Santa Monica, California, USA
Hi all: Some of the above comments make me want to go out and picket that old communist, Bill Gates and others of his Silicon Valley ilk!
Not only did Gates redistribute the wealth -- his despicable stock option plans made millionaires out of some of his employes -- and hundred thousand-aires out of many more. Where does he get off?
And, he had the nerve to donate hundreds of millions through his personal charitable fund to organizations that aren't even political! I mean, is this guy a Red or what?
"Socialism" is WORD some people find distasteful. Socialism is a political system some people find distasteful. And, as Ron noted, "Socialism" is reflected in a significant parts of the government we've got, and have had for some time. Maybe we should just change the name so people wouldn't get as excited. How about "Humane Democracy?" That doesn't sound too threatening.
I don't seriously think anyone sees a threat to Democracy or capitalism when farmers, for example, large and small, form cooperatives to more effectively brand, distribute, and market their products. It's socialistic capitalism for sure, though.
On the $250,000 hypothetical business example with 10 employees, trucks, overhead, and all that comes with running small business it couldn't possibly work. It's an untenable model.
First, if one had ten employees working at a currently modest wage of $7.00 an hour, the annual payroll would be $145,600, plus the business owner's mandatory "contribution" towards the worker's FICA. For the sake of this example, lets round labor costs out to $152,00. Through the owner's Federal and State taxes on $250,000 gross sales, I think we can realistically round the costs so far up to $165,000. And this assumes that the workers receive no company benefits at all.
Throw in ten trucks, leased, or purchased at say, at $250 a month each. That's $30,000 a year just to have them sit on the lot you are buying or leasing for $1,000 a month -- the businessman shoulld be so lucky -- and not putting gas in the trucks.
Now, the small business is up to $195,000 in costs. Add in a modest S2,4000 a month to insure the commercial vehicles (vans)and routine maintenance, call it $28,000 a year, bringing projected costs so far to $223,000, even if the trucks just sat on the lot and never delivered anything.
Now whatever the type of hypothetical business, service, distribution, etc, there's that tacky problem of paying for inventory or materials and supplies. Every business dealing in real goods or services -- and the example doesn't seem to be talking about an information/computer based service business, otherwise, no trucks -- has to maintain at least a minimum operating inventory of something, parts or product.
Say the business owner is truly savvy and frugal, and can keep his inventory down to a quick turn, quick replace $10,000. The operator still has to have the initial $10,000. The owner would also have to turn that inventory once every two or three days to hit the hypothetical gross. And we're now up to at least $233,000.
If absolutely nothing goes wrong, an unlikely scenario, the small business owner stands to "gross" $17,000 in annual income -- profit doesn't even enter the picture -- minus taxes. And no benefits of any kind. This means the owner, at best, will likely earn less than one of his employees. Not much of an incentive to go into business.
The Federal government acknowledges that the concept of "small business" is not what the populace generally thinks of as "small."
Two true examples:
1. A goat farming business qualifies for an SBA loan by being small if it grosses less than $75 MILLION dollars.
2. A general contracting business may qualify as "small" if it has less than 1,000 employees.
These are the maximums possible to stay "small" under Federal Guidelines. Of course, the SBA -- which guarantees loans obtained through banks and rarely makes even direct micro-loans -- works with much smaller entities.
I think, though, if the post's business hypothetical were taken to a bank, the hypothetical owner would be laughed at, even in the best of times.
Deer -- If a direct address might be permitted, I know you put out notions half in jest sometimes. I can't always tell when you're joking, so I rag on.
It ain't personal.