Unemployment hits 9.8%

[Usui Takumi 1,562]

Doesn't surprise in the least that you see it this way.

Right because i'm such a left winger what with my guns, prolife donations, and anti-amnesty stance.

Edited December 4, 2010 by Sousuke

[luckytxn 2,264]

Right because i'm such a left winger what with my guns, prolife donations, and anti-amnesty stance.

No. It would be because of your lack of reading comprehension.

[Usui Takumi 1,562]

No. It would be because of your lack of reading comprehension.

Lame.

[I AM NOT THAT GUY 5,715]

Doesn't surprise in the least that you see it this way.

Next, explain amortization tables and capital recapture, and how capital investments are not treated like regular business expenses.

[luckytxn 2,264]

Next, explain amortization tables and capital recapture, and how capital investments are not treated like regular business expenses.

Trying to keep it simple but OK. Want me to just google it and paste the response here or just post the links? Was hoping that just trying to explain that taking profits and then doing a capital investment in the business is different than a regular operating costs would be self explanatory but guess not.

To keep it simple though lets see. There is a regular business expenses throughout the year that a business has to have in order just to function. These are of course known expenses like rent, utilities and payroll, supplies, etc. Also things that come along and are unknown like toilet going kaboom and needing someone to come fix and that sort of stuff.

Of course then we have the product being sold and hopefully sell a lot of and that is what brings in money.

Now take the money coming in and subtract the expenses and what is left is the profit.

Out of this profit we need to think of the employees of course and decide what or how to do this. We can just write a check and pass out as bonuses. The employee will have to pay for this in taxes but the business will not. We can also just have a big party at a great restaurant and give out gifts and the business can write this off as a needed business expense and deduct a portion for taxes. Also there is usually a wish list that the employees want to make their work life a tad easier. This could be as simple as a new water cooler or coffee pot to a larger and paved parking lot. The water cooler or coffee pot is a one time write off on the taxes next year but the paved parking lot is amortized over years time and written off on taxes in stages. (these are examples)

At the end of the year we now can see how successful we have been with the business but we want the business to grow. We have several things we can do to help the business grow but we have to see what the costs are of each and decide which of them will be cost effective and the effectiveness of that item. Now we know that advertisement is a great way and mostly needed item to grow a business. So far we have been doing good with word of mouth and hoping that street sign in front of business will draw in customers but we want more business and the way to do this is to advertise on a big billboard or a tv or radio spot. This is expensive but can be written off as a business expense even though as a one time expense at tax time.

There are capital improvements that can help grow a business though that is and expensive one time investment. Say you have a copy business as an example. You have a couple of copy machines now that can do both high quality B&W and color but now you want a top of the line monster that can do anything and everything at ten times the speed. It is expensive but with it you can offer unprecedented service. This a capital investment and has to be amortized over a certain amount of years on your taxes.

Now you have 400,000.00 dollars profit. You want to make the employees happy so give a small bonus and a small party with a simple gift. you now have 385,000.00 dollars to take home but wait you need to think about the business. You know you need that super duper copy machine to grow but it costs a couple of thousand. Your expenses will become higher too because of the special needs of that machine buy feel sure that with the extra business that should come in that it will be offset. That machine will be amortized over 7 years so your taxes will be lessened but you have to by IRS rule do this.

But wait a minute now you just found out that there will be now a 3% percent tax increase on you because the Socialists say you are a rich mofo and a exploiter of the working people so now you have to make a hard decision. Sure if it was just a 3% tax increase you could absorb it and maybe even charge a tad more so as not to lose your customers but you know that everyone that supplies you with any raw material is also gonna be hit as they are also exploiters of the working class and they will maybe hit you with increases just to run a business. Also the electric bill is always up and down and you have set aside a certain amount to pay for this possibility but the raw material and everyday expenses are now an unknown as you have no idea which of your suppliers will be hitting you with a increase. You look and you have about 25-30 suppliers and if each increase a tad their costs then you all of a sudden now are looking at what was a slim profit margin to almost a possible no profit margin. You could raise your prices but there are about 6 other competitors that you are trying to compete against and raise too much and they give them a shot and you lose. Don't raise enough and you could possibly lose money.

What to do? Well there is now much uncertainty so you put off that huge capital expenditure for now and give the few employees a small raise to stick with you but forego hiring anyone and make do with what you have. Maybe slap a new coat of paint and instead of that paved parking lot you regrade it. You put that money in the bank and hope that stability comes so that your dream can come true one day to have the best business in the area where all know you as the best.

That 3% tax goes to all so called businesses and their suppliers and then their suppliers and so on. This is called trickle down for a reason. It is like a ripple in a pond that gets larger the further it goes. Each and every business now has to take a hit and each of them businesses has suppliers and so on. This is the reason that unemployment is the last to come down. Uncertain times means lean times. Stability means possible dreams can come and to act on dreams means one has to go for it and be bold.

[luckytxn 2,264]

Next, explain amortization tables and capital recapture, and how capital investments are not treated like regular business expenses.

Let me know if I need to explain it more clearly.

[Pooky 3,784]

I'd still go with the simple reason not to let the tax cuts expire - namely that for every $1.00 of additional tax revenue the government collects, they will spend between $1.18 and $1.80 of it.

So, basically, any tax increase will only stimulate the government's increase of the deficit.

[Mr. Big Dog 10,747]

I will try to make this simple for your sake. As you go along through the business year you will have expenses and that is an operating expense and not taxable. You are saying that after all is said and done that person now has 400,000.00 profit and they take that home and do whatever so a extra tax bite of 4500.00 is nothing. You are vilifying that person and making it look OK to hit that person to pay for others Socialist wants. That is playing Robin Hood.

Now after all is said and done and all operating expenses to just be running a business have been accounted for and the Taxes levied and there is a profit showing is the time any business person has to make some decisions. A business wants to grow of course and also to keep their employees happy at the same time but of course they need to also bring home some bacon for the family. It is from the profit that they must decide if they want to expend on any infrastructure to grow or maintain the business in the same mode. They also need to see about setting aside any bonuses for their employees or have that Christmas party or whatever. Now the following year they are able to then take any expenditures and tax deduct them but they have still decided to spend that money from their profits. (Like now I am looking at maybe spending a lot of money to buy a more energy efficient central air and heat. It will cost a ton of our profits we have had but in the long run it will save us money and even pay for itself in the long run I am hoping. This means I am now spending what little profit we have had and having actually no profit this our first year.) It is usually at the end of a business year that decisions are made on what to do with profits and how much to plow back into the business. It is also the time of the year that one must make decisions on how much to reward the employees for their hard work.

And to make it all simple also is that you refuse to acknowledge that the tax bite also goes to any of my suppliers and contractors and any and all that charge my business for things I need and so that very small tax bite (You say) is also their tax bite and they need to either absorb or pass that cost on to me. That small tax bite has now meant that all my operating expenses has risen so there is no small tax hike but a ripple effect that hits everyone. I have no idea which of my suppliers are going to absorb or eat that cost or pass it on or even a combination of the two so I need to keep more money on hand for any unseen expenses. This money could have been used to maybe give raises to valuable employees or even hire an additional employee but I am uncertain on how much I will have exactly to spend on that until I see stability.

Profits are there but it all a perception of what one sees as a profit. After all normal operating costs and expenditures are done and the outflow is decided and that is a profit to be sure. From that we must make decisions on what to plow back and if by plowing back will be a growth enhancer. There are a few but not most of business owners that will take that profit as all theirs and not care a whit about using some of that profit back into the business. You are right though and that expenses can be tax deductible at the end of the next tax year but not this one from where the profit is accrued. Remember the old saying, "it takes money to make money." No profit means no money to make money.

That's a bunch of hogwash. If you wait until a tax liability has been incurred to sit down and make decisions on whether or not to use some of the profits to re-invest, then you need to have a look in the mirror and perhaps a serious chat with your accountant. All the rest is just babble, my friend.

Robin Hood? Man, look at what happened to incomes in the various ranges over the past few decades - upper incomes have gone up double digits while medium and low income groups have actually lost ground. Increases in productivity no longer translate into higher wages for the rank and file but into disproportionately higher incomes for the business stakeholders. Economic growth happened to a large degree on consumer credit because people could keep consuming (read: growing the economy) only by burning through savings and taking out loans. That's quite obviously not sustainable.

[Mr. Big Dog 10,747]

I'd still go with the simple reason not to let the tax cuts expire - namely that for every $1.00 of additional tax revenue the government collects, they will spend between $1.18 and $1.80 of it.

That is a valid concern. I'd be much more comfortable if the revenues gained from the expiration of any portion of the Bush tax cuts would be iron-clad earmarked to go towards deficit reduction - i.e. a reverse pay-go, if you will.

[lostinblue 1,989]

Let me know if I need to explain it more clearly.

You forgot after working 80 hours per week,never taking a vacation,and someday you die of overwork from a heart attack in the office on a sunday afternoon. The feds still will want that death tax to pay for the welfare families that laughed at you all the time for years.

[ready4ONE 5,400]

You forgot after working 80 hours per week,never taking a vacation,and someday you die of overwork from a heart attack in the office on a sunday afternoon. The feds still will want that death tax to pay for the welfare families that laughed at you all the time for years.

Just wow! What a RNW fantasy scenario!

[lostinblue 1,989]

Just wow! What a RNW fantasy scenario!

I see you never ran a business. Spoken like a true liberal

What Day Off? Business Owners Putting In Six-Seven Day Weeks

59 percent of small business owners define a "day off" as being available for calls and emails, working some time or even working all day at a remote location.

23 percent of owners have not taken a planned vacation that lasted at least a week in more than four years.

In a report that will not come as a surprise to independent rent-to-own company owners and managers, small business owners are spending more hours per day and more days per week on the job than the rest of the population. According to a May poll by Rasmussen, 45 percent of small business owners work six or seven days a week, more than twice the 19 percent of the general population who have a similar schedule.

The state of the economy hasn't helped, either. One in 4 small business owners said they are working more hours because of the economic downturn, with 55 percent working the same number of hours.

Even when they are away, small business owners stay in touch with the office: 40 percent admit to carrying a wireless email device to keep in touch with their business when taking time off of work. Luckily, their spouses usually understand. Fifty-three percent of owners say their spouse approves of them checking business email on their days off or during vacation, but patience may be running thin. That percentage is down from 55 percent a year ago.

-59 percent of small business owners define a "day off" as being available for calls and emails, working some time or even working all day at a remote location. Only 31 percent of the general population feels the same.

-23 percent of owners have not taken a planned vacation that lasted at least a week in more than four years.

-25 percent of owners indicated they work 10 to 12 hours per day, compared to 15 percent of the general population who say they work that much.

-On official holidays, 47 percent say they are at work "always" or "most of the time."

RTO Online is the official channel for Rent-to-Own Industry News and the only independent source of news for the rent-to-own, rental-purchase, lease-purchase trade. RTO Online (Rent to Own Online) represents the choice of the entire RTO Industry for trusted information, as it happens.

http://rtoonline.com/Content/Article/May08/SmallBusinessConfidence052808.asp

[lostinblue 1,989]

23 percent of owners have not taken a planned vacation that lasted at least a week in more than four years

According to a May poll by Rasmussen, 45 percent of small business owners work six or seven days a week, more than twice the 19 percent of the general population who have a similar schedule

One in 4 small business owners said they are working more hours because of the economic downturn

25 percent of owners indicated they work 10 to 12 hours per day

Just wow! What a RNW fantasy scenario!????

[Usui Takumi 1,562]

That's a bunch of hogwash. If you wait until a tax liability has been incurred to sit down and make decisions on whether or not to use some of the profits to re-invest, then you need to have a look in the mirror and perhaps a serious chat with your accountant. All the rest is just babble, my friend.

Robin Hood? Man, look at what happened to incomes in the various ranges over the past few decades - upper incomes have gone up double digits while medium and low income groups have actually lost ground. Increases in productivity no longer translate into higher wages for the rank and file but into disproportionately higher incomes for the business stakeholders. Economic growth happened to a large degree on consumer credit because people could keep consuming (read: growing the economy) only by burning through savings and taking out loans. That's quite obviously not sustainable.

The one thing lucky said that may occur is where someone wants to invest in something that requires multiple years to establish capital. For instance, many of the 2% of small businesses (I actually think its most of the 2%??) that would be affected are doctor's private practices. So for instance if a dentist wants to upgrade his office equipment in one go, he'll have to establish funds over a period of a few years. I think in the end it will have an effect on small business owner's behavior. IE will I put back a little in the company now, or three years from now etc. Its certainly a valid argument as to the role of government in creating market behavior, and I understand that point of view, though I disagree.

[Usui Takumi 1,562]

23 percent of owners have not taken a planned vacation that lasted at least a week in more than four years

According to a May poll by Rasmussen, 45 percent of small business owners work six or seven days a week, more than twice the 19 percent of the general population who have a similar schedule

One in 4 small business owners said they are working more hours because of the economic downturn

25 percent of owners indicated they work 10 to 12 hours per day

Just wow! What a RNW fantasy scenario!????

I think statistically the ones that would be affected (those 2-3% who's small businesses make over $250,000) are lawyer and doctor's practices. Most of the doctors I know work 4 day weeks.