My thanks to Neal St. Anthony of the Star Tribune for featuring Intertech in the article Inside Track: Business owners urge quick landing from cliff.
As shared with Mr. St. Anthony, whether a person likes it or not, I haven’t talked to any fellow business owners who believe taxes are staying the same or going down next year. While revenue increases seem, to me, a forgone conclusion, I believe any solution requires addressing national debt, entitlement reform, and spending cuts.
As it relates to spending cuts and tax increases, I talked about something that surprised me when teaching at the University of St. Thomas Graduate School of Business Management Center. To illustrate the point of savings versus revenue increases, I asked the class a question:
“An organization with a 2% profit has the opportunity to save $.01 (one cent) or increase revenues by 30%. Which would you choose?”
Most students chose the wrong answer… a revenue increase. With a 2% profit, it takes a 50% increase in revenues to match a 1% cut in spending. Our government, with huge annual losses, would see a great impact through cost savings.
Finally, if there is an overhaul in tax policy, it would be ideal to address the handling of taxation for S corporations (where profits of a firm pass thru to personal 1040’s). In 2008, after Obama’s election win, the Star Tribune was good enough to print an op-ed I wrote on this issue Don’t tax small business out of picture.