It just seems that it is too easy to just simply raise taxes. Raising taxes takes very little thought and even less effort. As the following article outlines, instead of taking the easy way, let’s do what is right!

The following is an article is an email from Taxpayers for Common Sense:

Sur-Tax-A-Lot
Volume XIV No. 49: December 4, 2009

A group of powerful lawmakers recently proposed a surtax to pay for costs associated with the war in Afghanistan. While we have regularly argued that the war costs should be budgeted, tacking a special income surtax on top of the tax code for certain dedicated purposes – in this case, the troop increase – is the wrong way to go about raising revenue.

The country is facing an enormous $1.5 trillion budget deficit, so the idea of enacting a special surtax to pay for the war may be attractive to some. But in reality we should either look to raise revenue across the board or cut other expenditures. War represents the ultimate sacrifice and commitment of a nation. If we are to go to war, we need to be prepared to both budget and pay for it. But the surtax is problematic for other reasons as well.

One major problem of enacting a surtax is that it complicates an already complex tax code. And the proposed war surtax is ridiculously complex. It is a sliding scale that starts at a base level of 1% of taxes owed and then is multiplied by a factor – annually determined by the president to yield enough revenue to pay for the war – and added on top of the filer’s tax bill. For those at the upper end of the income scale, the factor is doubled. That is unless you have served in the Iraq or Afghanistan combat zone since 2001, or you have lost a family member to the wars, in which case you are exempt.

Another problem is that temporary fixes in the code have a nasty habit of overstaying their welcome. For instance, there is some precedent for creating a special tax to pay for war. Remember that telephone tax that was abolished in 2006? Well the tax was enacted to pay for a war – the Spanish American War! For a four month conflict, it left quite a legacy: the Rough Riders, the slogan “Remember the Maine,” and a tax to pay for it that stuck around for 108 years. Creating a sunset or end date for a surtax doesn’t give us much confidence either – the U.S. Code is rife with programs that were extended past intended sunset dates.

Surtaxes are not a one hit wonder. In fact the war tax is not the only surtax Congress has been considering. The House health care reform bill has a 5.4% tax on individuals making more than $500,000 a year or double that for couples. But the problems outlined above remain.

In reality, surtaxes represent quick hit solutions to highlight an issue or avoid tough revenue challenges. It’s pretty clear that the war surtax was more about scoring political points than it was about raising revenue. That’s probably why Speaker Pelosi swatted it down this week. But that doesn’t get around the fact that the enormous deficits our country faces are the result of fundamental revenue and spending problems. Quick hits, sound bites, and band aid solutions are not going to address the issues. But real tax simplification, tax reform and targeted spending cuts could go a long way to bringing the nations books closer to balance.

What is also not stated here is who will actually pay for these taxes. While it seems the easy way is to just target the rich with increased taxes as the rich now seem to be the enemy of every working person in this country (given recent media attention to the corruption and extravagance of the rich), the rich will JUST PASS ALONG THE TAX.

Think about this. You don’t want to have to cut back on your spending and your lifestyle. Neither do the rich. But, unlike the rich, you have no one that you can pass along the tax too. They do. Can you just go to your boss or your customers and say that you are getting a pay raise – not asking but demanding? If you tried this, you would probably be out of business or fired. You just have to suck it up and cut back.

The rich on the other hand (and I am not saying this is right or fair – it is just a reality) will pass along those taxes. Most of the rich in this country – the people that will be affected by these proposed tax increases – are usually people that own or run businesses – from retail establishments, distributions, wholesale and manufacturers. Thus, if their personal income is likely to take a hit, they will attempt to preserve their income level and pass along those increases to their customers, who will in turn pass them along to their customers and so on until the end user, you and I, who cannot pass along those increase charge will ultimately shoulder the burden.

Think about it this way. Let’s say that you like to go to the store and purchase a 12 pack of soda. You typically pay around $3.00 for this 12 pack. But, for you to get this soda, it must pass through many hands.

The manufacturer makes the products – let’s say that the manufacturer’s cost is $1.50 per 12 pack. Then, the manufacturer sales the 12 pack to a wholesaler; who in turns sales it to a distributor; who in turns gets it to the end retailer so that you can purchase it. Each of these players (the wholesaler, the distributor, and the retailer) also add a level of costs that they want to be compensated for. Thus, let’s say that each add $0.50 for their contribution to this process. Thus, the total price to you is $3.00 ($1.50 + $0.50 + $0.50 + $0.50).

Now, let’s add in the tax – not a tax on the soda itself but a tax on the rich and their businesses (let’s not forget that these taxes will also tax corporate income as well as personal income).

First, the manufacturer must make the soda. To do so, the manufacturer must purchase the can or bottle the soda will go in as well as the raw materials to make the soda. Further the manufacturer will have to take those materials and add value to produce the soda – this means adding other outside variable costs like utilities and labor to the mix. Keep in mind that all of these players – the manufacturer, the bottle or can provider, the supplier of the raw material as well as the other variable cost providers all will face a tax hike under these proposed sur tax bills – both personally and within their businesses - and will pass those increases along to the manufacturer.

Let’s say that each of these players pass along $0.05 to the manufacturer making the manufacturer’s costs, not $1.50, but $1.65. But, before the manufacturer sales that 12 pack to the wholesaler, the manufacturer will also include its tax increases of again let’s say $0.05 – making the costs to the wholesaler $1.70 – a $0.20 cent increase due to the taxes. Again, the wholesaler, distributor and retailer will add their value (costs) of $0.50 for there efforts but will also pass along their tax increases of $0.05 each. Thus, they each will pass along a cost of $0.55 or $1.65 per 12 pack.

In the end, that same 12 pack is waiting for you to purchase it but now, due to these tax increases on the rich and their businesses, that 12 pack which once costs $3.00 now costs $3.35 ($1.70 to the wholesaler and another $1.65 before it hits the shelf). That is a $0.35 increase or an increase of nearly 12% to you – the end user as you cannot pass that cost or those tax increases along to any one else.

Now, why will the rich do this – pass along their tax increase? Because they can and if you were in their position, you would too. Plus, if they had to eat that cost, it could possible cost jobs especially in industries with very little profit margin to absorb these tax increases.

Further, while these tax increases are being touted as only being say 5% increase, the actual increase to you (as show here) is much more – nearly 12%. Why, because each player in the chain is taxed and passes all those taxes – they are cumulative.

In the end, these tax increases only affect the end user and the majority of end users, the other 99% of this country that do not fall into the rich category, will ultimately pay these taxes.

I guess what I am trying to say is that these proposed taxes are increases in business costs or costs to the business owner (managers) and they will be passed along like any other costs. Thus, these tax increases on the rich and on corporate entities are actually taxes on the poor and working class (the majority of end users). The sad thing is that the government knows this but tries to pull the wool over your eyes by saying it is just a tax on the rich.

I would rather see them cut spending than raise taxes – while these are harder choices to make and may be unpopular – these is a fixed limit on the amount of taxes that people (especially end users) can ultimately pay!

Not sure why this is thought to help consumers. Don’t we already have “buyer beware” measures in place?

Instead of doing research on the person reviewing a company or marketing another business’s products – why not just research the products and services before you buy.

Shouldn’t the FTC be more concerned about products that don’t live up to their name and hype or that truly hurt consumers instead of going after those people that provide the hype (which may be right on the money).

My opinion, focus on the products and not the hype or hype providers!

A recent article by the Wall Street Journal stated that 1 in 4 borrowers are underwater. While this article focused on the housing market and that many homeowners owe more than their homes are worth – it really makes one take notice regarding borrowing and credit.

While I firmly believe that many of these borrowers knew that they could not afford the houses they bought and went ahead anyways (kind of self inflicted) I also know that the housing mess is not helping anyone in regards to future borrowing – something that is needed with the small businesses of this country.

The article further stated that while unemployment remains high – creditors will continue to restrict additional lending. I see it similar but I also know that if an opportunity presents itself where banks can again take advantage of borrowers for a quick buck, lending will loosen regardless of the housing market or unemployment.

In the mean time, most small businesses still need capital to grow and survive. With more credit, they will be able to hire more, build wealth in their communities and grow their operations – something that is really needed. If we truly what change in this country, we will find ways to help our small business owners – change that will benefit all.

And, while banks and other lenders are stating that they are willing to lend – they are just not seeing credit-worthy borrowers (this is also my perspective), poor credit – either because of mismanagement or the economy – are holding borrowers back from realizing their dreams.

To that note, we just published a short article titled; “Repairing Your Own Credit” related to helping individuals fix their own credit scores.

I firmly believe that this task should be taken on your own as many of the companies touting they can help you fix your own credit are pure scams.

Plus, not only can you guarantee your own results, you will learn how credit works to ensure that you will not fall back into this situation again.

Receive the following update from the SBA:

This is a reminder that funds still remain available for the ARC program under the Recovery Act. The transition period that began Monday, November 24, 2009, only applies to Recovery Act fee relief and the higher guarantee levels in the 7(a) and 504 loan programs.

As consumers, we are constantly bombarded with advertisements. From television and radio ads to billboards and in-store signs – all touting the latest and greatest offerings of these advertisers.

So, how does a small business (with a much smaller budget than it larger counterparts) actually compete (build its brand) in this world of constant advertising noise?

Brand building is a major factor in business success. Brand building essentially rents space in current and potential consumer’s minds. Thus, when they think about a need that is not being met or are simply in the market for your product, you want your company’s name or product brand to come to the forefront of these consumers’ consciousness. Take for example in the 1960’s and 1970’s – Clorox Bleach. For years, probably decades, Clorox made a name (built its brand) as the premier bleach product. The company had so much brand awareness that there became a time when people quit saying the word “bleach”, the generic name for whitening clothes, and substituted the brand “Clorox.” Thus, consumers related the brand name with the product.

Further, brand awareness can come from a visual experience. Take the Nike swoosh. Most people in the world will think of Nike simply by seeing its brand.

In the early years of the last century, print and radio (as mass market advertising mediums) really bombarded brand awareness. However, each, while focusing on a certain type of mind stimuli, were extremely limited. Print advertising focused on visual stimulus – where potential consumer would read or see ads with their eyes only. Radio on the other hand, focused on the hearing sense – where potential consumers would only hear the ad – its words and its jingles.

When television came along, it was able to mesh these two together – both seeing the ad and hearing the words and jingle – it was the best of both worlds.

Why this is important is that people (consumers) use more than one sense to remember or identify an experience or in the case of brand awareness – remember a company or product brand. Take NBC that has a very stimulating visual logo. However, NBC also created and built its brand around three simple pings trying to create memory influences based upon hearing as well as.

Having myself grown up in the television era, I am much more inclined to remember something if I both hear and see it – it is like getting two exposures at one single time.

But, this also leaves my other three senses out of the picture – taste, touch and smell (know that the sense of smell is just as powerful as hearing or visual).

To build your brand in today’s market with so much advertising noise happening throughout our day means finding new ways to stimulate potential consumers. This could mean utilizing the other senses as these senses have not yet been overwhelmed to this point.

At one time, not sure where this has gotten, there were several companies working on smell-o-vision or providing smells through computer monitors. Some restaurants hand out free samples to stimulate the tastes of passer-bys. Even Pepsi used taste tests in attempts to build its brand. Others may use in-store demonstrations to provide hands-on experiences for its consumers.

In a world so thick with visual and auditory marketing competition, any business looking to build brand, to rent space in consumer’s minds, to be the go to company when people identify an immediate need either requires jumping into the middle of the current maylay hoping not to get eaten alive or attempt to come at consumes from another angle - an angel unlike to already be overwhelmed – think about the other untargeted senses.