Tag Archive for 'politics'

Phil Mickelson should be praised for tax comments

Published
by
Jim Blasingame
on February 5, 2013
in Economy: National and Global and Presidential policies
. 0 Comments

In America, there are 20 million small business owners who can be further classified as independent contractors (IC).

These entrepreneurs are sole proprietors, consultants, freelancers, or anyone who works alone, without a net, on the marketplace high-wire. When the person coined the term, “Eat what you kill” he was talking about this hardy group. On the scale that measures financial and professional risk, with 10 being “made in the shade,” and 1 being “OMG,” ICs begin with a 0.1 rating and 90% never get above a 2.

One of these ICs is Phil Mickelson, professional golfer.

Mickelson, 42, is a very successful IC: World Golf Hall of Fame, short list of “Greatest Golfers of All Time” and the greatest left-handed player. “Lefty,” has won 40 PGA tournaments, including four majors, career prize money over $67 million and annual endorsements estimated at $50 million.

Just like other ICs, and unlike NFL, MLB and NBA players, Mickelson has no guaranteed contract. If he plays poorly the first two days of a tournament he is “cut” and leaves without a paycheck. And if his poor play continues long enough, not only do tournament earnings diminish, but endorsements as well. “Phil the Thrill” has earned his wealth.

Recently this native Californian made news by voicing concerns about his state’s increasing income tax rates, that with Federal rates, conservatively puts him well above the 50% level. He lamented that he might have to move, or maybe even retire. If he lived in a state with no income tax, like Texas or Florida, his tax bill would drop more than $7 million.

Many in the press were critical of Mickelson for his comments, saying he shouldn’t complain since after all, how many millions does anyone need? But this is America; we have the liberty to earn and keep as much as we can, the right to voice our displeasure when the government is taking too much, and not apologize for either.

Small business owners agree with Phil and Supreme Court Justice Louis Brandeis, who wrote that while tax evasion is illegal, tax avoidance is commendable. Mickelson’s comments on high taxes were commendable, honest and courageous – too bad he later apologized.

We have just learned the U.S. economy had negative growth in the fourth quarter. One big reason we may now be slouching toward a double dip recession is because small business owners, like Mickelson, are shrugging in response to anti-growth tax and regulatory policies.

A small business owner’s motivation to take risks is in direct proportion to the level of government interference.

###

Recently on The Small Business Advocate Show, I talked with a couple of pretty smart guys who defend Phil Mickelson’s comments, his right to say what he did, and why his position is on target with small business optimism and growth in the U.S.

Cliff Ennico is a lawyer specializing in legal and tax issues for small businesses, and is a popular instructor at eBay University. He is a frequent contributor to Entrepreneur magazine and the author of The ebay Seller’s Tax and Legal Answer Book and Small Business Survival Guide. His weekly syndicated column, Succeeding in Your Business, appears in dozens of newspapers and websites.

Rick Newman is chief business correspondent for U.S. News & World Report and author of Rebounders: How Winners Pivot from Setback to Success.

Click on one of the links below to download or listen. We’d also like to know what you think, so please leave us a comment.

So what’s wrong with what Phil Mickelson said about taxes? with Rick Newman

In defense of Phil Mickelson and other small business owners with Cliff Ennico

Why Phil Mickelson was right about taxes with Jim Blasingame

Check out more of Jim’s great content HERE!

Take this week’s poll HERE!

Watch Jim’s videos HERE!

Next Main Street movie: “Small Business Shrugged”

Published
by
Jim Blasingame
on January 14, 2013
in Economy: National and Global and Presidential policies
. 0 Comments

At this moment four years ago we were in the middle of The Great Recession whirlwind. We didn’t know how bad things were going to get because all of the shoes had not dropped in reaction to the financial crisis. Millions were still being laid off, GM and Chrysler had not yet taken bankruptcy and the federal government was injecting the first of trillions of dollars into a shell-shocked economy.

Today, 43 months after the technical end of The Great Recession, surveys I report about on my radio program (NFIB, Tatum, our online poll, etc.), indicate that about a fifth of small businesses are doing well, about as many are doing poorly, and the middle 60% are doing just okay. This economy should be a rising tide floating all boats; but it isn’t. Instead, as in 2009, every small business owner is still anxious about the next 12 months.

During recoveries of past recessions, concerns were about market dynamics created by the usual suspects: inflation, global trade, supply and demand, technology disruptions, fear and greed, etc. But this not-so-great recovery is different.

For the first time in my long career (seven recessions), the origin of what will wake up small business owners at 3am in 2013 are mostly challenges created by the federal government. Here’s the short list: higher taxes; unsustainable budget deficits and debt; hundreds of Obamacare mandates, regulations, penalties and taxes (Galen Institute); thousands of new 2013 regulations costing businesses $123 billion, plus 13.6 million compliance man-hours (American Action Forum).

But alas, there is one more thing which may be more troubling to this market sector that produces over half of the U.S. economy: A zero-sum philosophy coming from Washington that the financial success of “fortunate” Americans is at the expense of others. But successful entrepreneurs are only fortunate because, like every American, they have a Constitutional right to pursue success, not a guarantee of success.

Small businesses take economic headwinds in stride because they know the marketplace is self-healing with the passage of time. But government-created headwinds not only don’t heal, they compound, and this truth does not motivate small business owners to take risks.

Most small business owners want to grow and hire, but they don’t have to. So far, that’s not a government mandate. The next movie the political class may see playing on Main Street could be titled, “Small Business Shrugged.”

Eventually government expansion and economic expansion become mutually exclusive.

###

This week on The Small Business Advocate Show I talked more about America’s lack of small business optimism and why political policies are to blame for the slow economic recovery. Click here to download or listen. Afterward, please let me know what you think.

Check out more of Jim’s great content HERE!

Take this week’s poll HERE!

Watch Jim’s videos HERE!

Small business and the “fiscal cliff”

Published
by
Jim Blasingame
on December 12, 2012
in Economy: National and Global and Politics
. 0 Comments

The only thing that exceeds the lack of leadership in Washington, D.C. these days is the level of partisanship.

For most of the last two years, the political class has demonstrated proof of these two ignominious distinctions by failing to minimize the damage – if not provide solutions – to a number of fiscal challenges facing the U.S. government. Democrats and Republicans have continued to walk away from the negotiating table with nothing more than a temporary fix and full knowledge that on December 31, 2012, the calculus created by expiring governmental laws and the rude laws of economics, will cause the government to go over the dreaded “fiscal cliff” and take the economy with it.

And now, with the drop-dead date looming, the economic implications of political dysfunction are filling up the windshield of every small business as we race toward the year-end precipice. They know on the other side are multiple tax increases and mandatory budget cuts that will drain cash from consumers and businesses, which many economists predict will lead to another recession. As a consequence, way too many small businesses that barely made it through the Great Recession won’t survive a Double Dip.

With the November 6 election producing little change in the balance of political power, or the players, can we expect the same unleadership dynamic to fix in a matter of days what didn’t get fixed when there was plenty of time? Isn’t that Einstein’s definition of insanity?

We wanted to know what our small business audience thinks about this issue, so recently, in our online poll, we asked, “How do you feel about the ability of President Obama and Congress to avoiding the ‘fiscal cliff?” Here’s what we learned:

Just over a third said they were “Confident” of a fix, with the “Undecided” coming in at 7%. But the big group - 57% - allowed that they had “No confidence” the fiscal cliff would be avoided.

Alas, with precious little time left, it appears that our poll majority may be the accurate one. Meanwhile, small business owners still can’t make informed budget, pricing, and growth decisions for 2013. Here’s some rich irony: If we ran our businesses the way the government runs its affairs, there would be no private sector income to tax.

And yet the political class still wonders why businesses of all sizes aren’t hiring more workers and making more investments.

The 19th century French philosopher de Tocqueville said, “In a democracy, we get the government we deserve.” Rude, but sadly, still true.

###

This week on The Small Business Advocate Show I talked more about the impact of the fiscal cliff on small businesses with Chuck Kadlec. Chuck is a member of the Economic Advisory Board of the American Principles Project, and former Managing Director of J. & W. Seligman & Co. Inc. and Chief Investment Strategist for Seligman Advisors. He was also Jack Kemp’s economic advisor during his 1988 presidential campaign. Click on one of the links below to listen to Chuck’s fiscal cliff predictions.

Republicans should retreat from fiscal cliff talks

Boehner should take what he can and fight another day

The fiscal cliff dysfunction is already hurting small business

Check out more of Jim’s great content HERE!

Take this week’s poll HERE!

Watch Jim’s videos HERE!

Which candidate is best for small business?

Published
by
Jim Blasingame
on November 5, 2012
in Government and Presidential policies
. 0 Comments

As a leading voice for small business success, one of the factors I track and report on is public policy. In my advocacy role, I support those issues that benefit small business and oppose those that don’t, regardless of party origin.

Every four years since 2000 I have compared the policies of the two presidential candidates with regard to their alignment with small business success. Here are comparisons for the top small business issues:

Jobs = customers
President Obama’s economic recovery plan – including spending hundreds of billions on a government approach to economic growth – has failed as a jobs creator. And yet he continues to advocate more government “investment” in the economy. Mitt Romney has stated that the best way to grow the economy is to support small businesses in their efforts to grow jobs and thus create more customers for everyone.

Taxes
The largest drain on a small business’s precious working capital is taxes. President Obama thinks of tax reform as a way to redistribute wealth from “millionaires and billionaires,” but small businesses will become collateral damage. Mitt Romney proposes tax reform where job creators pay higher taxes based on their success, plus a broader tax base so more Americans have a vested interest in our country’s future.

Health care
Obamacare will cost double the initial estimate, plus impose new fines, new taxes and onerous compliance requirements on small businesses – without benefiting them. But perhaps the worst of this law is it puts small business owners in conflict with their employees and their own growth plans.

President Obama is committed to his namesake law. Mitt Romney promises to repeal Obamacare. When we polled small business owners about Obamacare, 78% agreed with Romney.

Fuel prices
Gasoline costs small businesses and their customers almost twice what it did when Barack Obama took office.

All of the increase isn’t Obama’s fault, but presidents can influence oil prices. When crude topped $140 a barrel in 2008, President Bush simply announced he wanted to remove the offshore drilling ban and oil prices dropped like a stone.

President Obama has taken no steps to reduce oil prices – rejecting the Keystone pipeline, for example – because his alternative energy policies only work when the cost of carbon fuel is high. Mitt Romney has promised to pursue the full potential of America’s domestic energy sources.

Mitt Romney is the only presidential candidate who knows what it takes to make a payroll every Friday.

#####

On my radio program, The Small Business Advocate Show, I talked more about my comparison of the two Presidential candidates based on issues important to the future of small business. Click here to download or listen.

Check out more great SBA content HERE!

Take this week’s poll HERE!

Watch Jim’s videos HERE!

More Fed QE won’t help small business

Published
by
Jim Blasingame
on October 11, 2012
in Economy: National and Global and Government
. 0 Comments

In the fall of 2008, one of the entities charged with helping the U.S. economy avoid a full financial collapse was the U.S. central bank, the Federal Reserve Board.

The Fed has many monetary tools to infuse liquidity into a weak economy, including buying securities with money it creates, literally from thin air. So when the 2008 financial collapse happened, the Fed initiated a plan it called “quantitative easing” (QE), and bought hundreds of billions of dollars of securities from banks and other financial institutions. Most experts consider this step to have limited the depth of the crisis.

When economic recovery remained tepid more than a year after the end of the Great Recession, the Fed launched QE2 in 2010, buying billions more of various securities from Wall Street entities. And even though two years hence a still-languishing economy seems to demonstrate that liquidity is no longer our problem, the Fed recently announced yet another round of accommodation called, wait for it … QE3.

We wanted to know what small business owners thought about this recent Fed step, so in our online poll, we asked this question: “What do you think about the Fed’s third round of liquidity infusion (QE3)?” Here are the results.

Only 2% of our sample said, “This is good economic policy,” while 11% admitted they “Don’t understand it.” The big group – 86% – reported they thought this move was “Not good economic policy.”

So why are small business owners so anti-QE? Perhaps it’s because they aren’t feeling the love from the Fed.

Remember, when the Fed buys securities that money goes to Wall Street, not Main Street. Since 2009 the Dow-Jones index has risen 1000 points each year and the NASDAQ has doubled. Meanwhile the Main Street economy continues to languish barely above recession levels, contributing to extremely weak small business loan demand from their only direct connection to Fed liquidity: banks.

Furthermore, since many economists believe hyper-inflation will eventually result from the Fed’s QE strategy, small businesses – which have not benefited from QE – will be hurt by the inflation. Plus, unlike Wall Street, small businesses don’t operate with buy/sell limits or hedging strategies that allow them to make money regardless of which direction the market is going. They’re planted in the ground, on Main Street.

Small businesses need Fed policies that grow the economy, not just the stock market.

Small businesses need MC (more customers), not more QE.

#####

Recently on The Small Business Advocate Show  I had conversations with Mike Menzies and Ray Keating on validity of using quantitative easing to stimulate the economy and it’s impact on small businesses. Mike is President of Easton Bank & Trust in Easton, Maryland, and Ray is Chief Economist of the Small Business & Entrepreneurship Council. Click on one of the links below to download or listen.

The Fed’s QE3 plans aren’t what the economy needs with Ray Keating

The Fed’s QE3 plans will hurt small businesses with Mike Menzies

Check out more great SBA content HERE!

Watch Jim’s videos HERE!

Take this week’s poll HERE!

Small Business Advocate Poll: Game-changer?

Published
by
Jim Blasingame
on October 8, 2012
in Government and Politics
. 0 Comments

Debates between presidential candidates aren’t always game-changers. But sometimes they are, like the one just competed.

It’s difficult to gauge whether people are surprised that Romney performed so commandingly, or that Obama came in third in a two-man debate. Either way, in terms of being a game-changer, this debate is being scored as one of the top three in more than a half-century.

We wanted to know what our audience’s expectations were for this debate, so in our online poll last week, we asked this question: “The first of three Presidential debates will take place this week. How will these events impact your vote?” Here’s what we learned:

Only 12% said the debate results would not change their plan to vote for the Obama/Biden ticket. The big number from our survey - 73% - said the debate would not change their vote for Romney/Ryan. Just 15% admitted that they thought the debates would influence their final decision.

If our audience is representative of the small business sector, it’s a solid Romney/Ryan constituency, which shouldn’t surprise anyone, least of all the Obama campaign. But with his poor debate performance this week, it can’t be good news for President Obama that 15% of our folks were looking forward to the debate for something to help them make their decision.

#####

Last week on The Small Business Advocate Show, I talked about the first presidential debate with Rich Galen, Republican strategist, publisher of the popular cyber-column, Mullings.com and frequent political talking head. Click on one of the links below to download or listen to what we had to say.

Who won the first Obama-Romney debate?

The Obama-Romney debate was beautifully unstructured

Was the first Obama-Romney debate a game changer?

Check out more great SBA content HERE!

Watch Jim’s videos HERE!

Take this week’s poll HERE!