To be very clear: I know a few small business people and I know of none who make decisions on hiring or firing or shrinking or expanding their business based on the tax rates that have, are, or might be in effect. I have been a CPA for over thirty years and speak from direct observation.
People start a business to create wealth. Not for their employees, but for themselves. They hire people because there is a need to fill, not just to create jobs.
Often, the small businessperson will work very long hours and not take vacations and hock everything to fund the business. Often, they fail and lose everything, Sometimes, they become very successful.
But here is the thing: it is not just intelligence or education or hard work that makes someone successful in business. I have seen the smartest, most highly-educated hard working people fail while uneducated, ignorant and lazy people succeed. It is clear: the race is not always to the strong. Sometimes, things just flat work out for reasons that are unfathomable.
Today, I saw the news story: David Siegel, the owner of Westgate Resorts who is telling his employees he may fire them if Obama is reelected, while telling them he is not going to tell them how to vote. (See the letter to his employees here.) Westgate is a timeshare company and is, I think, dependent on the little guy for his business—I mean rich people like him don’t need timeshares; they may spend as much in one night on vacation as the total timeshare cost. There is nothing wrong with this: he is successful and entitles to the benefits thereof.
I am sure Siegel worked hard—he says he did, and I accept that. But he also got some breaks along the way.
Then there is the 90,000 square foot home called Versailles he is building with 10 kitchens and 23 bathrooms and an estimated cost at completion of $100 million. All well and good, except that when he got into financial trouble—like so many did The unfinished home was put into foreclosure, but as he put it, worked out better than he expected, including a nine-month holiday from principle and interest.
But, you see, he got no help. Just like Craig T. Nelson’s infamous line,” I’ve been on food stamps and welfare. Did anyone help me? No.” Mind boggling.
Regarding his company: its profits are soaring, and it has 5,000 fewer employees than it did in 2007—and it is this remaining 7,000 that he is not threatening with job loss if the election goes the “wrong way.”
His letter to his employees closes as follows:
You see, I can no longer support a system that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, so will your opportunities. If that happens, you can find me in the Caribbean sitting on the beach, under a palm tree, retired, and with no employees to worry about.
No loyalty to those who have loyalty to him. He got his. That’s all that is needed.
But, if he had not gotten his, there is no way he would quit.
This is the ugly reality.
the picture, of this guys home is from here