What not to do in a troubled economy

Discussion in 'Financial Cents' started by melbo, Jan 27, 2010.


  1. melbo

    melbo Hunter Gatherer Administrator Founding Member

    As a side note, Oregon is now taxing business' on GROSS revenue rather than net!!!!! Those businesses that had been holding on and operating at a wash to keep their doors open will now get some pretty big tax bills.




    http://globaleconomicanalysis.blogspot.com

    Oregon's Death Spiral; Business Owners Say "I'm moving out"


    On Tuesday, unions in Oregon won a charred earth victory that will drive already troubled Oregon, straight off the cliff.

    Oregon voters passed Measure 66 which raises tax rates on individuals who earn more than $125,000 and couples with incomes greater than $250,000. Voters also passed Measure 67 which increases business taxes.

    Please consider Oregon voters pass both tax measures.
    Oregon voters on Tuesday approved tax hikes on businesses and the wealthy, allowing legislators to avert budget cuts they said would have affected schools and services for the poor and elderly.

    The most recent reports had labor outspending business in one of the state's most expensive issue campaigns. Common Cause of Oregon said Guiney's group raised $6.85 million to the $4.55 million raised by Oregonians Against Job-Killing Taxes.

    "The bottom line is the unions bought the election," said State Republican Chairman BOB Tiernan. "It's going to be a sadder day as more businesses leave the state and more don't want to come here."

    Passage of the measures spares the Legislature a month of budget-cutting when it starts a four-week session Monday.





    "I'm moving out"

    Please consider an email from one business owner in response. "C.S." Writes ....
    Mish:

    Don't know if you noticed but Oregon narrowly passed another tax increase today. As a business owner for 25 years in Oregon, I'm moving out, going to Washington. Many other business owners I talk to are saying the same thing. They are all getting out. One of them refused to renew his commercial lease until seeing the results of 66/67 tax measures. He'll be moving out also.

    Tektronix last year decided to get out as well, and they are moving 80% of what is left to Shanghi China. Many other companies have also left in the last couple years. Oregon will now be tied with Hawaii at 11% income tax, the highest in the US.

    Moreover, they have added a tax now on gross revenue. It doesn't make any difference if you are losing money and trying to survive. They want to skim the top. Wasn't this the technique used by the Mafia?

    If that's not bad enough already, the City of Portland is talking about massive tax increases. If you're a business in the city limits, the tax/business license fee has been 2.2%. They now want to increase it to 8%, a 400% increase. In that case, a business in the city limits of Portland will pay 11% income tax to the state and 8% income tax to the city: 19% city/state income tax, on top of the Federal 35% income tax.

    Last year Oregon's unemployment was 12.5%, one of the very highest in the US. Two large Malls went bust in 2009 and there are entire blocks of empty retail locations. There is so much commercial space up for lease the FOR LEASE signs run up and down the streets everywhere.

    One major decided he didn't like the number of signs and tried to pass an ordinance to restrict the signs. He said "It looks bad, like the city is going broke." His remedy: hide the problem.

    One small company said it would have to terminate 2 more of their employees if 66/67 passed. That's just a sample. Oregon unemployment is headed much higher.

    Regards, C.S.





    Oregon's Death Spiral

    Inquiring minds are reading Nike chairman: Anti-business climate nurtures 66, 67.
    Forty-six years ago, when Mark Hatfield was governor, I started a small business in Oregon. In our first year, sales totaled $8,000. I am proud that it eventually became a major employer in the state.

    It has been my hope that other entrepreneurs would similarly pursue their dreams in Oregon. They won't. Measures 66 and 67 should be labeled Oregon's Assisted Suicide Law II. They will allow us to watch a state slowly killing itself.

    They are anti-business, anti-success, anti-inspirational, anti-humanitarian, and most ironically, in the long run, they will deprive the state of tax revenue, not increase it.

    The state in past years was headquarters for The First National Bank, US Bank, Pacific Power, Willamette Industries, Georgia-Pacific, Jantzen, White Stag, G.I. Joe's, Monaco Coach, Meier & Frank, among many others. They are now headquartered elsewhere, are controlled by non-Oregonians or no longer exist.

    There are words to describe what we are doing with 66 and 67: It is called a death spiral.
    Complete fools in Oregon just voted to save bloated union salaries and pensions, while driving away the real source of tax revenue, private business.

    Unions that take hold of states inevitably wreck them. Oregon should take a good hard look in the mirror. It will see a reflection of Michigan. Good luck with that.

    Mike "Mish" Shedlock
    http://globaleconomicanalysis.blogspot.com
     
  2. SLugomist

    SLugomist Monkey++

    Coming to a town near you, and you, and you!!
     
  3. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    Pretty soon, Oregon will be a good place to hide. Nobody else will be there.
     
  4. RightHand

    RightHand Pioneer in a New World Moderator Founding Member

    I'm always amazed when the voters can't see that a strong economy is built by strong business presence and success. I understand the legislators voting to overtax business - it temporarily placates the citizens who have the misguided image of wealth business owners riding into the sunset through the sweat labor of their employees. (Refer to Message to Garcia thread) Small business makes up the largest commercial portion of every state's economy and every small business owner I know works longer hours than any of their employees, is the last one to take home a paycheck after every employee has cashed theirs and is sitting in a bar having a beer, has full responsibility for hugh debt loads incurred as a result of that business, is not appreciated for providing a business and workplace that is most often fraught with almost insurmountable obstacles to success. The hue and cry to apply a larger tax burden on business is really a plea to business owners to close up shop or move away leaving an empty building and out of work employees.
     
  5. Gray Wolf

    Gray Wolf Monkey+++

    Wife and I both voted "NO" on each of those measures.
    They passed anyway, along with every other thing we have said "NO"
    to recently.
     
  6. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    get ready for this to spread across the country. evil capitalists need to be punished. lets all join a union.
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  7. Tracy

    Tracy Insatiably Curious Moderator Founding Member

    They'll get their money from the businesses all right, at least for 2009. The tax is retro-active and permanent. Several small business owners that I know are looking to move or just close their doors, leaving more folks looking for employment. At the very least, small corporations will change their status, and unincorporate before year's end.

    The "YES" advertisements and telephone calls that I received were plentiful. Propaganda. Uninformed solicitors had to deal with political debate when they called me :).

    Services and schools were their target, as usual. What they didn't say on TV was that the reason that it was so doggone important for the schools is that they had already included these funds in their budgets. If it failed, the unhatched chickens that they counted on would rip away their 2010 budgets. So, it wasn't a matter of "Gee, this money will be nice, we could reinstate some valuable programs", but "Holy crap! If this doesn't pass, this school year is toast!"

    Too many people vote by commercial, not by facts. [sheep]
     
  8. overbore

    overbore Monkey++

    Too simple for Liberal/socialist minds:

    Want more of it? Tax it less.

    Want less of it? Tax it more!


    More or less, that is the time tested answer ;)
    Their answers do not pass the test of time :oops:
    but then again they are so much "smarter" than common "cents". :D

    Laus Deo
    overbore
     
  9. NVBeav

    NVBeav Monkey+++

    If the Willamette Valley, from Portland to Salem, could sink into a crevasse, you'd have a pretty conservative state.
     
  10. melbo

    melbo Hunter Gatherer Administrator Founding Member

    90% of this state is controlled by the 10% in that area and we are of unlike mind in everything.

    The PNW would be the perfect place if Sea-tac, PDX and salem were annexed. If I were to stay in this area, Idaho looks pretty good.
     
  11. melbo

    melbo Hunter Gatherer Administrator Founding Member

    Anyone ever play the old computer game Sim City? It was a simple exercise in supply vs demand and tax vs growth. If you didn't find the balance, you were screwed.
     
  12. Tracy

    Tracy Insatiably Curious Moderator Founding Member

    [sinking]

    Portland's trying to sweet talk UnderArmour (a strong Nike competitor). UA doesn't want anything to do with them. Think they'll get a clue?:rolleyes:

    "Clackamas County joined 24 other counties in rejecting both ballot measures, part of a voting block running through Oregon’s Willamette Valley and all the state’s eastern and southern counties. ...Marion County was the lone Willamette Valley county to pass both measures.

    ...The measures were passed in Oregon’s most populated counties – Washington and Multnomah – resoundingly, which was enough to overcome the 25-11 disadvantage in counties won statewide. " - local newspaper.
     
  13. Hillclimber

    Hillclimber Monkey+++ Founding Member

    It's like a rider...the top...and a horse...the bottom...The rider has been whipping the horse to sustain top speed...the past 65 years...to the point that the horse has become exhausted...it's slowed...over the past 2 years...and now stopped.

    The top has dismounted and is basically whipping the horse now but it won't budge...The rider is going to whip the horse to death.

    The rider will then blame the horse.

    The Government will make a new rule making it illegal for exhausted horses to stop galloping at full speed...problem solved.

    The horses will still stop when they become exhausted...and the riders will continue to whip them to death.

    Like they have been doing for 1000's of years now.
     
  14. SLugomist

    SLugomist Monkey++

    [deadhorse]


    great analogy, too true.
     
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