I live in Oregon on the West Coast, or "Left" Coast as it is often referred to, as we are a bastion of all things progressive. Progressive land use policy, progressive environmental policies, and rather progressive tax policy.
So progressive is our view on taxation that in January, my fellow citizens passed a couple measures that raised taxes on C-corps, raised personal income taxes on "the rich," and to top it off, made those tax increases retro active to January of 2009.
We had a statewide fight of epic proportions the so-called rich business owners pitted against everyone else with the pro-tax advocates arguing that it was time Oregon businesses started paying their fair share. The business community countered with ads claiming this was the worst possible time to raise taxes on anybody.
As an Oregon business owner, I was asked about 7,296 times by friends, family, employees, neighbors, and strangers on the street how those taxes impacted my business.
My answer would go something like this:
"These new taxes will have little direct impact on my business. First, being an S-Corporation, the C-Corp. increase doesn't apply to my company. Secondly, after two years of a recession, I'm definitely not "rich." And thirdly, since I barely broke even in 2009, I have no income to tax, retroactively or otherwise."
I knew what they were thinking, "Ah, ha! All those ads claiming that businesses would be harmed by these measures were lies!"
"But," I would add, "That is not to say the indirect impact won't hurt my company and my employees."
Eyebrows would raise and skeptical stares would follow but I'd cut them off with a question of my own...
"Let me ask you something. When the state retroactively taxes the only group of people left with any discretionary income to spend, will they have more or less money to spend on things like say...my granite countertops?
"Oh..." they might reply.
"And," I'd follow up, "If they have less money to spend, will they be more or less likely to spend what money they have left on the products and services that employ the vast majority of our citizens?"
"I see your point..." they might admit.
At this point you might be wondering if you'll see what Oregon's tax system has to do with fabricating granite counter tops.
Well, directly, not much. But indirectly, a lot, and the impact is all negative.
What I'm talking about is the largest tax increase in American history that will take place on January 1, 2011 if congress doesn't act.
You may have read, heard, or seen sound-bite headlines about the "Bush Tax Cuts" expiring and how letting them lapse, makes the tax code more "fair" because millionaires and billionaires will no longer benefit from lower rates.
But the reality is that the entire economy, and all its participants, benefit when tax policies favor and encourage those with disposable incomes and wealth to spend and invest.
With lower tax rates, a wealthy individual has more money left over, which obviously translates into consumer spending on non-essential luxury items. With lower tax rates a wealthy individual will be more likely to invest their money, in institutions like the leasing companies for example that make equipment purchases possible, because the return will be taxed at a lower rate.
Either way, when taxes are lower, it leaves money in the economy that is fuel for its growth. And friends, that is what we need to grow out of this recession.
Congressional elections are less than 30 days away and every candidate needs to hear the message loud and clear that raising taxes on the rich, or anyone else is a very bad idea.
So do your homework, do your research on candidates in your district and where they stand on ending or extending the "Bush" tax cuts. Then vote, vote, vote! Now, if anyone asks me, I tell them vote their conscience, vote their pocket book, and vote for a growing economy- especially the countertop industry.
Aaron J. Crowley is the founder and president of FabricatorsFriend.com, the exclusive promoter of Stone Sleeve fabricator sleeves and Bullet Proof aprons.
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