Never Knew the Taxes the Corporation Paid

Discussion in 'Economy' started by Care4all, Mar 8, 2009.

  1. Care4all
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    Care4all Warrior Princess Supporting Member

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    This is a topic regarding a business/company, that was also a division of a corporation.

    I was a Product Marketing Manager/Director for a specific strategic business unit, (sbu) of a company that was part of a major Corporation, doing about 1/3 of the total corporation's sales volume.

    What this job entailed, was planning and delivering a specific area of business for the company, from developing the product, to developing a sales plan for the product, to delivering the expected initial markups/retail prices competitively, to the end gross margin profit, to a say in the quality of materials/ the buys for materials , to the buys at factories for the completed product, and every detail in the Marketing/Advertising strategies to sell the product to our customers, who then sold them at retail to their customers.... had to go to trade shows to be there to answer any questions regarding the product the big customers had on it.... when being shown the next season's line by their sales reps or vp's of our company if necessary....just every aspect of how my area of business was executed and delivered from planning my sales to making sure i came in to them by year end.

    Basically, RUNNING A BUSINESS....

    NOT ONCE was i told what tax bracket the company or corporation was in or how taxes were going up or down. These concerns were the concerns of the VP of Finance and the VP of the Tax division of the corporation.

    They did not EVER come to me, or had any power over me or control over me, when it came to running the business.


    and

    Not once did I look at our stock price to see if i was doing a good job for the Company and making the Company money.

    NOT ONCE when i was called in the CEO'S office to discuss my plans for my area of business or my performance of my area of business did we discuss the stock price of our corporation or the tax bracket the company was in or anything other than how my BUSINESS was doing....taxes and stock prices had NOTHING to do with how an actual business is doing, or it's potential for growth, or the lack there of...


    So, WHY IS IT, that small business owners see taxes as such a critical part of the businesses they own, instead of concentrating how they can grow their businesses and leaving the tax decisions up to the tax accountant....?

    I was always taught, working for a corporation, getting the business "right" was the most important thing...having the right product in the right numbers at the right price kind of thing would bring in the sales plan....you meet your sales plan and margin requirements, and pretty much, the business will be profitable...no matter the end taxes...

    just wondering why a business run by a corporation would be so different than what it seems to be for small businesses?

    care
     
    Last edited: Mar 8, 2009
  2. Skull Pilot
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    Skull Pilot Platinum Member

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    You had absolutely no stake in that business. You did not risk your life savings and your retirement savings and indeed your family's future on that business.

    After doing that, tell me you don't care if you get to keep more of the fruits of your labor and more of the rewards for your risks.
     
  3. Care4all
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    Care4all Warrior Princess Supporting Member

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    other than an employee stock purchase program, and the knowledge that i was a fiduciary of the owner's money. the stock holder's money....this is true....

    but if i owned the business myself, i would have done NOTHING differently in running that business....the decisions on product and the marketing plan to drive the sales/demand of that product and all involved in the actual ''business'' of what i produced and sold... would not have changed an iota....

    the tax guys might have moved something from one column to another or to some other country for all i knew, but they never ever, let it get in the way, of the vp's/directors in charge of coming in to a business plan.... they did not say, Care, you can't plan this business so aggressively, even if you know the opportunity is there, because it will put the company in to a higher tax bracket....they told me to GO FOR IT!

    so, why would taxes make an owner become cowardly?
     
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  4. Skull Pilot
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    Skull Pilot Platinum Member

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    Taxes don't get in the way of a business plan. Taxes are hindrances on growth The less the government takes, the more for expansion, capital improvements etc. That is why business owners don't care for them
     
  5. Ravi
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    Ravi Diamond Member

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    They don't. It's just something to whine about.
     
  6. Toro
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    Toro Diamond Member

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    Care

    Interesting post.

    Perhaps the reason why you never focused on the after-tax profit and instead focused on getting the business correct was because that was your job. Corporations pay a great deal of money to finance whizzes and accountants to lower their tax bill. It is better that (talented) people such as yourself were focused on doing what you did best rather than focusing on taxes.

    If you are a small business owner, you do not necessarily have the option to not focus on the taxes you pay. Of course, you are going to focus on growing your business, but many small business owners cannot afford to hire the finance whizzes to focus on getting their tax bills down..

    Generally, the higher the taxes, the greater the cost and the less opportunity there is to expand your business and hire more people. That's why corporations spend so much to get their effective tax rate as close to zero as they can.

    However, taxes are not usually or even primarily a driver of business decisions. For example, venture capitalists are located in two of the highest tax jurisdictions in America - Boston and northern California. The venture capitalists often require small growing firms they are funding to move to the Boston area or Silicon Valley to be near them because both places have acquired a critical mass conducive to venture growth, even though taxes are higher. After all, if taxes were the primary factor in business decisions, Mississippi would be rich and California would be poor.

    Having said all that, however, generally lower taxes are better (as long as spending is lower) since corporations - big and small - are the primary drivers of wealth creation.
     
    Last edited: Mar 8, 2009
  7. Care4all
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    Care4all Warrior Princess Supporting Member

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    They, the vp/comptroller of the company, the finance guys too.... were not even allowed near us, in Product development/Marketing....if the vp's in that area had a problem, they would have to go to the ceo and the ceo would go to the vp of marketing/development if he absolutely had to for some reason...but in general, we were the KINGS OF THE CASTLE....we made the decisions entirely, regarding the business...even cash flow of goods...and the finance guys had to make sure it came in to what we determined was right and okay....we chose the x factory dates of product, and the finance guys made sure they opened the letter of credit or whatever it took to get the goods here when we determined....we chose our inventory levels, our sales plan and even if we became overstocked with goods it was up to us to determine how and when to liquidate and what mark down dollars to spend on it so we could still come in to our gross margin and turn rate plan...

    I do understand that a small business owner, may have to do everything themselves, so this is why they concern themselves with the taxes more, and that corporations have a whole team of people to help them in the tax areas of the business or dollar exchange rates in other countries we dealt with, or accounts payable things, but one thing that was a common saying was ... ''SALES Heel All Wounds'' and It's the Business, baby! It's not some tax bracket that you are in that makes your business bad, it's not having the right product at the right price...simple as that....

    ....make your darn sales plan and it is all but smooth sailing from there.... (yes you could miss your planned turn, or your planned margin in a tough season, but making your planned sales covers much of your fixed costs like overhead and the cost of paying those tax accountants and lawyers and specialists)

    so, i guess i am thinking, that maybe small businesses need to focus more on the actual business itself, dot all i's cross all t's, buy the right stuff, get the best price and 'dating'for it through your wheeling and dealing, and taxes that you are going to have to pay on the profits some time down the road should become a secondary concern....

    you could pay NOTHING in taxes if you wanted to...just run a crappy business that makes no profit, then tell me how important it is on what tax bracket you are now in with your individual income you draw from the business!!!

    i realize taxes come in to play somewhere after the Fat Lady sings, and they can't be ignored and should be viewed as another aspect of the business that you dot your i's and cross your t's on, but not at the expence of losing sight of your actual business's opportunities in growth....

    and this is what it appears is happening with some of the small business owners that have posted here lately and commented on in that silly article the other day, and.....i just thought they might need a little bit of advice or shaking up on that....so, thus my rant! :)


    Care
     
  8. editec
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    editec Mr. Forgot-it-All

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    Ravi's right.

    REAL small businesses aren't worried about taxes as much as these so called small business organizations (read shams pretending to speak for the small businesses, but actully speaking for very large "small businesses")

    Most small business owners pay the same tax rates as everyone else.

    Most small business owners are no where near the top tax rates, especially when they deduct every thing they possibly deduct as expenses.

    Of course if they have a complaint, it's more likely how difficult it is for them to FILE their incomes taxes.

    And for that complaint, I surely cannot blame them.
     
  9. Ravi
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    Ravi Diamond Member

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    Yep, that's basically it in a nutshell, Care.

    Funny thing is...for most small businesses trying to avoid paying their share of taxes the answer is pretty easy. Either give more money to your employees or spend the money on business related write-offs...therefore stimulating the overall economy.

    Or put the money in the bank, after taxes, and be thankful that you are the boss and not some idiot that runs his/her business into the ground.
     
  10. Skull Pilot
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    Skull Pilot Platinum Member

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    So none of you can even contemplate that some of us believe that the government takes too much of what is rightfully ours?

    "If you don't want to pay taxes, go out of business"

    God, that's a moronic statement.

    Here's an idea, if you enjoy paying taxes so much, get a better job or risk your life's savings on a business and put yourself in the top tax bracket. And then ask your beloved, benevolent government representative if they will raise your tax rate even more.
     

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