Brain-Jockey

A Mad Hatter’s Summer of Events

Written by Audrie Zettick on July 13, 2009

Like Alice at the Mad Hatter’s tea party, taxpayers have recently been assaulted with many wish-it-weren’t-for-real events that make me watch for the white rabbit.  It’s been a Wonderland of events and characters.  Among them:

Queen of Hearts: Nancy Pelosi.  Politico recounts how she “whipped” together the votes for Cap and Trade, replacing “off with their heads” with dogged, in-your-face (and perhaps other body parts) persistence.  Worried more about her reputation than the content of the bill, witnesses recounted that she and her sidekicks even surrounded one holdout–Rep. Joe Baca–who then (surprise!) voted in favor of Cap and Trade.   No wonder Congressman Ciro Rodriguez sprinted like a rabbit out of the House chamber after surprising Pelosi with a “no” vote. 

The Card-Deck Queen’s Men–The eight Republican Congressmen–called jellyfish by Deroy Murdock but who more resemble the cowed cards–who enabled the House to pass Cap and Tax.   They fell flat on their faces when the Queen appeared, but these Congressmen plus others in vulnerable districts will be trying to paint the roses red as they attempt to cover up their mistakes.

Tweedle Dee, Tweedle Dum and Even More Dum: Some of my home state Congressmen who voted for Cap and Trade in spite of the fact that PA gets a majority of its electricity from coal (great editorial here).  It’s been estimated that Pennsylvanians will see over a $3,000 hike in annual electricity fees.  Here’s an estimated impact by Congressional District.

The Caucus Race (click here if you don’t remember this part of the story), represented by the G8 and especially India and China on climate change.  In Alice’s story, the animals, led on by the DoDo, have a nonsensical race ending in everyone getting meaningless prizes, with Alice finding her own prize, which she gives to DoDo who presents it back to her.  Yeah, we may be a high consumption society, but it’s our economy and innovations that have given much of the world the freedoms and standards of living that have grown from development.  Having the U.S. commit to harsher standards while India and China go nearly full speed ahead with development is an absurd gesture. Maybe we should all ride bicycles like they do in China.   

Plus, even though Climate Change Happens, even THINKING that anything we do will make any meaningful impact on Global climate change is the absurdest gesture of all.  The G8 nations committed to limiting global warming (by reducing carbon emissions) to no more than two degrees.  A large volcanic explosion could do just that and more (will they claim success?).  A closer look at Climate Change science and models shows that all the pain caused to our economy by legislation like Cap and Trade is much greater than the impact on the environment.

The Dodo: New York Times columnist Paul Krugman.  He is emphatic that global warming is a bigger threat to America than terrorism.   Enough said.

Cheshire Cat: played by Obama.  I considered casting him as the White Rabbit, since you can argue that the American public followed him down the rabbit hole.  The Cheshire Cat might be more appropriate, as this character appears to be wise, yet Alice never knows if the cat is really steering her wrong.  

Recent White House policy on Iran was every bit as perplexing as anything the Cheshire Cat said to Alice.  In spite of the recent election-sparked violence in Iran, Iranian officials were originally invited to our July 4 celebration–first time they’ve been invited since the Iranian Revolution.  Then they were disinvited.  Of course, this was after it was clear they weren’t intending to show up anyway.  In Wonderland, this all makes perfect sense. 

And proposed health care reform that claims to allow that we keep private insurance while all but ensuring disappearance of private plans is, well, perfectly sensible too.

Czar of Czars: Obama.  Maybe we need a remake of Wonderland, featuring the Czar of Czars instead of the Queen of Hearts.   ”With President Obama, the CZAR business has not only picked up.. It has been put on Steroids, Human Growth Hormones, Protein Shakes, Speed, and Epinephrine Shots.”  Motley Fool

“Drink Me” potion:  Alas, we the American people are at fault, willing to drink whatever comes our way if it looks to benefit us, darn the consequences.  Growth of Big Government is the result. As Robert Samuelson recently noted: “Without anyone much noticing, our national government is on the verge of a permanent expansion that would endure long after the present economic crisis has (presumably) passed and that would exceed anything ever experienced in peacetime.”  

Time to pull ourselves out of the Rabbit hole with a dose of reality.  I wish I’d wake up.

Who Wasn’t In The Room: Small Business Taxpayers

Written by Audrie Zettick on March 19, 2009

Business titans (or at least those with titanic salaries) stood elbow to elbow with President Barack Obama in January, part of the lobbying of the American public aimed at convincing us that indeed, business is behind his efforts to stimulate the economy. More recently, the President spoke to the Business Roundtable, another bastion of high-level, Fortune 500 CEOs. 

But it’s the elbow grease of American small business that’s not only kept this economy humming in the past, but kept us true to our traditions of self-determination and independence.  What qualifies as a small business differs depending upon what industry you are in and who is doing the defining. (Example: the SBA considers a telecommunications reseller with up to 1500 employees a “small” business although generally the top break is at 500 employees). What I am talking about is the meat and potatoes of small business–the more than 60% of businesses with zero to four employees.    

Failure to see things from a small business perspective is a bipartisan issue.  My own family’s experience speaks volumes.  Through Democrat and Republican administrations, we couldn’t fully deduct health care premiums, had to spend time figuring out how to adjust books for new tax tweaks and spent much more than we’d like on CPAs (a worthy profession, but really, I’d rather keep the cost down).  And don’t get me started on the voluminous paperwork and phone calls when (not if) we get a notice from the government indicating a payment error–which to date has always been an error on their part.

The past month, I’ve been phasing out our family promotional products business.  We’ve been in business since 1965–thriving much of that time.  But since my mother’s death 5 years ago, we’d been in a “holding” mode as I helped my 81-year-old dad from a distance (unlike when I was fully committed to the business in the 1980s).  I SHOULD be focused on helping our new owner “work” our client accounts, since payment for the sale is based on a monthly percentage of the sales from our existing clients.  Instead, I’m focused on administration.  I have an MBA.  How hard could that be?    

The list of taxes I’m dealing with is daunting.  Federal Withholding, Medicare, Social Security, Pennsylvania Withholding, Pennsylvania Sales Tax, Federal Unemployment and PA Workers Compensation, and local nuisance taxes (that require quarterly filing, even if we don’t owe a dime).  And we only had one employee at the time of the sale.  Like many small business owners, over the years we’ve found that complying with various local, state, federal tax and regulatory issues takes up more of our time than we’d like, keeping us from expanding our businesses.

I’m ever hopeful that the Obama Administration might do right by small business. This week he DID get the attention of some small business owners by proposing to use $15 million in TARP money to get credit flowing for small business.  It’s a worthy objective.  In layman’s terms, Obama’s recent initiative uses funds to buy SBA-backed loans and get them off the banks’ books, allowing banks to lend again. However, the stimulus package already has increased SBA-backing of the loans themselves to 90% from 75%–making me wary considering the recent track record on other programs (wasn’t the initial bailout sold to us with the intent to get bad mortgages off the books of financial institutions and didn’t we get into this economic mess because of mortage lending to risky borrowers?).  

Still, add to this his recent announcement to allow small businesses to get a larger tax break for losses  and it seems headed in the right direction.  But the actions still miss the point.    

Most of us who own small businesses don’t apply for SBA-backed loans and don’t intentionally try to lose money.  The average small business owner isn’t going to apply even for the basic SBA loan, which requires all owners of 20% or more of the business to personally guarantee the loan.  SBA loans are structured to spread the risk around (as they should be), with SBA working through local commercial institutions, and the borrower, lending institution and the SBA–in theory–all assuming risk (although this has altered under TARP).  In this economy, it’s understandable–and responsible–if both the lenders and the borrowers batten down the hatches, so to speak.

Whether we are a stay-at-home mom with an online business or the local plumber, we are more concerned with the financial balancing act: investing our proceeds into the business versus keeping enough self-employment tax funds in our checking account to pay our quarterly taxes.  After all, we get the pleasure of withholding (and then forwarding) the federal taxes deducted (like all employees) but paying the matching portion of these same taxes as the “employer.” 

Perhaps President Obama should have invited some of these folks below into his inner circle on small business. 

“My business doubled last year. I think we would all be better off if the government gave us our taxes back and let us invest the money as we saw fit in our own businesses. I’m creating prosperity for myself and others everyday…the federal government is just getting in the way of progress.”     Augustine 25

 

“Wouldn’t it be better just to cut their tax burden? By burden I mean both the taxes paid and the complexity dealing with tax code. When you need a lawyer and an accountant just to make sure you’re following the law, the law is too complex.”  Dan

 

I hear you, brothers. 

Can you say that with a straight face?

Written by Audrie Zettick on January 14, 2009

At both the national and state levels, I find democrats making statements so outlandish it’s hard to believe they do it with a straight face. 

At the national level, the nomination of Timothy Geithner as Treasury Secretary continues, despite his late payment of taxes (some uncovered during the vetting process for the nomination, some known earlier).  Now an effort to expedite the nomination process has moved forward resulting in a hearing scheduled for this Friday-with less than the 7 days notice required.  

• Max Baucus, Senate Finance Chair, is still supporting Geithner’s nomination.  Somehow this all fits the Obama mission of “change.”  Obama spokesperson  Robert Gibbs says Geithner is the “right person.” (Sounds like more of the same to me.)

At the state level, Pennsylvania Governor Ed Rendell ignored his own hiring freeze-instituted because of a projected budget deficit of $1.6 billion —creating a new position for an ousted state representative.   Dan Surra will receive $95,000 in annual salary as an advisor for “Pennsylvania Wilds,” a tourism program.      Like many of his brethren, he lost re-election last year, likely due to support in 2005 for a 16-34% legislative pay raise. 

• Rendell’s press secretary said this was not a make work post for an out of work politician and that it’s a wise investment. He went on to say, “it would have been tragic to allow that much talent to disappear from public service.”   (Must do wonders for state government employee morale.)

All presumably said with a straight face. 

Obama: Dodging the Tough Issues Through Resignation

Written by Bill Schaller on November 13, 2008

At this time, is Obama more effective as a Senator or as a President-elect?