How To Raise Taxes

30 06 2012

I have never claimed to be the sharpest tool in the shed but I believe I can think logically so let me give you some of my thoughts and see if you agree. (That I can think logically, not my thoughts.)

Jamie and I are throwing around the idea of hiring an employee. As of right now we have decided not do it for two reasons. The first is all the loops and hoops that needed to be jumped through that end up costing someone who wants to hire someone else twice as much as you want to pay the person. The second reason is because of our success running our own business we have jumped into a higher tax bracket resulting in us not being able to keep a good portion of the money we worked hard to make. Thus we can’t spend it where and on what we see fit.

Here’s what I was thinking. If I was able to keep more of the money that I earned, I would hire an employee who who then would not only be taxed on that income, but then would use that income to go buy things from other people and company’s resulting in more money stimulating our economy. I have a friend who makes much more more money than I and wants to hire three employees but for much of the same reasons is only able to higher one. Imagine how much taxes would be coming in if three people who currently don’t have jobs were working!

Sam Walton had a revolutionary idea of lower prices/higher volume and he made up loss of profit in one item with the sheer mass of what was sold because people would buy more. With the same idea, imagine lower taxes, more people spending/employing people, which results in overall more taxes being able to be taken in and more things being bought. At first there would be less taxes coming in but much like Walton it would be made up by the mass of people being employed and spending that money on things they can now afford to buy.

I don’t know, maybe I’m not smart enough in this area because I’m in the hunt of life living in it everyday. When I was teaching I had an administrator who hadn’t taught in the classroom for over 20 years tell how I should be doing things. Those ideas didn’t make much sense or work but heck, she was the person in charge and shouldn’t she know what’s best for the overall good of the school?

Like I said in the beginning, maybe my lack of sharp tools is not allowing me to think clearly on this concept. If you stumble across this article and have an idea that either agrees with me or can set me straight feel free to share your thoughts because right about now, with everything that’s happening in our world, I sure could use some ideas from clear thinking people.

Steve Leurquin

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41 responses

30 08 2012
1 Year!!! « Steve Leurquin Excellence in Living

[…] How To Raise Taxes (40) […]

12 08 2012
John Vreeland

We HAVE to get to one million… AND FAST!!!! The movie “Unstoppable” came to mind when I read this posting. As a like minded team, we will gain momentum, latch onto this “runaway train” and pull it back from the brink of destruction. Just imagine the growth of the business which will result from this action and lives, jobs, etc. which will be saved!

8 07 2012
Kevin Hamm

Great post Steve, I will endeavor to answer your question and perhaps give you an idea to kick around. In my S business, I once employed as many as 7 people which absorbed 35 to 40% of total revenue after taxes, benefits and workman’s comp. My problem was that I was not profitable in that capacity, which ultimately pushed me to the brink of bankruptcy. In the last 3.5 years I have developed a contractor model and now carry no employees and complete as much work as when I had 3 employees. I use various independent contractors to complete the work. Over all the costs are lower than when I had employees. Contractors are costing about 15 to 20% of total revenue currently. What I like about this model is that I am helping others become independent(s) as Thomas Jefferson would have wanted. The more independent(s) we have in our nation, the more independence we will maintain. The work per $ invested in a independent contractor is by far greater than the work I got from employees. Independents have ownership. The money paid to contractors, as well as employees, in my S business is all tax deductible as a business expense. I am not sure of the tax savings on house hold services, but I believe there is some. Certainly any services you retained for business activities would be tax deductible. The idea to explore in your case would be the value of hiring a trusted individual as an independent contractor. They would of course have a business entity with liability insurance (about $500/year for a small independent). This trusted person, perhaps someone from your community, could provide services for multiple people both in your community and without, thus being a true contractor and not an employee. This would allow your money to go to someone you had a personal interest in, but would actually allow them to maintain their autonomy as an independent. We have been fooled by the industrial age into thinking that creating more dependent employees is good for our economy. Creating more independents who have more autonomy and more control of their money should be the goal. It is the goal of LIFE and I have applied that goal to my S business as well. I hope that is helpful

Kevin Hamm

8 07 2012
steveleurquin1

Sure is! Thanks for the insight Kevin.

5 07 2012
gregjohnson on leadership

Steve,

Very good article. Simple. To the Point.

5 07 2012
steveleurquin1

Thank you Greg.

5 07 2012
Kelli Sager

Steve , you are right on .Unfortunately this is too simple of an explanation for our government . They would have to tear it apart , examine it , have 10 different departments rip it apart , and then throw some red tape in ! Don’t get me wrong , I love this country , we just need to stop complicating everything and get back to what’s most important for ” we the people ”
Kelli Sager

5 07 2012
steveleurquin1

Remember when we were kids and things seemed so simple?

7 07 2012
David

I do remember that far back! Things did seem much simpler back then like the difference between right & wrong – the right choices weren’t always made but we did know the difference. It’s a little different today & Kelli gives some insight as to why. And I think you do think logically.

5 07 2012
adamrossman

Good point Kelli!

5 07 2012
steveleurquin1

Why does this seem to be such a simple thing to solve but yet it’s not happening?

4 07 2012
Mary Konczal

Steve you are right on, in your thinking and since I’ve joined this Team I’ve thought several time’s how would one get an appointment with the President? It seems to me the only way for the US to get back on track is to start applying the principals we learn. What if? What if Obama would see Orrin? We’re gonna need the BIg guns on this one . What if.. , I could see the all the P.C.’s in there teaching him and all his Congress men and Senator’s . Wow. Dream Big that’s what I’ve been taught.

4 07 2012
steveleurquin1

That would be great! I would only pray that both parties would listen.

3 07 2012
Justin Zautner

You seem like a pretty sharp tool to me! Oh jeepers! Only if more politicians read your blog! The logic is sound, but unfortunately America is broke now and unwilling to make any sacrifices. Long term vision and delayed gratification? Are those terms even part of American vocabulary? There’s a Freedom Shift on the horizon on our way to 1 Million People! I’m excited to see what the future holds now knowing there are more rascals out there like yourself. Keep leading the way!

4 07 2012
steveleurquin1

“Jeepers” now there is a term I haven’t heard in awhile!

Pulling the band-aid off fast is always the best way. The principle is the same.

3 07 2012
Valerie

This is an excellent post- now we just need Washington to wake up and listen to you! As always, you make an incredibly erudite, valid point in a form that anyone is able to understand. Thanks you!

4 07 2012
steveleurquin1

Thank you for the comment Valerie.

2 07 2012
Dave Stadel (@davestadel)

The irony that you point out is how beneficial the choice would be. You want to make the choice to free up some of your time in order to add more value to your family and community. The way to do that is by employing someone else to do some of tasks you are currently strapped with. You are trying to create a win-win-win….a win for you & your family, the community, and the new employee. The problem is you can’t because the choice to employ someone else has been taken away from you by people subscribing to the theory that big government and big institutions are the answer. They fund this flawed agenda through the progressive (us vs. them) tax system.

The progressive tax system in America (land of the free) has impeded your freedom. The tax system has made it more difficult for you to experience more personal freedom(time), for you to influence the community positively, and for you to ‘pay forward’ the rewards of working hard to earn choices through employment by someone else.

It’s a sad tale…thankfully it’s going to get turned around.

2 07 2012
steveleurquin1

Very good explanation Dave! Thanks for your great input.

2 07 2012
Teesa Rossman

I enjoyed reading this short, but sweet article, Steve. Unfortunately, simplicity is not always appreciated by either the “classes” or the “masses”. Thankfully, many of us are becoming “systems thinkers”, thus educating others in the way of truth. More systems thinking = less living “off of the system” aka government/state.

2 07 2012
steveleurquin1

Thanks for the feedback Teesa. I am glad that you enjoyed the article.

2 07 2012
steveleurquin1

I knew what you meant TIm. People who have worked hard for their success most often know where there blessings come from and continue to be a blessing. When things are just given to people I believe that is where the true selfishness comes from because a scarcity mentality is learned.

2 07 2012
adamrossman

Good point! I’ve even started to notice that with children that are given fancy things over and over without having to earn them. They are selfish about ‘their’ stuff and greedy for more. What would happen to a grown up that is handed everything by the government?

2 07 2012
steveleurquin1

When going to college there was a difference between the people who paid their own way and the people who had their college paid for when you looked at how many classes they skipped!

2 07 2012
Teesa Rossman

I agree with you, Adam (and not just because you are my husband.). It seems that children/people who are given things freely begin to have a sense of “entitlement”. Over and over we here about “my rights” in the media….what are the people doing to preserve their so-called “rights”?

1 07 2012
Gary Severson

Steve, as usual, your articles always get the gears turning in this head of mine! You have a great way of breaking things down so your readers can gain perspective in such crucial areas of life. After reading this particular article, it was almost painful to confront the brutal reality of it all. The system is broke and it’s going to take the critical thinkers to rise above it all and do something about it. This article reminds me of an article that Orrin Woodward posted in his blog some time back, that really opened my eyes to the fact that something just isn’t right in this country and I appreciate you for this all important reminder. Thanks for sharing your thoughts and giving others out there an avenue in which to do the same!
Here’s a link to Orrin’s article:

http://orrinwoodwardpress.typepad.com/my_weblog/2012/05/the-little-red-hen-productivity.html#comments

2 07 2012
steveleurquin1

That is a great article on productivity! Thanks for finding it and linking to it for everybody to read.

2 07 2012
adamrossman

Gary, what is this ‘critical thinker’ you speak of? Is that something different than just following the herd mentality and trying to please those around you?

🙂

4 07 2012
Steve Sager

Don’t mess with the little red hen!!

4 07 2012
steveleurquin1

Great story!

1 07 2012
Mike and Emily Hebbe

Great post S! It sounds so simple that you would think anyone in an upper position would find it and run. Oh thats right it takes leadership thinking to understand Win Win!!!! Way to lay it out there in the most understandable way!

2 07 2012
steveleurquin1

It does sound simple. The hard part is early on people would have to make sacrifices that would be difficult. But just like starting a new exercise program that seems tough, eventually once the body gets moving the whole process becomes easier and easier and you start feeling better and everything starts working better.

1 07 2012
Tony Klubertanz

Your thought process makes 100% sense to me Steve. The counter to your point, I believe, is that your scenario is typically not what happens in the “real world”. Typically, it is argued, the wealthy line their pockets and spend their money on their high priced luxuries and forget where they came from. My thought on that is simple…socialism just doesn’t sound like the right answer for our country. Happy Independence Week!

2 07 2012
steveleurquin1

I know some of the “wealthy” and they give so much back to society.

30 06 2012
adamrossman

It if worked (still works) for the Waltons – I don’t see why it wouldn’t work for our country as well.

Good thinking!!

2 07 2012
steveleurquin1

So much can be learned from the Waltons!

30 06 2012
Kristen Seidl

Your thoughts are very clear Steve! If only there was a way to spread this truth to the masses 😉 While I know it won’t change much that’s going on in Washington we do have an answer for those unemployed citizens who are looking for a chance at controlling their financial future. Who knows, when we go to millions of people maybe our politicians will start to think logically too. One can only hope! Thanks for leading!

1 07 2012
billswisdom

I’ll have to agree with you Kristen and you too Steve. It’s so refreshing to know there is a way to solve some of the seemingly crazy way the current system works. Do you think maybe the politicians could use MFC or what?
Sure glad to have leaders like the both of you.

2 07 2012
steveleurquin1

Thanks Bill. It is refreshing to know that people are reading and thinking again.

30 06 2012
Tim Braund

Awesome article Steve. I wish our politicians had your thinking; this country would be a lot better off! It’s. Amazing how uncommon comments sense is. Thank you for being the man of strength and character that you are.

30 06 2012
Tim Braund

I meant common not comments

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