SEAN HANNITY – UNIFORMED OR JUST LYING?

SEAN HANNITY – UNIFORMED OR JUST LYING?

I’d be the first to drive Alec Baldwin to the airport next time he has a political tantrum, but the drama graduate might have hit upon something suggesting dual college dropout Sean Hannity spent too much time in Construction and not enough time reading an economics book.

Hannity’s latest pro business propaganda is that small businesses will pass on taxes to the consumer. In other words, owners will say “how dare you tax me, now take this sucker,” to the very market he wishes to attract. Is this cutting your nose to spite your face?

As a Financial Controller in small business for twenty five years, I know something about finances. Small business from its inception pays little to no taxes because it is working off start up investments as costs. A small business owner contributes their own capital, and once a bank is secure with an owner’s equity stake in the company, extends financing and a line of credit to purchase equipment and essentials to conduct business.

Most businesses do not turn a profit in the first few years of its existence, surviving off its startup funds and bank credit. There are no profits, so there are no taxes!

There are enough business deductions, loss carry forwards and ACRS depreciation (Accelerated Cost Recovery System) for those operating under the accrual accounting method to write off capital expenditures faster than its economic life, again allowing for no profits even if shown on their income statement.

However, this isn’t required because businesses are allowed to keep two sets of books – accrual for financial statements and cash basis for taxes, writing off all capital expenditures immediately. This allows a business to keep a bank happy regarding their risk due to profits, and allows more time to a company before paying taxes.

The most important feature of small business is that a majority are “S” Corporations –owners who use the corporate shield as protection against liability but whose profits are passed along to the owner who pays taxes at lower individual rates.

Hannity believes small business will fight any attempt at EVER paying taxes by extortion, inflating the price of their product or service out of the market with a tax pass-along’s once profitable. This is understandable if taxes were a fixed rate regardless of profit, but it is only a percentage of profit, which means an owner will always be ahead, unless greed (not enough profit) is factored into the equation. In that case, my suggestion to business is put your “big boy” pants on and pay your patriotic obligation like all we “average Joe’s.”

Sean further ascribes to the “look at the hand at the end of your arm” belief system in compassionate conservatism when it comes to “hand outs.” While we are all “created equal” in terms of dignity, we deviate as far as IQ and ability. Many come from broken, abusive or poor homes, have no resources and are not blessed with the upbringing of the St Pius X high school graduate Hannity.

My suggestion to Sean is to lose the diatribe and practice some humility; and crack open a business book or two before speaking.

David DiBello