ITT we learn that making money is a poor reason to do business.
ITT we learn that making money is a poor reason to do business.
Rather, in this thread we are reminded that Dread will defer blame, or delegate responsibility, to any third party. Whether it's public unions or government taxation. It's certainly not related to his own goals, incentives, or investment decisions.
How so? He alleges that tax changes made a significant difference to how much profit was expected from the endeavor. With less money expected from it, the opportunity-cost comparison between the proposed business venture and other investment opportunities no longer favored the business venture.Originally Posted by GGT
Last night as I lay in bed, looking up at the stars, I thought, “Where the hell is my ceiling?"
So tax raises do not have a lot of influence on profitability?Or you don't think a business model (or good/service) that works in one situation will not be a good business model under different circumstances (in this case, higher taxes)?
Keep on keepin' the beat alive!
He made up his mind before any real tax changes were enacted. His decisions were based on unfounded proposals (higher tax rates) and fears, instead of the strength, creativity, or potential for his product or service, and business model. That's why.
That's bullshit, though. Unfounded proposals are just as worrying, since you don't know what will happen - what if you sink a lot of capital in it, the tax raises do happen and you go bankrupt? Uncertainty about things like this is a big problem. Or do you think that creativity and potential magically make future problems disappear? At least if the tax rates were certain you could shift your entire business model to the new reality, but if you do that and the tax changes do not happen you may be equally screwed.
Keep on keepin' the beat alive!
Fuzzy and Flixy are stating it well (though all this should be obvious enough...).
I totally agree, especially about the uncertainty part. And, just to be clear, I'm not some kind of zealot who wants to eliminate taxation and government. Taxes fund civilization (as long as we do it right).
All I'm saying is that tax rates (and incentives) really do matter for business. You obviously understand this. But this is a basic concept that is absent from many left-wingers in the US these days, and we're getting a slice of that from GGT.
Last edited by Dreadnaught; 01-09-2013 at 02:37 AM.
Bullshit and Baloney doesn't make your business model any more palatable. Blame anything you want, including proposed tax rates.....it wouldn't make your "non-pet pet business" a sure deal, even if it never got off the ground.
I would like to see you try to plan a business whose expected margins are below 50%. Seems like you never conceived of such a thing before.
Wait, you expected your profit margins to be in the 50% range? Or did I just misunderstand you?
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Nono, the opposite.GGT seems to be operating under the assumption that taxes can't seriously impact a business plan. Considering that the combined proposed tax rates could have been up to ~50%, it seems GGT assumes most businesses earn massive profit margins.
Okay, didn't want to think you went in with a totally unrealistic business plan.
What were you seeing on paper? 5-10%? And it was an existing business?
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Not willing to really share those kinds of details, soz.
No prob.
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That's not my position at all.Nono, the opposite.
Rather, that "entrepreneurs" who focus on their product or service aren't easily discouraged. Even if it means small profit margins at the beginning (which is very typical). They forge ahead, knowing that other small businesses face the same challenges, whether it's a proposed tax hike or regulatory requirement.
Sure, it can take over five years for an idea or concept to its initial up-start....but blaming a stall on possible future taxes is not only short-sighted and self-defeating, it's not a very good business model.
Dread, you've lumped all Taxes into one broad category, without distinguishing between state or federal, income or dividends. You've also chosen to live in a high tax state, and a high tax city, and base your fledgling business there. Federal taxes should be the least of your concerns....unless you think the whole of NYC commerce should continue to be based around the financial industry and Wall St., and its corporate welfare.
What is your product or service, and who are your customers?
One example is a large company may wish to know if it's better to open up another factory here or in another country, and the tax rate could decide that for them (they wany to pick the one that makes the most money). Or many such examples. It can affect things GGT. Does that mean Obama should back down and let the republicans get exactly what they want, to create certainty. Well that argument works both ways. The Republicans can give Dems exactly the terms they want to create certainty. Eitherway we all know sometimes the Dems are in the wrong and sometimes the Reps are, and you can't let your party loyalty try to defend whatever the Dems have.
Teachers often enjoy teaching, but sometimes they support the school and sometimes they don't.
Last edited by Lebanese Dragon; 01-11-2013 at 09:55 PM.
You keep on acting as if I'm planning to make the next iPod or some other heroic capitalist harblegarble life-changing thing. What I'm talking about is a side project, not a soul-burning passion. I want to do this, but partially because I think there's a chance of making a decent amount of money from it if I can balance my other obligations (which is increasingly tough because my other obligations have multiplied substantially over the past month).That's not my position at all.
Rather, that "entrepreneurs" who focus on their product or service aren't easily discouraged. Even if it means small profit margins at the beginning (which is very typical). They forge ahead, knowing that other small businesses face the same challenges, whether it's a proposed tax hike or regulatory requirement.
Sure, it can take over five years for an idea or concept to its initial up-start....but blaming a stall on possible future taxes is not only short-sighted and self-defeating, it's not a very good business model.
Dread, you've lumped all Taxes into one broad category, without distinguishing between state or federal, income or dividends. You've also chosen to live in a high tax state, and a high tax city, and base your fledgling business there. Federal taxes should be the least of your concerns....unless you think the whole of NYC commerce should continue to be based around the financial industry and Wall St., and its corporate welfare.
What is your product or service, and who are your customers?
Federal taxes are a big concern, just like any other projected cost that will eat away at profits. You know why? Because incentives matter.
So now that the rates are somewhat more firm, we're huddling together to take stock. But, given that we're already in a high-tax state and my life has changed direction a bit, I may just spend my money investing in a nice Texas-based company or another firm with a substantial presence in a right-to-work state.
Lebbie, it's true that some "certainty" matters for business planning and profit margins. Some uncertainty can also be called "risk", and there's no such thing as a 100% risk-free venture. But it's ludicrous to *build* a business around *proposed* tax changes (for the reasons I've already stated).
All sorts of incentives matter, and shouldn't be distilled down primarily to Taxes, let alone the fear of *proposed* taxes. Those are accounting issues that can be managed if any product or service is viable, and has future value. That takes time, and yes, a degree of risk.
Dread, I'd already pointed out that NYC and NY state tax rates are more likely to eat at your profit margins than any federal changes...which goes back to your choice to live and do business in a high tax state.
Maybe you mentioned right-to-work in gest or sarcasm, but you've become a two-trick pony poster: Taxes and labor Unions.
Increasing tax rates by over 100%+ is a sure way to get taxes into the conversation of any business. High taxes can make a business unviable. In my case, they have made the plan less profitable. Which changes the equation enough (plus some other personal issues) that I think I'm going to sit it out.
I don't know why this is so hard for you to understand. It's like you're basically begging me to open up shop in Texas to prove that you're right, when it actually proves you wrong.
I don't know why you're refusing to understand my point, either. Over-playing the tax card role is like throwing baby out with bathwater.
It's not much different than getting mortgages, or making charitable contributions. If tax deductions (and paying less taxes) are *primary* drivers, instead of buying a home to live in, or giving to charity for humanitarian reasons, the incentives -- aka motivations -- should probably be re-evaluated.
This is more about finding a way to do the things that truly matter to us, rather than the politics of taxes, or taxes themselves. It seems we have a different philosophy about all those things. Getting off the merry-go-round now, will agree to disagree.
Even if it's not the primary incentive, it has influence. Whatever your views on taxes may be, that they should be raised, lowered, or kept the same - denying that it has an influence is not a smart thing, of course raising a tax will have repercussions.I don't know why you're refusing to understand my point, either. Over-playing the tax card role is like throwing baby out with bathwater.
It's not much different than getting mortgages, or making charitable contributions. If tax deductions (and paying less taxes) are *primary* drivers, instead of buying a home to live in, or giving to charity for humanitarian reasons, the incentives -- aka motivations -- should probably be re-evaluated.
This is more about finding a way to do the things that truly matter to us, rather than the politics of taxes, or taxes themselves. It seems we have a different philosophy about all those things. Getting off the merry-go-round now, will agree to disagree.
Keep on keepin' the beat alive!
I've never said that taxes don't matter, or don't influence our behavior. But I don't believe it should be considered a primary driver, or main variable.
That'd be like saying a vacation in Holland may not be worthwhile, because of all the "taxes" involved (airlines, hotels, restaurants, souvenirs, services, duties, tariffs, etc.) or that it's only a good choice if those "taxes" can be deducted from our IRS filings.
If, say, airport taxes are indeed to high at, say, Schiphol airport, that will indeed increase the price of your vacation. That may be the difference between going or not going - even if you want to go, there's a maximum price you're willing to pay.
Or you could fly to Düsseldorf or Brussels to avoid the higher taxes by going to another country. Which actually happens, by the way (often it's also cheaper to have an extra leg from e.g. Germany instead of a direct flight). So it's not a bad analogy, since it has been shown to affect tourist behaviour, hence Schiphol and KLM complaining about airport taxes. Thanks for making my point
Or do you think that once you know where you want to go on vacation, you should go there no matter if the price increases significantly?
Keep on keepin' the beat alive!
No, it really is absolutely nothing like that.
Not all prices (or profit margins) can/should be tied to taxes. But if your *main* reason To Do, or NOT Do something comes down to taxes....especially proposed taxes that aren't even enacted yet....what's the initial incentive?....do you think that once you know where you want to go on vacation, you should go there no matter if the price increases significantly?
Prices and costs change constantly, but it's not always due to, or because of taxes. Basing goals around taxes, while complaining about taxes, gives too much credence to taxes. Incentives matter, but not if they're based *mainly* around taxes.
Why is this such a hard concept to communicate or comprehend?
Cause you are the only one that believes it?
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GGT, who said anything about "mainly"?
Your philosophy is that taxes should matter, except when they shouldn't.
Right, I'm the ONLY one that believes that actions and goals are their own incentives, regardless of tax implications.Cause you are the only one that believes it?
You're the one who said proposed taxes killed your business venture, until they didn't.
My general philosophy is that business endeavors and ventures do best when they focus on their clients/consumers as raison d'etre, not the other way around.
ITT we learn that making money is not a common reason to do business.Right, I'm the ONLY one that believes that actions and goals are their own incentives, regardless of tax implications.
Ironically, I think GGT has a more heroic view of capitalists than I do.
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