.