Good article by Declan McCullagh at CNET.
By all means, read it all, but here are some choice quotes:
If you adopt a business overtly hostile tax and regulatory regime, such as here in Michigan, you are going to drive businesses away, and cause those that are here to rethink investment. In growth, in people, …
I am still trying to wrap my brain around Obamacare, and what it means to us as a small company. Its not cut and dry like the pundits and talking heads would have you believe. Not even close. So when you see someone make light of it, claim its simple, and claim it means X, Y, and Z, with only clueless or dishonest people indicating otherwise … well … assume that they are in fact clueless.
What I am hoping for is we get more business and investment savvy candidates for political office like #RickForMI. Computer guy (ok a lawyer by training, but he’s run computer companies) who’ve actually formed, built, grown, invested in companies (and thus created jobs and wealth … can’t do the first without doing the second, or the first goes away when the money runs out, as our administration is discovering around now … ).
You have to grow the economy by providing opportunity for growth, and reducing the friction for that growth. The article indicates that company leaders have been expressing concern over that friction, and note that they can do the same jobs outside of this tax and regulatory regime at a lower cost. The investment will follow them.
As de Tocqueville noted
Think about that. Then think about the ARRA . More taxes (e.g. more friction) to pay for this. Which translates to higher costs for businesses.
What does this mean for businesses? That total cost of a person is likely to be eaten up by the taxes you have to pay. So, rather than invest in hiring new people, we wind up sending our hard earned money to the government for the express purpose of them spending it on things we probably wouldn’t choose to do. More than that, it means that adding the next person incrementally to the company is going to cost dramatically more, as we layer on all the new increased costs of health care, tax regime, and heaven help us if we earn more money … we can be taxed harder according to the folks in control now. Or worse, why should we try to grow our revenue, if by doing so, we can’t keep the profits, or we effectively lose money by increasing our revenue because of higher taxes on higher earnings?
So why bother to invest here? This is what the business folks are saying in the article. And they are dead on correct. Yeah, I know, some readers who have a different political outlook will think this self serving hogwash. Everyone is entitled to their opinions. If doubling my revenue means my taxes increase 2.5x, why would I even consider this? And more to the point, why would I take the steps necessary to do this, which will increase my cost basis even faster? That makes no sense, regardless of the side of the political spectrum you fall on.
I hope Rick wins. I hope other candidates similar to Rick win. Not that they will solve everything. But maybe they can get us going in a rational direction.