Tuesday, July 28, 2009

The First (Tax) Shot Across The Bow

We've been fortunate, my family and I, being able to weather the downturn in the economy without too much discomfort, for the most part. But it hasn't been easy.

Back in March every employee of the company I work for, from the CEO on down, took a 10% pay cut. We all saw that as being far better than being laid off. As things turned around a bit, our pay was restored. However we were all told that until further notice there would be no pay raises, again something that did not surprise us.

The small business my wife and I own (my wife is the CEO and I'm the handyman and IT guy) has felt the effects of the economic downturn, with business falling off about 40% from a year ago. Deb took on more hours to keep the payroll low and carefully managed what income was generated and what was spent to support the business. Even with the fall off in business we've been able to pay the bills and pay the loan we took to purchase the business. Then the legislature of the state of New Hampshire decided that in these tough times they needed to increase the state budget by over $1 billion, a 13% increase over the previous budget. The legislators and the governor claimed they had actually cut the budget, though I can't figure out how a $1 billion+ increase can in any way, shape, or form be described as a budget cut. To pay for such a generous budget increase the legislators and the governor decided it was quite alright to tax the bejeezus out of small businesses in the state to pay for all these “invisible” budget cuts, hitting over 45,000 small businesses in the pocket book at a time when many of them are struggling to survive. It certainly has hit us hard.

Starting on August 1st my wife stops taking a salary from the business. She had earlier cut her own pay to make sure we maintained a cushion to keep the business in the black. With the additional taxes imposed by our state she has had to cut her pay to zero. Without the cut we would be in trouble, unable to pay all the bills, the rent, franchise fees, payroll, loan payments, or any of the other dozens of expenses running a business entails.

If this is how the Democrat majority in the New Hampshire Legislature think they're helping us, then they are deluded. All they've managed to do is put the squeeze on the very businesses they're relying on to help turn the economy around. How stupid can they possibly be?

No comments: