Increasing Business taxes will increase your purchase price

I’m amazed that so many of our elected officials obviously don’t understand or have never looked at a business Profit/Loss Statement.

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 and taxes, my equal payment of Social Security tax, Unemployment Compensation tax, local business taxes, and accounting, insurance, etc.

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

The after tax profits was what I could pay myself to 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 my 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. If you understand what I have just written you will realize that all 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 this to advise that when government agencies raise business taxes or expenses, the cost will be passed on to you. It is always a domino effect. You may not consider it a tax increase but you should.

Please consider my input when listening to politicians who are saying that they are going to reduce your taxes by increasing taxes on business. IT IS NOT REAL!

Writing the above brought back the bad memories that often overshadowed the joy of running my own business:

Final points; when we sold our business, after 20 years of hard work, the Federal Government collected a huge Capital Gains Tax. My wife cried for days. I’m not whining but someday I’ll write about how all levels of government intrude on the small business people, requiring them to spend significant effort collecting and reporting taxes and fees. The governments don’t pay you for collecting their money and seriously penalize you if you make an error or are a day late. I once spent weeks looking for data to prove that three years earlier I had made a payment on time. The Feds threatened to seize my personal and business bank accounts. They were wrong and didn’t even say they were sorry. We bailed, in disgust, after twenty years. This occurred between 1970-1990 so both political parties, unelected bureaucrats and political appointees contributed to our problems and suppressed the joy of being self employed, providing first time jobs to teenagers and providing an excellent product and service.