If Obama is re-elected, you'll be fired, CEO tells workers

[Tim]

He stated he and his business for a tax increase.

You seriously do not understand how increasing taxes reduces the workforce?
Taxes are an expense ,its an overhead just like other expenses.
The more expenses you have going out the less you have to reinvest back in the business to grow.
Also..due to the added expense one has to charge more for their goods or service which in effect reduces the sales for these goods or services...which means layoff or firing of staff.
You get hit both ways with an increase of taxes.

Ok, so what you are saying is that you don't understand business either. Fine, let me explain it to you...

Taxes are an expense ,its an overhead just like other expenses.

No they are not and let me explain why.

If you own a business and you have $100,000 profit at the end of the year and you take all $100,000 out of the company then you must pay federal taxes on that $100,000.
If you own a business and you have $100,000 profit at the end of the year and you reinvest $50,000 back into the company and only take out $50,000 then you only pay taxes on that $50,000.
You are not taxed on the money you reinvest back into your company, you only pay taxes on the profit. Profit is what you take OUT of the company at the end of the year so that money does absolutely NOTHING to help grow the business. It is this money that these guys are worried about. NOT what is invested back into the company in infrastructure and payroll.

 

[The Man]

Ok, so what you are saying is that you don't understand business either. Fine, let me explain it to you...



No they are not and let me explain why.

If you own a business and you have $100,000 profit at the end of the year and you take all $100,000 out of the company then you must pay federal taxes on that $100,000.
If you own a business and you have $100,000 profit at the end of the year and you reinvest $50,000 back into the company and only take out $50,000 then you only pay taxes on that $50,000.
You are not taxed on the money you reinvest back into your company, you only pay taxes on the profit. Profit is what you take OUT of the company at the end of the year so that money does absolutely NOTHING to help grow the business. It is this money that these guys are worried about. NOT what is invested back into the company in infrastructure and payroll.

Let me put it to you simply.
All money put back in the company isnt tax free
You cant put in money you dont have.....{money that is gone due to tax}

Taxes are an overhead expense and reduce profits.
The price of a good or service goes up due to the addition overhead.
Thus reduces goods or services supplied...equals less employees needed.

This is just one company in the example...the same happens to the others.
Now with this increased price for all corps that people use...everything is higher.
Which compounds the problem of people having extra funds to buy your goods or service.{from you}

As we can see not only what effects him directly also effects him indirectly as people will have less funds to begin with.
You may want to operate a business to see that a minor shift in the economy greatly reduces the frequency the phone rings.

 

[Stone]

Ok, so what you are saying is that you don't understand business either. Fine, let me explain it to you...



No they are not and let me explain why.

If you own a business and you have $100,000 profit at the end of the year and you take all $100,000 out of the company then you must pay federal taxes on that $100,000.
If you own a business and you have $100,000 profit at the end of the year and you reinvest $50,000 back into the company and only take out $50,000 then you only pay taxes on that $50,000.
You are not taxed on the money you reinvest back into your company, you only pay taxes on the profit. Profit is what you take OUT of the company at the end of the year so that money does absolutely NOTHING to help grow the business. It is this money that these guys are worried about. NOT what is invested back into the company in infrastructure and payroll.

Incredible....surely you don't really believe all of that?

The issue of excessive taxation is the return on investment is reduced and that dynamic determines several outcomes.
It can raise prices of product/services to off set loss.....if competition also does the same. This is an element of inflation.....labor demanding parity for those increases is another element of inflation from this action.
It can lower cost of overhead by reorganization that includes lessening of the workforce.
It can do both.
The business can even fail.

Stock the company owns is often collateral used for bank loans while a portion of profits from existing endeavors pay down those loans for expansion, research and development, even daily operations.
So, stock price being a reflection of profitability ( present and speculative future ) most certainly affects the corporate business model and it ability to adjust to/leverage market conditions. It influences the company's ability to invest in it's future.

The issue taken to the small business owner......is even more direct.....his personal survival depends upon what is left after taxation of the profits he generated.


The Man posted:

Taxes are an expense ,its an overhead just like other expenses.

To the stock holder and small business man, of course they are......to them, taxation is part of the business model and their success depends upon there being an equitable return.......and this is where the argument is......'equitable' is highly subjective. But neither failure (edit: by design ) nor hoarding of wealth are equitable.


carry on

 

[Minor Axis]

Let me put it to you simply.
All money put back in the company isnt tax free
You cant put in money you dont have.....{money that is gone due to tax}

Whatever point you are trying to make does not seem to match Tim's point. If you don't pay taxes on profits that are plowed back into the company, then it is tax free, no? Profits taken out of the company are no longer helping the company, so they can't be viewed as an expense to the company, maybe an expense to the owner or stockholders that lessens their profits. Sound right?

 

[Alien Allen]

Ok, so what you are saying is that you don't understand business either. Fine, let me explain it to you...



No they are not and let me explain why.

If you own a business and you have $100,000 profit at the end of the year and you take all $100,000 out of the company then you must pay federal taxes on that $100,000.
If you own a business and you have $100,000 profit at the end of the year and you reinvest $50,000 back into the company and only take out $50,000 then you only pay taxes on that $50,000.
You are not taxed on the money you reinvest back into your company, you only pay taxes on the profit. Profit is what you take OUT of the company at the end of the year so that money does absolutely NOTHING to help grow the business. It is this money that these guys are worried about. NOT what is invested back into the company in infrastructure and payroll.

Maybe that applies with a C corp but not an S corp

With an S corp you pay the taxes no matter what. Make no difference if you put it back into the company.

 

[Stone]

Whatever point you are trying to make does not seem to match Tim's point. If you don't pay taxes on profits that are plowed back into the company, then it is tax free, no? Profits taken out of the company are no longer helping the company, so they can't be viewed as an expense to the company, maybe an expense to the owner or stockholders that lessens their profits. Sound right?

maybe an expense to the owner or stockholders that lessens their profits. Sound right?

Of course.....but what's missing in Tim's logic is that the corporation is making investments in infrastructure in the 'name of the owners'....... benefits from these improvements are done to/for their financial advantage.
If returns aren't acceptable to the owners, there will likely be restructuring to make it so.
Taxation reduces the distributions to the owners......tax too much, and as I've shown in my previous post, business models and the general economy suffers.

This is obviously The Man's point.

 

[Tim]

Maybe that applies with a C corp but not an S corp

With an S corp you pay the taxes no matter what. Make no difference if you put it back into the company.

There is no way a business this large would ever consider being an S-corporation.

And my argument still stands. He is claiming that because of higher taxes it will jeopardize how much money he will have left for reinvestment and payroll where neither of these matter. These are both pretax expenditures The effective federal tax rate does not restrict how much cash he put's back into his company.

 

[Tim]

Let me put it to you simply.
All money put back in the company isnt tax free
You cant put in money you dont have.....{money that is gone due to tax}

I swear to god you are an idiot... what part do you NOT understand?

The money you invest into your company is NOT subject to federal tax. You are only taxed on the PROFITS, the money taken out of the company.
The money used to pay employees isn't considered a profit to the company, it's considered a business expense, so the company does NOT pay federal tax on that money used for payroll.

Shit, if you can't even understand my first example, then I'm not even going to try to explain anymore...

 

[Tim]

This is obviously The Man's point.

:24: You put way too much faith in this guys intellectual capacity. Go back and read his reply again. He CLEARLY can't follow along in the conversation.

Taxes are an overhead expense and reduce profits.

Yeah he understands :24:

 

[Stone]

:24: You put way too much faith in this guys intellectual capacity. Go back and read his reply again. He CLEARLY can't follow along in the conversation.



Yeah he understands :24:

The errors he has made don't provide support for the gross errors you've posted.
His main points are logical.......from a business perspective, taxation is a reduction of financial strengths and business models are addressed to accommodate the tax 'overhead' that affects both the corporations and the owners.
Your magic act of pulling wealth out of corporate America and it's owners through taxation with out possible downside is ludicrous.



BTW......you'd be more effective with more subtle ad hominems. Calling someone a fool and posting like one kinda negates your argument

 

[Stone]

There is no way a business this large would ever consider being an S-corporation.

And my argument still stands. He is claiming that because of higher taxes it will jeopardize how much money he will have left for reinvestment and payroll where neither of these matter. These are both pretax expenditures The effective federal tax rate does not restrict how much cash he put's back into his company.

No....your argument has no legs.
When distribution of profit ( by either dividend or stock valuation)is interfered with to unacceptable levels that the investor defines, the investor goes else where. The business model suffers.
Your above argument is a red herring.

 

[Stone]

I swear to god you are an idiot... what part do you NOT understand?

The money you invest into your company is NOT subject to federal tax. You are only taxed on the PROFITS, the money taken out of the company.
The money used to pay employees isn't considered a profit to the company, it's considered a business expense, so the company does NOT pay federal tax on that money used for payroll.

Shit, if you can't even understand my first example, then I'm not even going to try to explain anymore...

I've debated The Man extensively at another debate forum and have gotten used to his logic.
You missed his point.
Sure, corporate profits that are plowed back into it's infrastructure aren't taxed nor payouts on labor.
But distributions are as are market stock sales reflecting increased valuation. That taxation limits reinvestment in business ventures other than the one in question. But, as this occurs market wide, new investors of this company in question have had their own financial strengths reduced by taxation before committing to investing in the company of topic.
Taxation is necessary to pay for governing/protecting/building a society....but at the same time it's also a process of imposing restrictions on the economy of that society.
At some point, taxation becomes a negative, an impediment to economic growth.

Bush cut taxes too low, too long, imo. But Obama wants them back too quickly while adding more.
Both essentially generated tax burdens by legislating staggering debt loads.
I suspect a combination of inflation and taxation will be the result.
Radical change doesn't exactly entice stable, long range business models.

Investment money travels to where it's appreciated the most.
Abuse the investor with excessive taxation and he'll move it, possibly even off shore his investments just as the manufacturing sector seeks out cheaper labor.
It is a global economy.

And all of a sudden the blind are surprised at a wealthy businessman considering closing shop.
Is it a threat? Maybe. I don't know his finances. But he did get a lot of attention.

 

[Tim]

You can kid yourself all you want, TM clearly doesn't realize that operating capital isn't taxed. He clearly believes that this revenue is taxed before being used for wages or reinvestment... which explains his statement

 

[Stone]

You can kid yourself all you want, TM clearly doesn't realize that operating capital isn't taxed. He clearly believes that this revenue is taxed before being used for wages or reinvestment... which explains his statement

And you can try to hide the fact that you aren't addressing the points he does make.

 

[Tim]

You seriously do not understand how increasing taxes reduces the workforce?
Taxes are an expense ,its an overhead just like other expenses.
The more expenses you have going out the less you have to reinvest back in the business to grow.
Also..due to the added expense one has to charge more for their goods or service which in effect reduces the sales for these goods or services...which means layoff or firing of staff.
You get hit both ways with an increase of taxes.

And you can try to hide the fact that you aren't addressing the points he does make.

Please explain this point to me then.

He is NO way talking about the capital that is taxed going to investors who in turn will invest less.
He thinks the tax is an expense on the business which will increase the cost of goods.
Taxes are NEVER figured into the cost of goods. And let me be clear here, we are talking about federal taxes, the ones President Obama is asking to be raised.

A business does not pay taxes on the money used by that business to pay for material or labor. So please explain why he thinks this is so.

 

[Stone]

Please explain this point to me then.

He is NO way talking about the capital that is taxed going to investors who in turn will invest less.
He thinks the tax is an expense on the business which will increase the cost of goods.
Taxes are NEVER figured into the cost of goods. And let me be clear here, we are talking about federal taxes, the ones President Obama is asking to be raised.

A business does not pay taxes on the money used by that business to pay for material or labor. Taxes are NEVER figured into the cost of goods.

He is NO way talking about the capital that is taxed going to investors who in turn will invest less.

I suggest you re-read his posts, because he most certainly did.
http://www.offtopicz.net/showthread...ells-workers&p=2258999&viewfull=1#post2258999

Why is that?
Hard work and investing everything back into the company
He is self made...you may want to do your research rather than chant like an angered OWS groupee
IJS

That means...TM was claiming anything this businessman invested back into his company was taxed. Taxed either when earned or by distribution as a dividend or capital gains sale.
TM presented Siegel as an owner/investor.

He thinks the tax is an expense on the business which will increase the cost of goods.

Of course it is......didn't you read my post on explaining the relationships of taxation/business models and expected distribution of profits?
Any time distributions are taxed beyond acceptable returns to the investor, the business needs to satisfy the investor or lose financial support in the market arena......and as posted, that directly influences the financial strengths and abilities of a business to function and expand in order to meet investors demands.
These are simple concepts.

Taxes are NEVER figured into the cost of goods.

.
Obviously some reading comprehension issues.
It's rather simple.....don't satisfy the investor and you're in a world of hurt as a business.
When increased taxes reduce profit distributions, the loss needs to be made up elsewhere to satisfy the owners/investors......it's often called reorganization. That can include downsizing and/or price increases......even going out of business is a possibility when the business model is crap.

And let me be clear here, we are talking about federal taxes, the ones President Obama is asking to be raised.

Never thought otherwise.

A business does not pay taxes on the money used by that business to pay for material or labor.

You are repeating the obvious that I already agree with.......why?

So please explain why he thinks this is so.

Why the hell do I need to explain other than my own comments when you don't explain you're own comments?


But let's go there any way.

TM posted:

From your first post

The threat

"If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company," he wrote. "Rather than grow this company I will be forced to cut back. This means fewer jobs, less benefits and certainly less opportunity for everyone."


How is this a threat?

It would be no different than saying...if costs go up I am going to have to cut back.

Would you rather have him not let em know...then lay em off later?

He is doing the right thing....he is merely telling them..If Obama gets back in I will have to down size...and some may lose their jobs.

And you followed up with this non sequitur:

Can someone please explain to me how an increase in this guys personal taxes will effect his business?

I love how people will equate a tax increase to not being able to employ more people. The two are NOT connected.

In case no one has pointed out to you.....our economic system is a capitalist model.
You above post is contrary to it.
Confiscation for any reason ...of capital impacts both investor involvement and business models.
How many times do I have to repeat the associations?
You essentially call TM a fool, but you can't grasp the simplest of these issues.

He stated he and his business for a tax increase.

You seriously do not understand how increasing taxes reduces the workforce?
Taxes are an expense ,its an overhead just like other expenses.
The more expenses you have going out the less you have to reinvest back in the business to grow.
Also..due to the added expense one has to charge more for their goods or service which in effect reduces the sales for these goods or services...which means layoff or firing of staff.
You get hit both ways with an increase of taxes.

Taken to extremes as many feel is happening.....TM hit one out of the park with this post.
Sure, he left a lot to be understood, but perhaps he thought he was conferring with people intelligent enough to understand those relationships with out spelling them out in detail?
Go Ask Him.

Taxes are an expense ,its an overhead just like other expenses.

Indeed.......the result is called net profit and that's what dividends distributions to the owners reflect.
http://en.wikipedia.org/wiki/Net_profit
It's ludicrous to believe owners can arbitrarily absorb any and all tax increases on those profits (distributions)with out there being pressure on the company to perform better. And again, for those of weak memories......that relates to possibilities including restructuring that leads to workforce reduction .....and or price increases for goods and services.

 

[The Man]

Can someone please explain to me how an increase in this guys personal taxes will effect his business?

I love how people will equate a tax increase to not being able to employ more people. The two are NOT connected.

Fucking wow !
His personal income comes from his company..it is taxed
When you raise his personal tax..he has to take more from the company to have the same spending power...Thus less to re invest back into the company,
When you raise the business tax this decreases the amount available for him to write himself a check
So he gets hit both ways
Clear enough for you?

I swear to god you are an idiot... what part do you NOT understand?

The money you invest into your company is NOT subject to federal tax. You are only taxed on the PROFITS, the money taken out of the company.
The money used to pay employees isn't considered a profit to the company, it's considered a business expense, so the company does NOT pay federal tax on that money used for payroll.

Shit, if you can't even understand my first example, then I'm not even going to try to explain anymore...

No one said the the money you invest back into your company is {not} subject to federal tax...but now that you mention it..I will say it again not all money reinvested will avoid the tax.
No one ever said the money to pay the employees is a profit...how the fuck could that be a profit...Jesus dude think before you post.
And yes there is a payroll tax....damn dude...so the more employees you have the more payroll tax you have.

It is quite obvious you have never owned a business nor understand the basic laws of science..and you want to call me an idiot.
TBO you do nothing more than amuse me with your lack of knowledge and laughable debating skills

 

[Francis]

That means...TM was claiming anything this businessman invested back into his company was taxed. Taxed either when earned or by distribution as a dividend or capital gains sale.
TM presented Siegel as an owner/investor.



Of course it is......didn't you read my post on explaining the relationships of taxation/business models and expected distribution of profits?
Any time distributions are taxed beyond acceptable returns to the investor, the business needs to satisfy the investor or lose financial support in the market arena......and as posted, that directly influences the financial strengths and abilities of a business to function and expand in order to meet investors demands.
These are simple concepts.

I am not sure about your taxation on business but I have a few questions for you..

How does that relate to Siegel's business as in why would investors matter in his case ?

 

[The Man]

Ok, so what you are saying is that you don't understand business either. Fine, let me explain it to you...



No they are not and let me explain why.

If you own a business and you have $100,000 profit at the end of the year and you take all $100,000 out of the company then you must pay federal taxes on that $100,000.
If you own a business and you have $100,000 profit at the end of the year and you reinvest $50,000 back into the company and only take out $50,000 then you only pay taxes on that $50,000.
You are not taxed on the money you reinvest back into your company, you only pay taxes on the profit. Profit is what you take OUT of the company at the end of the year so that money does absolutely NOTHING to help grow the business. It is this money that these guys are worried about. NOT what is invested back into the company in infrastructure and payroll.

Fuck here we go again...no where in any publication does it say the guy invested 100 percent back to the company.
He has a business to make money so he can live and buy things...get real..where do you come up with this BS.
He uses profits{taxed} from the company then writes himself a payroll check{taxed}.
Incredible

 

[The Man]

There is no way a business this large would ever consider being an S-corporation.

And my argument still stands. He is claiming that because of higher taxes it will jeopardize how much money he will have left for reinvestment and payroll where neither of these matter. These are both pretax expenditures The effective federal tax rate does not restrict how much cash he put's back into his company.

You are now trying to claim facts when you dont know what kind of corp it is...but yet claim reinvestment back to the company avoids the tax.
Incredible.

If you read the email you we see that he speaks as "I" not as "us" so there is a good damn good chance he is a Sole Proprietor

And get this...the tax is taken off the top before reinvestment if operating as such.

We use the word corp to loosely {I do myself for this forum} the tax codes are very complex and you do not automatically avoid the tax by re investing.