Reconciliation With Sleepy Ted

NO thanks!  It’s a reference to Oregon Gov. Ted Kulongoski and the rift between the average Joe and state legislators which is now as wide as the Grand Canyon.

I woke up this morning disappointed, even a little discouraged and a whole butt load of resentment.

Why?  Well you see Multnomah county determined the future of the entire state by overtly influencing the outcome of Measure 66 and 67 which increases Oregon’s personal income tax rate and corporate taxes.  Sure the passage effects only the so-called  “high income” earners… it really should have been called the lets tax the “other guy” campaign.  But does anyone truly think for a second legislators will stop there?  NO! It will be only minutes before they start to whine about the next tax increase and the need to “save the children” and then it will be about going after the “kicker” law that rebates revenue surpluses.  And if you’re a betting person, there is money to be made if you bet on legislators who will silently work to LOWER the income bar on Measure 66 until all of us working at McD’s is considered to be a “high earner.”

Clearly the thing we will never hear from Salem is how they are making budget cuts like the rest of us in the state who are trying to survive salary reductions, layoffs and the recession.  It’s their ego and ARROGANCE which fuels my resentment.  These “tax and spend” legislators know only how to spend or make commitments to raise taxes.  Now they believe they’ve been given a mandate to raise taxes everywhere with Measure 66 passing.  They are ecstatic and will stop at nothing to satisfy their uncontrollable spending desires.

And if the lack of humility and blind arrogance wasn’t enough – the most egregious action by the people we put in office to represent us — our legislators — was making the Measure 66 tax increase retroactive to January 2009.  SURPRISE — A lot of people woke up this morning delinquent and owing back taxes to the state!  Get your check book ready.  In a state where 1-in-5 people can’t find work.  A state where 650,000 people are on food stamps.  Where there is record school-aged poverty and record mortgage defaults.  Yep, it takes a big EGO to submit tax increase legislation for all small businesses who create the jobs and increase the tax on the people who will invest in the state and then believe you are immune to any ramifications.

I previously posted that this tax increase will be the tipping point and likely shutter several motorcycle shops in the area. I hope I’m wrong.  All I can say is hang on.  For me?  In a word — Vancouver, WA. — it will likely be where my next home is located.

For the legislators?  I plan to set up the Taxation Addicts Anonymous outreach program.  Because after the next round of elections I anticipate there will be a large number of recovering addicts.

Photo courtesy of Ian Bradshaw

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The Changing Landscape

Out Of Busines

Harley-Davidson has undergone a grueling restructuring over the last year to better compete amid less demand.

The economy and housing bubble depleted consumers’ wealth and left a lot of folks unwilling to spend on Harley’s high-end bikes.  I anticipate that Harley will remain at least three quarters away from achieving positive retail sales trends in the U.S., especially given the companies lapse of a successful promotion in the first quarter.

I’m genuinely concerned.   More so about the decay of prosperity in the local motorcycle shops, parts suppliers, and dealers.  Be it routine service or customization, the local shops most often operate on their ability to make sure YOU are happy. They know if you leave satisfied, you will tell your friends about your experience with the shop.  Word of mouth is an integral part of a shops reputation in the local area and carries a lot of weight in generating new business.  “Giving” local shops rebuild, repair, or service work on your bike, while appreciated, is not going to keep a shop in business.   The industry at large will need sales to rebound or the local motorcycle businesses will lay-off their skilled workers or worse – close down operations.

Unless you own or work in a local shop, you have no idea of what it takes to stay in business.  Facility overhead, staff salaries, phones, heat/electricity and advertising are things everybody thinks of.  But what about insurance, hazmat costs, licensing fees and money paid to local city and state governments for all the TAXES they require?

And speaking of taxes, I’m very skeptical of government spending our way to prosperity.  Increasing the tax liability on small business owners does nothing to encourage businesses to take care of their employees.  In fact, in Oregon there is a special ballot measure on personal and corporate tax increases.  In my opinion this one-size-fits-all legislation may well force motorcycle shops to shut down.  You’ve heard of Measures 66 and 67 and read more about net profits and corporate structures to last a life time so I’ll avoid explaining the details.  Instead, let me ask a simple question.  Did you get a raise last year?  I know I didn’t.  And if you’re lucky enough to still have a job, I’m willing to bet that you didn’t either.  Most likely you took a pay cut.  Or had your hours reduced.  Or were required to pay a larger share of your health insurance coverage.

At the same time you and I were taking cuts the Oregon Legislature voted to increase the tax burden on higher incomes and businesses by $750 million dollars, it also authorized $248 million in pay raises for state employees.  Yep, that’s right.  State workers got raises during the worst economy we’ve been through since the Great Depression.

Still don’t care?  Then how about this.  The legislature approved a budget that increased state spending by 9%.  If I was operating a motorcycle shop I can assure you that if my business increased 9% over the past two years I’d be most happy.  The legislature increase is about $4.7 billion more than the previous two years.  Time for another question.  Do you think state services have improved as spending has increased?  Are the schools better? Is our infrastructure better?  At a time when Oregon has lost over 120,000 private-sector jobs in the past 18 months the state has added 10,000.  It would seem that in Oregon, government has become the ONLY growth industry!

I’m not sure about where you live, but in Oregon during the winter many think about what customization you can do to your bike in the off-season.  Before long you’ll be sitting at your MacBook, surfing the web looking to make some modification dreams come true.  You’ll likely have questions and find yourself on the phone calling the local motorcycle shop trying to get all those questions answered.  Before long you’ll have spent most of an hour discussing scenarios, getting advice and prices from the local shop expert.

What if they don’t answer your call because the parts expert is no longer employed?  What if they’ve gone out of business?

We’re told by the “spinsters” in Salem that the state is making “budget cuts.” Huh?  In fact it means simply they can’t have as much of an increase as legislators would like.  A 9% increase is NOT a cut!  It’s my opinion that the private sector creates wealth.  Government does not.  I hope you’ll join me in voting NO on Measures 66 and 67 to send a clear message to the Oregon legislators that a CUT means CUT.   

Increasing taxes on motorcycle shop owners means more will go out of business.

Source: Statistics from The Oregonian

Photo courtesy of Flickr.

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