Michael Teahan, like his father, mother, and uncles before him, is a small business owner. The 52-year-old has spent most of his adult life running his own businesses: a restaurant, a coffee bar and various companies involved in the espresso machine business.
[...]
Teahan currently operates Espresso Resource, a company that imports espresso machine parts from Europe to sell to U.S. restaurants and coffee shops. And he’s doing very well for himself: The two-man operation clears about $1 million a year in total sales, Teahan says -- enough to secure himself annual income in excess of $250,000.
That makes Teahan one of the few small business owners to actually benefit from the Bush administration's tax cuts for the wealthy. He says the cuts save him about $12,000 a year, compared to what he paid before they were enacted. But as debates over the federal budget deficit have intensified, Teahan has found the political discussion increasingly divorced from the reality of his experience as a small business owner.
Tax cuts for the wealthy, according to Teahan, will do nothing to bolster his firm. They won’t affect his hiring decisions, they won’t encourage him to buy new equipment or help him move into a bigger warehouse. He says all of those decisions -- the nuts and bolts of actually running a small company -- depend on the his customers' economic conditions, not his personal tax rate.
"What we do in business, how we spend our money, how we allocate our resources -- that has very little to do with tax policy," Teahan says. "I map my business based on my customers, and what my customers want to buy, and what they can afford to buy."
And other small business owners interviewed for this piece agree:
"We are fed by our consumers, not by our tax breaks," says Rick Poore, owner of Designwear, Inc., a screen-printing business based in Lincoln, Neb. "If you drive more people to my business, I will hire more people. It's as simple as that. If you give me a tax break, I'll just take the wife to the Bahamas."
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"The economic premise, that people won’t hire because they might have to pay more taxes if they make more money, is beyond laughable,” says Lew Prince, owner of the Vintage Vinyl record store in St. Louis, Mo. "You hire when you think there’s a way you can make more money with that hire. The percentage the government takes out of it has almost nothing to do with it.”
It's so weird to think that what small businesses need most is more customers. I just can't wrap my head around it. But in all reality, these guys are probably Democratic shills - union thugs planted by MoveOn to push a socialist agenda. Real 'murikans know that tax cuts are what we need to grow our small businesses and expand our economy, and to remove the uncertainty caused by the Marxist Kenyan Muslim.
In all seriousness, it's been apparent for some time now that we are experiencing an issue with aggregate demand, and tax cuts will do little to solve that. Businesses need customers, and most consumers right now are deleveraging from the easy credit boom of the early 2000s, or are just in general loathe to spend. Or on another front, they may be one of the millions of unemployed, about whom DC no longer gives a shit. Businesses need more demand, more customers in order to hire, and tax cuts don't supply either of those things. And you know what else? If businesses are hiring and thus serving to reduce overall unemployment, that also reduces the deficit as you have bring more people back into the revenue base. Imagine that. Republicans do not care about the deficit, however, as evidenced by their fetish for unfunded tax cuts. And I can't say that either party really cares to do much for boosting aggregate demand or solving unemployment. The general consensus on both sides of the aisle appears to be wait and see, or more specifically, gut federal spending while waiting, and that's just an incredibly stupid approach. But it's not like Nobel laureates know anything about economic policy...we should probably just entrust our fate to the feckless morons in Congress instead.
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