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  1. #1
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    Now who's getting scammed!!?

    Hey,

    I picked this up from FaceBook, from Oxyfresh CEO Richard Brooke...

    I hope you get something out of it, I know I did.

    B&M business' do have their challenges!

    From the sounds of it, we're ALL getting scammed.

    Half a million a year for a 'small business' ain't what it used to be apparently!

    Kerry
    ~~~~~~~~~~~~~~~~~~~~~
    THE EMPLOYEE MEETING........ FISCAL IRRESPONSIBILITY

    THIS IS NOT A MESSAGE AGAINST DEMOCRATS OR OUR PRESIDENT. THERE ARE LOTS OF RESPONSIBLE DEMOCRATS AND OUR PRESIDENT HAS LOTS OF POWERFUL QUALITIES THAT PREVIOUS PRESIDENTS DID NOT HAVE. AND HE PRIMARILY GOT HIMSELF ELECTED ON A PLATFORM OF WHAT I CALL "FISCAL IRRESPONSIBILITY".

    The Employee Meeting:

    I would like to start by thanking you for attending this meeting, though it's not like you had much of a choice. After all, attendance was mandatory. I'm also glad many of you accepted my invitation to your family members to be here as well. I have a few remarks to make to all of you, and then we'll retire to the ballroom for a great lunch and some employee awards.

    I felt that this meeting was important enough to close all 12 of our tire and automotive shops today so that you could be here. To reassure you, everybody is being paid for the day --- except me. Since our stores are closed we're making no money. That economic loss is mine to sustain. Carrington Automotive has 157 full time employees and around 30 additional part-timers. All of you are here. I thank you for that.

    When you walked into this auditorium you were handed a rather thick 78-page document. Many of you have already taken a peek. You were probably surprised to see that it's my personal tax return for 2008. Those of you who are adept at reading these tax returns will see that last year my taxable income was $534,000. Now I'm sure this seems rather high to many of you. So ... let's talk about this tax return.

    Carrington Automotive Enterprises is what we call a Sub-S - a Subchapter S corporation. The name comes from a particular part of our tax code. Sub-S status means that the income from all 12 of our stores is reported on my personal tax return. Businesses that report their income on the owner's personal tax return are referred to as "small businesses." So, you see now that this $534,000 is really the total taxable income - the total combined profit from all 12 of our stores. That works out to an average of a bit over $44,000 per store.

    Why did I feel it important for you to see my actual 2008 tax return? Well, there's a lot of rhetoric being thrown around today about taxes, small businesses and rich people. To the people in charge in Washington right now I'm a wealthy American making over a half-million dollars a year. Most Americans would agree: I'm just another rich guy; after all ... I had over a half-million in income last year, right? In this room we know that the reality is that I'm a small business owner who runs 12 retail establishments and employs 187 people. Now here's something that shouldn't surprise you, but it will: Just under 100 percent .. Make that 99.7 percent of all employers in this country are small businesses, just like ours.

    Every one of these businesses reports their income on a personal income tax return. You need to understand that small businesses like ours are responsible for about 80 percent of all private sector jobs in this ountry, and about 70 percent of all jobs that have been created over the last year. You also need to know that when you hear some politician talking about rich people who earn over $200,000 or $500,000 a year, they're talking about the people who create the jobs.

    The people who are now running the show in Washington have been talking for months about raising taxes on wealthy Americans.. I already know that in two years my federal income taxes are going to go up by about 4.5 percent. That happens when Obama and the Democrats allow the Bush tax cuts to expire. When my taxes climb by 4.5 percent the Democrats will be on television saying that this really isn't a tax increase. They'll explain that the Bush tax cuts have expired .. Nothing more. Here at Carrington we'll know that almost 5% has been taken right off of our bottom line. And that means it will be coming off your bottom line.

    Numbers are boring, I know ... But let's talk a bit more about that $534,000. That's the money that was left last year from company revenues after I paid all of the salaries and expenses of running this business. Now I could have kept every penny of that for myself, but that would have left us with nothing to grow our business, to attract new customers and to hire new employees. You're aware that we've been talking about opening new stores in Virginia Beach and Newport News . To do that I will have to buy or lease property, construct a building and purchase inventory. I also have to hire additional people to work in those stores. These people wouldn't immediately be earning their pay. So, where do you think the money for all of this comes from? Right out of our profits .. Right out of that $534,000. I need to advertise to bring Customers in, especially in these tough times. Where do you think that money comes from? Oh sure, I can count it as an expense when I file my next income tax return, but for right now that comes from either current revenues or last year's profits. Revenues right now aren't all that hot ... so do the math. A good effective advertising campaign might cost us more than $300,000.

    Is this all starting to come together for you now?

    Right now the Democrats are pushing a nationalized health care plan that, depending on who's doing the talking, will add anywhere from another two percent to an additional 4.6 percent to my taxes. If I add a few more stores, which I would like to do, and if the economy improves, my taxable income ... our business income ... could go over one million dollars! If that happens the Democrats have yet another tax waiting, another five percent plus! I've really lost track of all of the new government programs the Democrats and President Obama are proposing that they claim they will be able to finance with new taxes on what they call "wealthy Americans.."

    And while we're talking about health care, let me explain something else to you. I understand that possibly your biggest complaint with our company is that we don't provide you with health insurance. That is because as your employer, I believe that it is my responsibility to provide you with a safe workplace and a fair wage and to do all that I can to preserve and grow this company that provides us all with income. I no more have a responsibility to provide you with health insurance than I do with life, auto or homeowner's insurance. As you know, I have periodically invited agents for health insurance companies here to provide you with information on private health insurance plans.

    The Democrats are proposing to levy yet another tax against Carrington in the amount of 8 percent of my payroll as a penalty for not providing you with health insurance. You should know that if they do this I will be reducing every person's salary or hourly wage by that same 8 percent. This will not be done to put any more money in my pocket. It will be done to make sure that I don't suffer financially from the Democrat's efforts to place our healthcare under the control of the federal government. It is your health, not mine. It is your healthcare, not mine. These are your expenses, not mine. If you think I'm wrong about all this, I would sure love to hear your reasoning.

    Try to understand what I'm telling you here. Those people that Obama and the Democrats call "wealthy Americans" are, in very large part, America 's small business owners. I'm one of them. You have the evidence, and surely you don't think that the owner of a bunch of tire stores is anything special. That $534,000 figure on my income tax return puts me squarely in Democrat crosshairs when it comes to tax increases.

    Let's be clear about this ... crystal clear. Any federal tax increase on me is going to cost you money, not me. Any new taxes on Carrington Automotive will be new taxes that you, or the people I don't hire to staff the new stores I won't be building, will be paying. Do you understand what I'm telling you? You've heard about things rolling downhill, right? Fine .. then you need to know that taxes, like that other stuff, roll downhill. Now you and I may understand that you are not among those that the Democrats call "wealthy Americans," but when this "tax the rich" thing comes down you are going to be standing at the bottom of the mud slide, if you get my drift. That's life in the big city, my friends ... where elections have consequences.

    You know our economy is very weak right now. I've pledged to get us through this without layoffs or cuts in your wages and benefits. It's too bad the politicians can't get us through this without attacking our profits. To insure our survival I have to take a substantial portion of that $534,000 and set it aside for unexpected expenses and a worsening economy. Trouble is, the government is eyeing that money too ... and they have the guns. If they want it, they can take it.

    I don't want to make this too long. There's a great lunch waiting for us all. But you need to understand what's happening here. I've worked hard for 23 years to create this business. There were many years where I couldn't take a penny in income because every dollar was being dedicated to expanding the business. There were tough times when it took every dollar of revenues to replenish our inventory and cover your paychecks. During those times I earned nothing. If you want to see those tax returns, just let me know.

    OK ... I know I'm repeating myself here. I don't hire stupid people, and you are probably getting it now. So let me just ramble for a few more minutes. Most Americans don't realize that when the Democrats talk about raising taxes on people making more than $250,000 a year, they're talking about raising taxes on small businesses. The U.S. Treasury Department says that six out of every ten individuals in this country with incomes of more than $280,000 are actually small business owners. About one-half of the income in this country that would be subject to these increased taxes is from small businesses like ours. Depending on how many of these wonderful new taxes the Democrats manage to pass, this company could see its tax burden increase by as much as $60,000. Perhaps more.

    I know a lot of you voted for President Obama. A lot of you voted for Democrats across the board. Whether you voted out of support for some specific policies, or because you liked his slogans, you need to learn one very valuable lesson from this election. Elections have consequences. You might have thought it would be cool to have a president who looks like you;or a president who is young, has a buffed body, and speaks eloquently when there's a teleprompter in the neighborhood. Maybe you liked his promises to tax the rich. Maybe you believed his promise not to raise taxes on people earning less than a certain amount. Maybe you actually bought into his promise to cut taxes on millions of Americans who actually don't pay income taxes in the first place. Whatever the reason .. your vote had consequences; and here they are.

    Bottom line? I'm not taking this hit alone. As soon as the Democrats manage to get their tax increases on the books, I'm going to take steps to make sure that my family isn't affected. When you own the business, that is what you're allowed to do. I built this business over a period of 23 years, and I'm not going to see my family suffer because we have a president and a congress who think that wealth is distributed rather than earned. Any additional taxes, of whatever description, that President Obama and the Democrats inflict on this business will come straight out of any funds I have set aside for expansion or pay and benefit increases. Any plans I might have had to hire additional employees for new stores will be put aside. Any plans for raises for the people I now have working for me will be shelved. Year-end bonuses might well be eliminated. That may sound rough, but that's
    the reality.

    You're going to continue to hear a lot of anti-wealth rhetoric out there from the media and from the left. You can chose to believe what you wish .. ..but when it comes to Carrington Automotive you will know the truth. The books are open to any of you at any time. I have nothing to hide. I would hope that other small business owners out there would hold meetings like this one, but I know it won't happen that often. One of the lessons to be learned here is that taxes ... all taxes ... and all regulatory costs that are placed on businesses anywhere in this country, will eventually be passed right on down to individuals; individuals such as yourself. This hasn't been about admonishing anyone and it hasn't been about issuing threats. This is part! of the education you should have received in the government schools, but didn't.

    Class is now dismissed.

    I place economy among the first and most important virtues, and public debt as the greatest danger to be feared. To preserve our independence, we must not let our leaders load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we run into such debts, we must be taxed in our meat and drink, in our necessities and in our comforts, in our labors and our amusements. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy. The same prudence which in private life would forbid our paying money for unexplained projects forbids its disposition of public money.

    ~ Thomas Jefferson
    ~~~~~~~~~~~~~~~

    MLM, is the least of this countries worries, by a long shot...ing1:

    Kerry Hein
    As long as it is acceptable for a person to beLIEve that he knows how god wants everyone on Earth to live, we will continue to murder one another on account of our myths. ~ Sam Harris, 'The End Of Faith'
    ~~~~~
    Christianity demands the crucifixion of the intellect.
    ~ Susan Kierkegaard

  2. #2
    Join Date
    Mar 2007
    Location
    Texas
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    819

    Re: Now who's getting scammed!!?

    Wow... Fake letter, but OK..

    Someone has been listening to Rush a little too much...
    Len Who?? Who is this Len character you guys keep talking about?

  3. #3
    Join Date
    Sep 2005
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    Mars
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    Re: Now who's getting scammed!!?

    Wait, 99% are getting a paycheck. The owner is facing some challenges, but making a living wage to be sure. If it were an MLM 97% working the business would be losing money. What is your point?????

    Soapboxmom

  4. #4
    Join Date
    Sep 2008
    Posts
    188

    Re: Now who's getting scammed!!?

    To see how much reality there is in this "meeting", go to FactCheck.org. They do as good a job as anyone in digging out the actual facts.

    For starters, if he's taking salaries for employees, advertising expenses, building expenses for new branches, and so forth out of that $534,000, it's not "profit" and he won't have to pay taxes on all the money he spends for those things. Furthermore, not all "small businesses" are Schedule C or Sub-chapter S companies. There are many full corporations that fall into the "small business" category. In those companies, the directors, managers, and CEO's always have the choice to spend more of the" profits" so that they don't have to pay taxes on them. This is one form of investment.

    I guess what I'm saying is that the explanation this guy is giving to his employees is just way too simplistic. It in no way represents what will really happen.
    Last edited by Juulie Downs; 10-21-2009 at 08:40 PM.

  5. #5
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    Re: Now who's getting scammed!!?

    Quote Originally Posted by Juulie Downs View Post
    To see how much reality there is in this "meeting", go to FactCheck.org. They do as good a job as anyone in digging out the actual facts.

    For starters, if he's taking salaries for employees, advertising expenses, building expenses for new branches, and so forth out of that $534,000, it's not "profit" and he won't have to pay taxes on all the money he spends for those things. Furthermore, not all "small businesses" are Schedule C or Sub-chapter S companies. There are many full corporations that fall into the "small business" category. In those companies, the directors, managers, and CEO's always have the choice to spend more of the" profits" so that they don't have to pay taxes on them. This is one form of investment.

    I guess what I'm saying is that the explanation this guy is giving to his employees is just way too simplistic. It in no way represents what will really happen.
    Thanks for adding your insights, Juulie.

    It may very well be a simplistic way of looking at it but it does have points worth considering.

    The backbone of this country is small business in many ways, and the tax burden being forced on them from the bailout & meltdown etc... is tremendous and inescapable for the consumer, as well as the employee.

    The article did convey that rather well.

    Thanks again for your contribution.
    As long as it is acceptable for a person to beLIEve that he knows how god wants everyone on Earth to live, we will continue to murder one another on account of our myths. ~ Sam Harris, 'The End Of Faith'
    ~~~~~
    Christianity demands the crucifixion of the intellect.
    ~ Susan Kierkegaard

  6. #6
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    Re: Now who's getting scammed!!?

    Quote Originally Posted by Soapboxmom View Post
    Wait, 99% are getting a paycheck. The owner is facing some challenges, but making a living wage to be sure. If it were an MLM 97% working the business would be losing money. What is your point?????

    Soapboxmom
    My POINT?!

    Focus on the big picture, Heather. MLM is small potatoes when considering that B&M business' are faced with those kinds of options, it really SUCKS!

    I'd hate to own a B&M business right now. It's miserable out there, for many of them!
    As long as it is acceptable for a person to beLIEve that he knows how god wants everyone on Earth to live, we will continue to murder one another on account of our myths. ~ Sam Harris, 'The End Of Faith'
    ~~~~~
    Christianity demands the crucifixion of the intellect.
    ~ Susan Kierkegaard

  7. #7
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    Jul 2006
    Posts
    7,767

    Re: Now who's getting scammed!!?

    julie, as a small business owner myself in the past, but not currently, i can say,

    the tax return says - gross?
    cost of goods sold?
    other allowed expenses?

    what is left is considered all profit and taxed, using the schedule provided.

    they do not care what you planned to do with the money next year, if its to advertise, give your employees a raise or buy yourself a yacht, doesn't matter. you still have to send in the government's share of last year, now, today. in fact, many have to file quarterly or even monthly, and pay estimated taxes at that time.

    no business ever pays taxes. its always the customers that pay for every business expense. if taxes or other expenses get too high, there are less customers can afford the product, the business shrinks and lays off employees.

    the democrats plans to raise taxes for universal healthcare and cap and trade will mean that you won't be able to afford to buy as much stuff. most people can remember the recent $4 gas and how they had to cut back on everything to pay it. this is going to be much worse than that.

  8. #8
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    Re: Now who's getting scammed!!?

    Quote Originally Posted by mumbles View Post
    julie, as a small business owner myself in the past, but not currently, i can say,

    the tax return says - gross?
    cost of goods sold?
    other allowed expenses?

    what is left is considered all profit and taxed, using the schedule provided.

    they do not care what you planned to do with the money next year, if its to advertise, give your employees a raise or buy yourself a yacht, doesn't matter. you still have to send in the government's share of last year, now, today. in fact, many have to file quarterly or even monthly, and pay estimated taxes at that time.

    no business ever pays taxes. its always the customers that pay for every business expense. if taxes or other expenses get too high, there are less customers can afford the product, the business shrinks and lays off employees.

    the democrats plans to raise taxes for universal healthcare and cap and trade will mean that you won't be able to afford to buy as much stuff. most people can remember the recent $4 gas and how they had to cut back on everything to pay it. this is going to be much worse than that.
    Thanks for adding that, mumbles. I've never ran/owned a B&M for many of the same logisitcal reasons mentioned.ing1:

    The recession is far from over, and it's gonna get much worse before it gets any better. IMO

    2010 should be an interesting year, to say the least!
    As long as it is acceptable for a person to beLIEve that he knows how god wants everyone on Earth to live, we will continue to murder one another on account of our myths. ~ Sam Harris, 'The End Of Faith'
    ~~~~~
    Christianity demands the crucifixion of the intellect.
    ~ Susan Kierkegaard

  9. #9
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    Jul 2009
    Posts
    1,129

    Re: Now who's getting scammed!!?

    Hi! Im glad as hell i own a real business! Albeit its in germany where i now live;) we get taxed to death, but are compensated for it by an extremely high quality life(for instance, you will never see a homeless person here). I think owning a businesscan be ressesion proof, depending on what business you run. If you sell..erm...barbecue grills, youll get hit much harder then if you own a pub or run a daycare or a ice delivery service or any if the thousands of recession proof jobs. Its only "dreams" that are affected by the economy. Real businesses that provide real services to their fellow man rarely feel the pinch. Just my 2 cents.
    Owninator

  10. #10
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    Mar 2007
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    Texas
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    Re: Now who's getting scammed!!?

    From your buddy Lens, train of thought..

    Why is this written by an anonymous author.. No real business man would put his name to it?? Why? So it must be completely false.. right?

    I have owned small businesses my entire adult life.. There is a lot of misinformation out there..

    We will be OK, Why? Things get old... People do not like old things.. People might not be buying today, but they will... Soon..

    Every product you see or know will be bought new in the next 10 years..
    Len Who?? Who is this Len character you guys keep talking about?

  11. #11
    Join Date
    Sep 2008
    Posts
    188

    Re: Now who's getting scammed!!?

    Quote Originally Posted by mumbles View Post
    julie, as a small business owner myself in the past, but not currently, i can say,

    the tax return says - gross?
    cost of goods sold?
    other allowed expenses?

    what is left is considered all profit and taxed, using the schedule provided.

    they do not care what you planned to do with the money next year, if its to advertise, give your employees a raise or buy yourself a yacht, doesn't matter. you still have to send in the government's share of last year, now, today. in fact, many have to file quarterly or even monthly, and pay estimated taxes at that time.

    no business ever pays taxes. its always the customers that pay for every business expense. if taxes or other expenses get too high, there are less customers can afford the product, the business shrinks and lays off employees.

    the democrats plans to raise taxes for universal healthcare and cap and trade will mean that you won't be able to afford to buy as much stuff. most people can remember the recent $4 gas and how they had to cut back on everything to pay it. this is going to be much worse than that.
    I've been around small businesses much of my adult life, too, and I know for certain that there are ways to delay expenses so that a tax burden is delayed as well. If that fellow plans to spend that money on legitimate business expenses next year, he certain does NOT have to pay taxes this year, except on the money which he takes as "profit", meaning money he takes for himself. A corporation (not sub-chapter S) has it even easier, with many ways to "retain earnings" without being taxed.

    And I'm with Soapboxmom on this one thing: I'd a lot rather have a real job (including a very few MLM sitches) with a low, but steady income, even the possibility of a lay-off; than to buy into an expensive "opportunity" that has no chance of ever breaking even.

  12. #12
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    21,906

    Re: Now who's getting scammed!!?

    Quote Originally Posted by Juulie Downs View Post
    I've been around small businesses much of my adult life, too, and I know for certain that there are ways to delay expenses so that a tax burden is delayed as well. If that fellow plans to spend that money on legitimate business expenses next year, he certain does NOT have to pay taxes this year, except on the money which he takes as "profit", meaning money he takes for himself. A corporation (not sub-chapter S) has it even easier, with many ways to "retain earnings" without being taxed.

    And I'm with Soapboxmom on this one thing: I'd a lot rather have a real job (including a very few MLM sitches) with a low, but steady income, even the possibility of a lay-off; than to buy into an expensive "opportunity" that has no chance of ever breaking even.
    What about one thats not expensive, with every chance of breaking even?
    "People are not interested in your product or your business; they are interested in solving their own problems." -- James Dillehay, Entrepreneur and Author

  13. #13
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    Re: Now who's getting scammed!!?

    Quote Originally Posted by ChrisDoyle View Post
    What about one thats not expensive, with every chance of breaking even?
    HAHAHA!!!

    Name one MLM where 50% of the reps after expenses are clearly in profit. The Income Disclosure or other verifiable documents must reflect this!

    Soapboxmom

  14. #14
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    Mar 2007
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    Texas
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    Re: Now who's getting scammed!!?

    Quote Originally Posted by Soapboxmom View Post
    HAHAHA!!!

    Name one MLM where 50% of the reps after expenses are clearly in profit. The Income Disclosure or other verifiable documents must reflect this!

    Soapboxmom
    Soap...No facts needed..Chris just Knows!!
    Len Who?? Who is this Len character you guys keep talking about?

  15. #15
    Join Date
    Jul 2009
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    Re: Now who's getting scammed!!?

    Hi Chris!

    What mlms out there really have a low cost and a "oppurtunity" to break even, though? Maybe some people can do that(1 to 3 percent) but in my personal opinion, its easier to just spend your days at slot machines in vegas, as with gambling you have at least i higher chance of return as opposed to
    mlm.

    I dont doubt that your mlm is breaking even, and i domt believe you are a scammer, but im just suggesting that your positive experience with mlm is putting ypu in the 1 to 3 percent, but its the other 97 percent who fail that lose.
    Just my 2 cents
    own

  16. #16
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    Jul 2008
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    Re: Now who's getting scammed!!?

    Quote Originally Posted by Soapboxmom View Post
    HAHAHA!!!

    Name one MLM where 50% of the reps after expenses are clearly in profit. The Income Disclosure or other verifiable documents must reflect this!

    Soapboxmom
    Is that 50% of the reps that do anything apart from sign the application, or are you including everyone?

    Dont bother answering, I know your answer.
    "People are not interested in your product or your business; they are interested in solving their own problems." -- James Dillehay, Entrepreneur and Author

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