So this new minumum wage thing?
Ok sales tax and payroll tax so your customers and employees paid their taxes.
And companies get tax incentives ah so hard done by :(
One of the things that you're failing to take into account is that the company is the one who's making the investment to stay in business. The company is the one who's paying for the R&D, the marketing, the taxes, the property taxes, the regulations, as well as equipment, overhead, etc.
Here's an idea. Instead of looking to mandate what the cost of wages are, why isn't the government looking at doing what the only thing government is in control of and that's scaling back a lot of the overhead.
Did you know, that here in NY, the property taxes on business aren't set to the value of the property, but what the value of the business might be on the property? That's one of the reasons for commercial zoning. It's not to put businesses in a group, per se, it's so that the piece of property can now be taxed commercially, which is astronomical compared to residential.
You talk about rentals. Here, rentals are taxed as for profit property. That leads to a cost increase on the price of rent. Yet, I don't hear people screaming for the scale back of taxes, instead I hear about the increase in wages.
Okay, so I decided to open up a body shop. Reasonable enough of an example.
I buy a piece of property that's available. Right out of the gate, my mortgage payments are higher, because of the commercial zoning. I escrow my property taxes. Because I'm not commercial, my taxes are two to three times higher than if I worked out of my garage on the side.
My utility rates are twice the cost because I'm in a commercial zoned area. And that's not because of the greedy utility company, it's because the government mandates that I pay more because now, thanks to my usage, I'm considered environmentally unfriendly. I do everything I can to make sure my usage is low, within reason, yet I still have to pay more out the door to begin with. Then, on top of that, I have fees and taxes attached to my bill every month that's twice as high as residential.
So, now I'm ready to do business. Oh, but I'm not. I still have to buy a booth. That booth has to be government certified through the EPA and then I get to pay the state government for my privilege of being in business by having DEC come out and certify the booth. That's an additional cost. And, I had to pay the local government a fee for being actually building the damned thing on premises in the building permits. The building permits cover my ***, in case of fire, the insurance company can see that I had it approved by the local code enforcer, who may or may not be qualified. Better I hire and engineer to sign off on it. That's an additional cost.
Now, I need to buy my signage from the State the says I'm actually legal to do business. That costs more money. And it's money I have to pay every two years to the DMV as being a repair shop.
Then I'm ready to do business.
I've hired a couple of guys to be out in the shop while I deal with all the front end work. My first quarter has passed. Time to sit down with my accountant and go over everything.
Okay, I can right the booth off. But only a certain percentage of it. But, still I'll take every penny I can get. I can't write off my personal tools because I didn't spend enough on personal tools to be able to write those off. I sit down and match what my employees have paid in taxes, SS, and Medicaid/Medicare, plus the extra cost of having employees: comp, unemployment insurance, health care. And because I get a weekly paycheck out of my work, I get the privilege of paying twice for myself. I have to withhold my own taxes and then cover what my business has to match on those taxes.
I also have inventory. I decided to go with a paint mix station and keep three or four cases of bondo and primers and tack rags and tape and paper and... on hand so that I won't run short in the middle of a job. I get to pay taxes on my inventory, too. Oh, I could send it back to the vendor before the end of the quarter, but he'll have to pay taxes on it, too, and then I'll just have to re-order. Not worth the hassle, so I'll include that in the check I have to cut.
Do you understand what it means to actually be in business? What the weight of being in business actually is? Yet, for all that all I hear is "living wage!" but never any cuts in the areas that government acutally has any weight in.
I don't know... maybe if I didn't have to jump through hoops and pay taxes on top of taxes and fees on top of regulations, I might actually be able to "share the wealth" and pay my guys a few extra cents per hour, all the while trying to maintain 5% margin. But, you're right. I should just go ahead and cut my margin to 2.5% and pay more. In the meantime, that additional 2.5% might be all there is between solvency and bancrupcy.