Politician Tax Proposals

The following was published as a "Letter to the Editor" in my local newspaper following the 2008 Presedential election.
I'm sure you have noticed the massive increase in the cost of food and gasoline. The following will help explain one of the reasons for the increased cost of living.

Politician Tax Proposals

I’m amazed that elected officials who are proposing tax plans don’t understand a business Profit/Loss Statements.

I owned a Dairy Queen Brazier. Every month I prepared a Profit or Loss (P/L) Statement. The first line on my P/L was the amount of money that came into the business. The rest of the lines were money- out expenses for items like material, labor, utilities, government fees, royalty, advertising, my equal payment of Social Security tax, Unemployment Compensation tax, local business taxes, accounting, insurance, etc.

If things went well and my income exceeded expenses, I made a profit. The governments, Federal, State, and local, taxed my profit.

If there was an after tax profit I could pay myself and support my family. Of course the Governments taxed the salary I paid myself.

The “income redistribution” folks may find this dreadful but when any government agency increased taxes or operating expenses, I raised my prices. I hope you understand that my prices had to be competitive, but I was in business to provide an income for my family. My suppliers, utilities and service providers, etc, also had their costs go up for the same reasons.  They passed increased costs on to me, requiring me to further raise prices.

I’m writing to advise that when government agencies raise business taxes or expenses, the cost will be passed on to you. You may not consider it a tax increase but you should.

Please consider my input when listening to politicians who are telling you they are going to reduce your taxes by increasing taxes on business. That is “smoke and mirrors”.