Dear Employees, Tax Increases Are Coming to YOU.
Subject: The Employee Meeting
THIS IS WELL WORTH READING
The Employee Meeting: I would like to start by thanking you for
attending this meeting, though it's not like you had much of a
choice. After all, attendance was mandatory. I'm also glad many of
you accepted my invitation to your family members to be here as
well. I have a few remarks to make to all of you, and then we'll
retire to the ballroom for a great lunch and some employee awards.
I felt that this meeting was important enough to close all 12 of our
tire and automotive shops today so that you could be here. To
reassure you, everybody is being paid for the day --- except me.
Since our stores are closed we're making no money. That economic
loss is mine to sustain. Carrington Automotive has 157 full time
employees and around 30 additional part-timers. All of you are here.
I thank you for that.
When you walked into this auditorium you were handed a rather thick
78-page document. Many of you have already taken a peek. You were
probably surprised to see that it's my personal tax return for 2008.
Those of you who are adept at reading these tax returns will see
that last yearmy taxable income was $534,000.00. Now I'm sure this
seems rather high to many of you. So ... let's talk about this tax
return.
Carrington Automotive Enterprises is what we call a Sub-S - a
Subchapter S corporation. The name comes from a particular part of
our tax code.Sub-S status means that the income from all 12 of our
stores is reported on my personal tax return. Businesses that report
their income on the owner's personal tax return are referred to as
"small businesses." So, you see now that this $534,000 is really the
total taxable income - the total combined profit from all 12 of our
stores. That works out to an average of a bit over $44,000 per store.
Why did I feel it important for you to see my actual 2008 tax
return? Well, there's a lot of rhetoric being thrown around today
about taxes, small businesses and rich people. To the people in
charge in Washington right now I'm a wealthy American making over a
half-million dollars a year. Most Americans would agree: I'm just
another rich guy; after all ... I had over a half-million in income
last year, right? In this room we know that the reality is that I'm
a small business owner who runs 12 retail establishments and employs
187 people. Now here's something that shouldn't surprise you, but it
will: Just under 100 percent ... make that 99.7 percent of all
employers in this country are small businesses, just like ours.
Every one of these businesses reports their income on a personal
income tax return. You need to understand that small businesses like
ours are responsible for about 80 percent of all private sector jobs
in this country, and about 70 percent of all jobs that have been
created over the past year. You also need to know that when you hear
some politician talking about rich people who earn over $200,000 or
$500,000 a year, they're talking about the people who create the jobs.
The people who are now running the show in Washington have been
talking for months about raising taxes on wealthy Americans. I
already know that in two years my federal income taxes are going to
go up by about 4.5 percent. That happens when Obama and the
Democrats allow the Bush tax cuts to expire. When my taxes climb by
4.5 percent the Democrats will be on television saying that this
really isn't a tax increase. They'll explain that the Bush tax cuts
have expired .. nothing more. Here at Carrington we'll know that
almost 5% has been taken right off of our bottom line. And that
means it will be coming off your bottom line.
Numbers are boring, I know ... but let's talk a bit more about that
$534,000. That's the money that was left last year from company
revenues after I paid all of the salaries and expenses of running
this business. Now I could have kept every penny of that for myself,
but that would have left us with nothing to grow our business, to
attract new customers and to hire new employees. You're aware that
we've been talking about opening new stores in Virginia Beach and
Newport News . To do that I will have to buy or lease property,
construct a building and purchase inventory. I also have to hire
additional people to work in those stores. These people wouldn't
immediately be earning their pay. So, where do you think the money
for all of this comes from? Right out of our profits .. right out of
that $534,000. I need to advertise to bring customers in, especially
in these tough times. Where do you think that money comes from? Oh
sure, I can count it as an expense when I file my next income tax
return .. but for right now that comes from either current revenues
or last year's profits. Revenues right now aren't all that hot ...
so do the math. A good effective advertising campaign might cost us
more than $300,000.
Is this all starting to come together for you now?
Right now the Democrats are pushing a nationalized health care plan
that, depending on who's doing the talking, will add anywhere from
another two percent to an additional 4.6 percent to my taxes. If I
add a few more stores, which I would like to do, and if the economy
improves, my taxable income ... our business income ... could go
over one million dollars! If that happens the Democrats have yet
another tax waiting, another five percent plus! I've really lost
track of all of the new government programs the Democrats and
President Obama are proposing that they claim they will be able to
finance with new taxes on what they call "wealthy Americans."
And while we're talking about health care, let me explain something
else to you. I understand that possibly your biggest complaint with
our company is that we don't provide you with health insurance. That
is because as your employer I believe that it is my responsibility
to provide you with a safe workplace and a fair wage and to do all
that I can to preserve and grow this company that provides us all
with income. I no more have a responsibility to provide you with
health insurance than I do with life, auto or homeowner's insurance.
As you know, I have periodically invited agents for health insurance
companies here to provide you with information on private health
insurance plans.
The Democrats are proposing to levy yet another tax against
Carrington in the amount of 8 percent of my payroll as a penalty for
not providing you with health insurance. You should know that if
they do this I will be reducing every person's salary or hourly wage
by that same 8 percent. This will not be done to put any more money
in my pocket. It will be done to make sure that I don't suffer
financially from the Democrat's efforts to place our healthcare
under the control of the federal government. It is your health, not
mine. It is your healthcare, not mine. These are your expenses, not
mine. If you think I'm wrong about all this, I would sure love to
hear your reasoning.
Try to understand what I'm telling you here. Those people that Obama
and the Democrats call "wealthy Americans" are, in very large part,
America 's small business owners. I'm one of them. You have the
evidence, and surely you don't think that the owner of a bunch of
tire stores is anything special. That $534,000 figure on my income
tax return puts me squarely in Democrat crosshairs when it comes to
tax increases.
Let's be clear about this ... crystal clear. Any federal tax
increase on me is going to cost you money, not me. Any new taxes on
Carrington Automotive will be new taxes that you, or the people I
don't hire to staff the new stores I won't be building, will be
paying. Do you understand what I'm telling you? You've heard about
things rolling downhill, right? Fine ... then you need to know that
taxes, like that other stuff, roll downhill. Now you and I may
understand that you are not among those that the Democrats call
"wealthy Americans," but when this "tax the rich" thing comes down
you are going to be standing at the bottom of the mud slide, if you
get my drift. That's life in the big city, my friends ... where
elections have consequences.
You know our economy is very weak right now. I've pledged to get us
through this without layoffs or cuts in your wages and benefits.
It's too bad the politicians can't get us through this without
attacking our profits. To insure our survival I have to take a
substantial portion of that $534,000 and set it aside for unexpected
expenses and a worsening economy. Trouble is, the government is
eyeing that money too ... and they have the guns. If they want it,
they can take it.
I don't want to make this too long. There's a great lunch waiting
for us all. But you need to understand what's happening here. I've
worked hard for 23 years to create this business. There were many
years where I couldn't take a penny in income because every dollar
was being dedicated to expanding the business. There were tough
times when it took every dollar of revenues to replenish our
inventory and cover your paychecks. During those times I earned
nothing. If you want to see those tax returns, just let me know.
OK ... I know I'm repeating myself here. I don't hire stupid people,
and you are probably getting it now. So let me just ramble for a few
more minutes.Most Americans don't realize that when the Democrats
talk about raising taxes on people making more than $250 thousand a
year, they're talking about raising taxes on small businesses. The
U.S. Treasury Department says that six out of every ten individuals
in this country with incomes of more than $280,000 are actually
small business owners. About one-half of the income in this country
that would be subject to these increased taxes is from small
businesses like ours. Depending on how many of these wonderful new
taxes the Democrats manage to pass, this company could see its tax
burden increase by as much as $60,000. Perhaps more.
I know a lot of you voted for President Obama. A lot of you voted
for Democrats across the board. Whether you voted out of support for
some specific policies, or because you liked his slogans, you need
to learn one very valuable lesson from this election. Elections have
consequences. You might have thought it would be cool to have a
president who looks like you; or a president who is young, has a
buff body, and speaks eloquently when there's a teleprompter in the
neighborhood. Maybe you liked his promises to tax the rich. Maybe
you believed his promise not to raise taxes on people earning less
than a certain amount. Maybe you actually bought into his promise to
cut taxes on millions of Americans who actually don't pay income
taxes in the first place. Whatever the reason .. your vote had
consequences; and here they are.
Bottom line? I'm not taking this hit alone. As soon as the Democrats
manage to get their tax increases on the books, I'm going to take
steps to make sure that my family isn't affected. When you own the
business, that is what you're allowed to do. I built this business
over a period of 23 years, and I'm not going to see my family suffer
because we have a president and a congress who think that wealth is
distributed rather than earned. Any additional taxes, of whatever
description, that President Obama and the Democrats inflict on this
business will come straight out of any funds I have set aside for
expansion or pay and benefit increases. Any plans I might have had
to hire additional employees for new stores will be put aside. Any
plans for raises for the people I now have working for me will be
shelved. Year-end bonuses might well be eliminated. That may sound
rough, but that's the reality.
You're going to continue to hear a lot of anti-wealth rhetoric out
there from the media and from the left. You can chose to believe
what you wish .. .but when it comes to Carrington Automotive you
will know the truth. The books are open to any of you at any time. I
have nothing to hide. I would hope that other small business owners
out there would hold meetings like this one, but I know it won't
happen that often. One of the lessons to be learned here is that
taxes ... all taxes ... and all regulatory costs that are placed on
businesses anywhere in this country, will eventually be passed right
on down to individuals; individuals such as yourself. This hasn't
been about admonishing anyone and it hasn't been about issuing
threats. This is part of the education you should have received in
the government schools, but didn't. Class is now dismissed.
Hat Tip Wofat.
THIS IS WELL WORTH READING
The Employee Meeting: I would like to start by thanking you for
attending this meeting, though it's not like you had much of a
choice. After all, attendance was mandatory. I'm also glad many of
you accepted my invitation to your family members to be here as
well. I have a few remarks to make to all of you, and then we'll
retire to the ballroom for a great lunch and some employee awards.
I felt that this meeting was important enough to close all 12 of our
tire and automotive shops today so that you could be here. To
reassure you, everybody is being paid for the day --- except me.
Since our stores are closed we're making no money. That economic
loss is mine to sustain. Carrington Automotive has 157 full time
employees and around 30 additional part-timers. All of you are here.
I thank you for that.
When you walked into this auditorium you were handed a rather thick
78-page document. Many of you have already taken a peek. You were
probably surprised to see that it's my personal tax return for 2008.
Those of you who are adept at reading these tax returns will see
that last yearmy taxable income was $534,000.00. Now I'm sure this
seems rather high to many of you. So ... let's talk about this tax
return.
Carrington Automotive Enterprises is what we call a Sub-S - a
Subchapter S corporation. The name comes from a particular part of
our tax code.Sub-S status means that the income from all 12 of our
stores is reported on my personal tax return. Businesses that report
their income on the owner's personal tax return are referred to as
"small businesses." So, you see now that this $534,000 is really the
total taxable income - the total combined profit from all 12 of our
stores. That works out to an average of a bit over $44,000 per store.
Why did I feel it important for you to see my actual 2008 tax
return? Well, there's a lot of rhetoric being thrown around today
about taxes, small businesses and rich people. To the people in
charge in Washington right now I'm a wealthy American making over a
half-million dollars a year. Most Americans would agree: I'm just
another rich guy; after all ... I had over a half-million in income
last year, right? In this room we know that the reality is that I'm
a small business owner who runs 12 retail establishments and employs
187 people. Now here's something that shouldn't surprise you, but it
will: Just under 100 percent ... make that 99.7 percent of all
employers in this country are small businesses, just like ours.
Every one of these businesses reports their income on a personal
income tax return. You need to understand that small businesses like
ours are responsible for about 80 percent of all private sector jobs
in this country, and about 70 percent of all jobs that have been
created over the past year. You also need to know that when you hear
some politician talking about rich people who earn over $200,000 or
$500,000 a year, they're talking about the people who create the jobs.
The people who are now running the show in Washington have been
talking for months about raising taxes on wealthy Americans. I
already know that in two years my federal income taxes are going to
go up by about 4.5 percent. That happens when Obama and the
Democrats allow the Bush tax cuts to expire. When my taxes climb by
4.5 percent the Democrats will be on television saying that this
really isn't a tax increase. They'll explain that the Bush tax cuts
have expired .. nothing more. Here at Carrington we'll know that
almost 5% has been taken right off of our bottom line. And that
means it will be coming off your bottom line.
Numbers are boring, I know ... but let's talk a bit more about that
$534,000. That's the money that was left last year from company
revenues after I paid all of the salaries and expenses of running
this business. Now I could have kept every penny of that for myself,
but that would have left us with nothing to grow our business, to
attract new customers and to hire new employees. You're aware that
we've been talking about opening new stores in Virginia Beach and
Newport News . To do that I will have to buy or lease property,
construct a building and purchase inventory. I also have to hire
additional people to work in those stores. These people wouldn't
immediately be earning their pay. So, where do you think the money
for all of this comes from? Right out of our profits .. right out of
that $534,000. I need to advertise to bring customers in, especially
in these tough times. Where do you think that money comes from? Oh
sure, I can count it as an expense when I file my next income tax
return .. but for right now that comes from either current revenues
or last year's profits. Revenues right now aren't all that hot ...
so do the math. A good effective advertising campaign might cost us
more than $300,000.
Is this all starting to come together for you now?
Right now the Democrats are pushing a nationalized health care plan
that, depending on who's doing the talking, will add anywhere from
another two percent to an additional 4.6 percent to my taxes. If I
add a few more stores, which I would like to do, and if the economy
improves, my taxable income ... our business income ... could go
over one million dollars! If that happens the Democrats have yet
another tax waiting, another five percent plus! I've really lost
track of all of the new government programs the Democrats and
President Obama are proposing that they claim they will be able to
finance with new taxes on what they call "wealthy Americans."
And while we're talking about health care, let me explain something
else to you. I understand that possibly your biggest complaint with
our company is that we don't provide you with health insurance. That
is because as your employer I believe that it is my responsibility
to provide you with a safe workplace and a fair wage and to do all
that I can to preserve and grow this company that provides us all
with income. I no more have a responsibility to provide you with
health insurance than I do with life, auto or homeowner's insurance.
As you know, I have periodically invited agents for health insurance
companies here to provide you with information on private health
insurance plans.
The Democrats are proposing to levy yet another tax against
Carrington in the amount of 8 percent of my payroll as a penalty for
not providing you with health insurance. You should know that if
they do this I will be reducing every person's salary or hourly wage
by that same 8 percent. This will not be done to put any more money
in my pocket. It will be done to make sure that I don't suffer
financially from the Democrat's efforts to place our healthcare
under the control of the federal government. It is your health, not
mine. It is your healthcare, not mine. These are your expenses, not
mine. If you think I'm wrong about all this, I would sure love to
hear your reasoning.
Try to understand what I'm telling you here. Those people that Obama
and the Democrats call "wealthy Americans" are, in very large part,
America 's small business owners. I'm one of them. You have the
evidence, and surely you don't think that the owner of a bunch of
tire stores is anything special. That $534,000 figure on my income
tax return puts me squarely in Democrat crosshairs when it comes to
tax increases.
Let's be clear about this ... crystal clear. Any federal tax
increase on me is going to cost you money, not me. Any new taxes on
Carrington Automotive will be new taxes that you, or the people I
don't hire to staff the new stores I won't be building, will be
paying. Do you understand what I'm telling you? You've heard about
things rolling downhill, right? Fine ... then you need to know that
taxes, like that other stuff, roll downhill. Now you and I may
understand that you are not among those that the Democrats call
"wealthy Americans," but when this "tax the rich" thing comes down
you are going to be standing at the bottom of the mud slide, if you
get my drift. That's life in the big city, my friends ... where
elections have consequences.
You know our economy is very weak right now. I've pledged to get us
through this without layoffs or cuts in your wages and benefits.
It's too bad the politicians can't get us through this without
attacking our profits. To insure our survival I have to take a
substantial portion of that $534,000 and set it aside for unexpected
expenses and a worsening economy. Trouble is, the government is
eyeing that money too ... and they have the guns. If they want it,
they can take it.
I don't want to make this too long. There's a great lunch waiting
for us all. But you need to understand what's happening here. I've
worked hard for 23 years to create this business. There were many
years where I couldn't take a penny in income because every dollar
was being dedicated to expanding the business. There were tough
times when it took every dollar of revenues to replenish our
inventory and cover your paychecks. During those times I earned
nothing. If you want to see those tax returns, just let me know.
OK ... I know I'm repeating myself here. I don't hire stupid people,
and you are probably getting it now. So let me just ramble for a few
more minutes.Most Americans don't realize that when the Democrats
talk about raising taxes on people making more than $250 thousand a
year, they're talking about raising taxes on small businesses. The
U.S. Treasury Department says that six out of every ten individuals
in this country with incomes of more than $280,000 are actually
small business owners. About one-half of the income in this country
that would be subject to these increased taxes is from small
businesses like ours. Depending on how many of these wonderful new
taxes the Democrats manage to pass, this company could see its tax
burden increase by as much as $60,000. Perhaps more.
I know a lot of you voted for President Obama. A lot of you voted
for Democrats across the board. Whether you voted out of support for
some specific policies, or because you liked his slogans, you need
to learn one very valuable lesson from this election. Elections have
consequences. You might have thought it would be cool to have a
president who looks like you; or a president who is young, has a
buff body, and speaks eloquently when there's a teleprompter in the
neighborhood. Maybe you liked his promises to tax the rich. Maybe
you believed his promise not to raise taxes on people earning less
than a certain amount. Maybe you actually bought into his promise to
cut taxes on millions of Americans who actually don't pay income
taxes in the first place. Whatever the reason .. your vote had
consequences; and here they are.
Bottom line? I'm not taking this hit alone. As soon as the Democrats
manage to get their tax increases on the books, I'm going to take
steps to make sure that my family isn't affected. When you own the
business, that is what you're allowed to do. I built this business
over a period of 23 years, and I'm not going to see my family suffer
because we have a president and a congress who think that wealth is
distributed rather than earned. Any additional taxes, of whatever
description, that President Obama and the Democrats inflict on this
business will come straight out of any funds I have set aside for
expansion or pay and benefit increases. Any plans I might have had
to hire additional employees for new stores will be put aside. Any
plans for raises for the people I now have working for me will be
shelved. Year-end bonuses might well be eliminated. That may sound
rough, but that's the reality.
You're going to continue to hear a lot of anti-wealth rhetoric out
there from the media and from the left. You can chose to believe
what you wish .. .but when it comes to Carrington Automotive you
will know the truth. The books are open to any of you at any time. I
have nothing to hide. I would hope that other small business owners
out there would hold meetings like this one, but I know it won't
happen that often. One of the lessons to be learned here is that
taxes ... all taxes ... and all regulatory costs that are placed on
businesses anywhere in this country, will eventually be passed right
on down to individuals; individuals such as yourself. This hasn't
been about admonishing anyone and it hasn't been about issuing
threats. This is part of the education you should have received in
the government schools, but didn't. Class is now dismissed.
Hat Tip Wofat.
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