No Business Acumen!

Sorry I've been off the blog for a while ... I've been sitting back and taking things in. This Joe the plumber got me out of my chair.

Of course I don't know Joe, but I bet we would hit it off just fine. I'll take cutting to the chase over "elegant" any day. As soon as Joe, this middle class working American who wants a better life for himself asks a perfectly legitimate question of Sen. Obama--when the Presidential candidate comes to his neighborhood--he's held in high regard for a couple of days, and is now a "target" for what should be obvious by now is a left wing national media. He's making intelligent points people can understand, and those points won't incline them to support "The Chosen One".

What really rubs me the wrong way is how Joe is getting belittled by the very people who boast they look out for the "middle class American." Both Obama and Biden proclaimed that they don't know of any plumber who makes $250,000 a year. Apparently, they have no idea what it takes to run a small business--no business acumen. Perhaps they are thinking of people like me who supplement my primary job with a "home business". I'm talking about the small businesses who actually give people jobs and depend on it for their livelihood. Big difference.

Now I don't run a small business myself; however, I have managed projects within my job that were at least $125K. The skills required for managing a task like that are not all that different between managing $50K or $500K--the differences are in time, staff needs, and of course the funding. Based on my own experience, where I am having to manage down to the last dime, running a small business can easily require $250,000 a year or more.

What Obama and Biden don't want people to know--or are completely ignorant of--is this thing called overhead. Starting out, Joe may want to buy into a franchise, which will be an up front cost of 5 digits, pushing 6 in some cases. Over time, he will have to pay that off. He will have to hire, train (possibly), and equip staff. He will have to provide them benefits, and he will pay half of their Social Security tax. (I'm sure there is more, but you get the idea). All of this gets rolled into the fee charged per hour or per job. And don't forget profit ... Yes, profit will enable Joe's business to grow because if he is a smart business man, he won't hoard his earnings, but use them to better his company through keeping his assets current or give a plumber a job.

I've concluded by observation that liberals think business owners will hoard their profit, conservatives think business owners will grow their business as their profit grows. Following this logic, liberals will then raise the taxes on business owners, thinking they will just collect that "excess" profit ... but what happens? Prices go up, as you the taxpayer pay that extra tax, or someone will lose a job "in the name of taxes". I can see competition creating the willingness to take a profit hit, but not much beyond that.

Joe the plumber made a good point about this $250K limit. People who make $150K make a lot of money, too, so why not use that value? How about $100K? What's to keep the government from getting on this slippery slope? I'll answer that: Us. On election day.

On a closing note, this artificial ceiling of $250K is a ceiling on the human spirit. What's the incentive to grow a business past $250K? Once you get there, you will have to work really hard to get past the hump of just entering the "upper tier" before you see the same level of profit as before. Whatever "ceiling" is set, people will continue to work and grow their businesses, not because of the government looking out for them, but in spite of them.