American Small Business Owner Rages At Politicians: "Quit Your Job And Try The Real World"

Tyler Durden's picture

Via SovereignMan's Simon Black,

This morning I read a stinging open letter written by a small business owner in the Land of the Free named Don Chernoff.  Chernoff imports and sells luggage, and he pulled no punches in voicing his disgust for the phony support and failed policies that constantly make his life more difficult.

I’ve edited his letter for length below; the full version is available here.

You all love to talk about how much you support small business; the reality is the opposite. The economy is changing rapidly and is vastly different than just a few years ago. Many of the factory jobs in this country have gone and will not return.

 

Computer technology and automation will soon eliminate thousands more jobs (think truck drivers, taxi drivers, office workers, etc…).

 

Because there will be fewer middle-class jobs, many people who never considered working for themselves will be forced to become sole proprietors or open a small business. It is therefore critically important that you make it easier for these people to do so.

 

Right now instead of creating incentives for people to start their own small business, you create nothing but hurdles, allow me to give some examples.

Excessive health care costs

I work for myself and have to pay my own medical expenses. Before the “affordable care act” I was paying about $200 per month for a high deductible policy. It was far from perfect but it got so much worse under the “Affordable” care act.

 

I now pay over $400 a month, my deductible went from $5,000 to over $6,000 and my out of pocket costs for care have skyrocketed.

 

At this rate, I will go broke soon, and I am healthier than average. I don’t know how any normal working family or small businessman can possibly afford these rates without going bankrupt.

Income Tax Filing

I have to spend dozens of hours and thousands of dollars for a tax accountant each spring to prepare my taxes because I cannot possibly understand how to do it myself, and I have a master’s degree in engineering.

 

I also have to remember to pay quarterly estimates, even if my income in not predictable or fluctuates (which it does for most small businesses) or else I get dinged with penalties.

 

This is a time and cost burden that makes it very hard to run a small business. . . The current tax code is an abomination and should be scrapped.

Excessive import duties

There is a lot of talk lately about a “border adjustment tax” (BAT), a fancy name for an import duty on imported products. I design luggage and I need to contract out the manufacturing to companies that specialize in making luggage. All of these factories just happen to be in Asian countries.

 

Because of this I am charged almost 18% on my cost of goods for all my imported luggage. Last year these fees came to over $100,000.

 

The only reason I can see for these fees is government greed.

 

There is no luggage manufacturing industry in the USA that is being protected. This is another huge burden that makes it difficult to survive in the ultra-competitive luggage business.

 

Congress and President Obama had a chance remove this burden last summer, and they did what they do best: nothing.

 

If you do impose a border adjustment tax, will it be on top of the 18% I’m already paying? If so you will put me out of business.

Excessive customs inspection fees for imported products

My company designs luggage that is made in Asia and imported by ship to the USA. It is sold at all Men’s Wearhouse stores and Jos A Bank stores.

 

A recent shipment was delayed for almost 2 weeks at the port of Los Angeles for extra customs inspections.

 

The container was first x-rayed, and since that apparently wasn’t good enough, it was then opened and inspected by hand.

 

There was nothing in the container but the same luggage I’ve been importing for 15 years. I was then charged over $2,000 for this “privilege,” in addition to the 18% import duty I already pay.

This is not the first time I’ve had to pay for extra inspections that were unnecessary.

I understand the need for security but I’m a known importer of the same products for almost 15 years, and this is a terrible cost burden for my small company.

Excessive Social Security burden

Many years ago when I quit a perfectly good job to start my own small business, I was shocked to learn that I had to pay both my share and what had been my employer’s share of Social Security.

 

If you wanted to create the perfect disincentive to discourage people from taking the leap to start a small business or become self-employed, it would have been difficult to invent a better one.

Capital Gains taxes

So you’ve busted your butt for 20 or 30 years running a small business or sole proprietorship, now you’d like to retire and enjoy life.

 

Between state, federal and local taxes you’ve probably paid 50% or more of your income in taxes, but that’s not enough for politicians.

If you’ve been lucky enough to have created a business you can sell, now you’ll get to enjoy paying another tax on the capital gain from the sale.

It’s just another penalty imposed on hard-working folks by politicians who don’t think we are paying “our fair share.”

The word “entrepreneur” is endlessly tossed around by politicians who know nothing of how hard it is to be an entrepreneur. You all love to say you encourage entrepreneurship, but the reality is you stand in the way.

Most small businesses either fail or stay small because it is really hard to grow a business, and because of all the burdens you put on us.

Quit your job and try it yourself if you don’t believe me.

Let's hope things change. Or is Chernoff just another member of the cynics, skeptics, and fiction-peddlers...

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Hohum's picture

Detaching health care from employment would be a start.

Chipped ham's picture

Thank FDR for that. He came up with that to get around his wage control legislation. 

NotApplicable's picture

Might I recommend a life of crime?

I need Another Beer's picture

Hell yes !! I am running for congress

The_Juggernaut's picture

IRS will be auditing him for sure.

CH1's picture

Just stop playing the game. Your life is wasted feeding the Beast.

Crypto-economy for the win... even for survival as a sane being.

JRobby's picture

He must know that the GOVT is trying to kill him? He is intelligent enough to know that. They want him dead. Not out of business. Dead.

Any guesses at how much tax Amazon avoids annually and will never get caught? This guy has an 18% component of COGS that is a tax.

 

MalteseFalcon's picture

Economic growth, jobs and innovation start with small business.

I'd like to see the President propose something radical to help small business.

PacOps's picture

 

Correct. Small Business is the BACKBONE of our economy and the nation! Always has been.

 

What is so f'in' hard to get about that? Think about it.

Other than smaller political contributions, if any, along with kickbacks and bribes - huh, Congress?

Solio's picture

You mean we should all be politicians, spys, or banksters.

IRC162's picture

Pffffffffftttt

You didn't build that

drendebe10's picture

Fukda elected ruling political turds Fukemall

American Psycho's picture

Detaching .gov from business would be even better. 

Secret Weapon's picture

Detaching .gov from healthcare would be a start. 

undertow1141's picture

The land of the free and healthy by goverment permit only.

espirit's picture

You left out having to hire the handicapped.

...and diversity in the workplace,

...and extra transgender bathrooms,

...and 6 weeks childbirth leave,

...and it's gone.

August's picture

You are, obviously, some sort of white person consumed by hate.

PS  It's OK with me.

44magnum's picture

 .gov the supreme extortionist.

Arnold's picture

Small (trying to be compliant) business, the ultimate contortionist.

CJgipper's picture

He's wrong about the border adjustment tax though.  It should be 1000%.  Then there WOULD be a domestic US luggage industry.   And he could start it.  May have to work instead of just doing design, but hey, them's the breaks kid.

davinci7_gis's picture

Why do we need politicians in an electronic age?

JamesBond's picture

Because algos want to eat your brains.

espirit's picture

That's not all that AlgoAlice wants from you.

espirit's picture

So we can place bets which one will land in the red circle when those fuckers jump from their ivory towers?

Ben A Drill's picture

How to become a millionaire? Start with a billion and open a restaurant.

post turtle saver's picture

I'd rather race cars for a living... same result...

HRH Feant2's picture

Beautiful new building was put up 5 years ago as a restaurant. The place has been vacant for 3 years. Lots of traffic but in a weird spot. There is no clear entrance, for parking. Never went inside and to this day I have no idea how to get into the parking lot.

Location matters.

JamesBond's picture

I'm sure Maxine Waters has all the skills necessary.  Let's elect her again and again.  

JustPrintMoreDuh's picture

Time to rid society of all the parasites (bankers, politicians, lawyers, ... hint: its a looong list)

 

bpgnp210's picture

I hear the taxes are low and the regulations non-existent in Liberia.

Synoia's picture

As are paying customers.

cheech_wizard's picture

Anyone have an idea what the underground economy is?

Standard Disclaimer: The trick, William Potter, is not minding that it hurts. (and always work off the books whenever possible)

 

CH1's picture

The UG economy is everywhere, but there will be no one to hold your hand.

Arnold's picture

Agreed.
It's like you read my mind.
Quit it.

Seasmoke's picture

Hey Don. Pack your luggage for Israel. It's over.

markitect's picture

Unfortunately this guy is pissing in the wind.  The only thing this government will understand is short ropes and tall lamp posts.  Burn it down.

Ntoxic8ingWave's picture

More taxes than at any time in history, yet we are in the most debt at any time... Bit fishy...

sparkplug's picture

'You don't think they spend 20 thousand dollars on a toaster, 30 thousand on a toilet seat do ya?'

VIS MAIOR's picture

all the parasites (bankers, politicians, lawyers,womans... hint: its a looong list)

list is very long in usa..))  BUT US ARMY.Co  is black hole for money.. and pension for ex army people  and other cost. police dp. fbi. cia .... new cariers, nuclear submarines... fly s ...  

Phat Stax's picture

FUK-ing A!  Well said.  The government cares nothing for small business creation or for the people trying to do it.

CH1's picture

Got rid of my employees years ago... it's just not worth it.

seek's picture

Did the same, I could actually make use of mid-level clerical help, but the paperwork alone isn't worth it. Then add in secondary impacts on things like health care plans, licensing, workman's comp, etc, etc and it's a no-brainer decision to not employ people if you can at all avoid it.

I noted a few months ago, my business has to file 17 different tax forms per year, completely independent of the actual return. And that's just tax forms, there's corporation registry filings, licensing if you have an office (the city my last office was in literally sent people in on an audit asking for documents they knew we didn't have but -- we didn't, because we had no idea what they were. In the end it was a shakedown for a $500 business occupancy permit.)

I guarantee anyone running a small business is out of compliance over something, it's just that paper-pusher in charge of it hasn't found them yet. I pity anyone young trying to start up something as basic as a lawn service in this kind of regulatory environment.

PacOps's picture

Or a lemonaid stand!

AGuy's picture

3..2..1: IRS Tax audit for complainer.

Uncle SAM to business owners: You will do as your told, no matter how ridiculous the regulations are. When we raise your taxes your only acceptable answer *must* be: Thank you Uncle Sam, may I have another tax hike please! Failure to comply with our ridiculous taxes and regulations will be yuge fines and possible prison time. Be glad that we don't create a new regulation of silly walks, forcing all small business owners to walk silly while at work.

FWIW: Agree 100% with the article. but I've chosen a different path: Go Galt! There is no point trying to keep a small business (or even mid-sized). The gov't is on a path to tax & regulate all of them into insolvency. Only the Mega-Corps with an army of Lobbyist and attorneys can hold back Uncle sugar from taking it all. As Joshua from the War-Games learned, "the only way to win the game is not to play". Go Galt\minimalist. Its pointless to struggle to build or keep a small business afloat. You'll only end up pulling all your hair out.

If all small business owners dialed back (either to survival mode or closed shop) the gov't would lose its tax revenue lifeline. It is small businesses that generate the revenue that feeds the beast!

aliens is here's picture

Politicans creates hurdle for you (small biz owners) but create BIG OPPORTUNITIES for big biz (donors) FK politicans they are all human waste.

Harry Vederchi's picture

Think about that voters: Looting is not easier than working.

Because there is no free meal.

Therefore the welfare state brings you LESS than it takes from you.

You pay no taxes ? So what ? How do you think taxpayers get their money ? They make you pay more for their services, and they buy less services from you.

The "fair share" slogan is an OUTRIGHT LIE. There is no possibility to make government rest on the most productive part of the population because the rest of the population needs them more that they need the rest. EVERYBODY pays for the government, and people who don't pay taxes pay MORE than taxpayers, because they are the least able to make money ie increase the relative price of their services.

 

NoPension's picture

Yeah, ok.

Sounds like you've convinced yourself.