Which Presidential Candidate is Right for Automotive Dealerships

The social media sites were hot last night during the presidential debate between Former Massachusetts Governor Mitt Romney and current President Barrack Obama. Since the election of former President Bill Clinton, our nation has been evenly divided over which man is the best person for the job of leading our nation amongst the world.

As a small business owner who helps companies, specifically automotive dealerships, build their business and "Win Customers for Life"; I have some very strong opinions about who I feel should become the next elected President of the United States of America. However, I will let the reader research and decide who I am for, and who I am against. (James Schaefer) This blog is meant to encourage voter participation and look at one philosophical point of view of each candidate and who is the best person for business.

I will try to take a simple common sense approach and put forth the facts as if I were hiring for an executive position within my own company. This essentially is what Americans will be doing in November when they go to the polls. However, just like in the real world; some people would not make good business owners or managers, and some people need to reevaluate whether they are making the right decisions when they vote. Now remember, I am writing this blog about one of the many issues that is very important to me and my company. I am not writing this issue concerning healthcare, defense, or government sponsored programs. Therefore, a truly informed voter should look at all of the issues individually and way them to how their interest would be affected by the outcome of this year's election.

The following point and position is described referencing Small Business and each candidate's position. Hopefully, by laying this out in this format the reader will be able to ask questions of their own and vote for the best candidate that will help them and their interest. This is why the United States is so great. We all have a voice in who will govern us for the next four years.

Small Business:

The fundamental question is what is a small business? My definition is a business that was started from an individual or a group of individuals that developed their company because there was a need for their services or products. It is a business that is not financed by government or publically traded on the stock market. A small business is a private company, and how much money the company makes is NOT a factor. The reason that I feel the amount of revenue a company makes should not be a factor whether the business is considered a Small Business or not is because the risk completely falls on the individual or group of individuals who have created the company. They could fail if the business fails, but if it succeed they should benefit as well. In addition, I believe that the higher the revenue the company receives, the more opportunities they are able to provide for future employees and other companies that provides goods or services to that company.

Now the government has a different definition of Small Business. The Small Business Association (SBA) defines a small business as one that is independently owned and operated. It is organized for profit, and is not dominant in its field. Depending on the industry size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period.

Most Automotive Dealerships should fall under this definition of a Small Business. However, until recently most dealerships were not classified as a small business. The Recovery Act of 2009 reclassified 89% of automotive dealerships under the SBA; however, the gross revenue receipts were put at $8.5 million. My contention is that this is not fair to the Automotive Industry. There should not be a cap placed on any private business in terms of revenue received nor should a cap be placed on these automotive dealerships for profits gained.

The simple reasoning is that if an automotive dealership is successful; they employ sales people, service technicians, administrative personnel, accountants, parts specialist, and vendors (like my company). Their staff brings in more income which they will spend stimulating the economy. The vendors they employ are able to hire more employees and the cycle of economic growth will continue in a positive direction.

The candidates' positions:

President Obama believes that a Small Business is classified by how much revenue a company brings in. He believes that a company making $250,000 or more should be taxed at a higher rate according to CNNMoney.com. Under this premise, the government would be able to collect more taxes and thus be able to provide more programs for Americans.

Governor Romney believes that taxes are necessary, but tax breaks for Small Businesses would create more jobs. He has stated that the 3% of the highest grossing revenue companies are responsible for 80% of the jobs that Small Businesses provide. In short his method for creating more jobs is to give a break to these businesses and hope those companies will hire more people to help the business continue to experience growth.

I understand each candidates philosophical position on the issue and respect their and others opinion. The president believes that a company which makes more money should pay more taxes to help the country and its government backed programs. The governor believes that leaders of successful business will practice good ethics, and thus provide a piece of the pie for more individuals.

A new study by Ernst and Young projects that a tax rate hike will kill 710,000 small business jobs. Depending on who is elected will determine if this result comes to fruition.

I can tell you this. The larger my company becomes, the more people we will be able to hire. The more profit my company earns, the more benefits we will be able to provide individuals. The more benefits we are able to provide to employees, the better our retention of employees become. If we are taxed at a higher rate, our company will not be able to provide as many jobs otherwise. It is true, I will put more dollars into my account if my company continues to be successful. Contrary to the president's speach about small business "you didn't build that business" in July, I used my own money to start this company. My family and our employees depend on the success or failures of this company. I am sure many automotive dealerships will face the same concerns.

Hope to see you at the polls in November.

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Comment by David Ruggles on October 5, 2012 at 2:06pm: RE: "I will say this, I DO believe the president when he says that he wants to raise taxes to bring in more revenue. I do believe that he simply does not understand that fewer people paying a higher percentage does not solve a revenue problem."

The President has said we need a balanced approach. He is not in favor of fewer people paying a higher amount. We need to return to the Clinton era tax structure. This economic crisis is NOT like previous ones. The underlying fundamentals of the slow recovery are so many people with maimed credit, keeping them from buying the kind of big ticket items that create jobs AND the loss of almost 18 years of household net worth. In a short period of time, around $50 TRILLION in stock market equity and household net worth evaporated. We avoided Depression and around half of the loss has been restored via the stock market. The job isn't completed. Is anyone surprised that the same party who caused the FUBAR claims they could have fixed it more quickly?

Comment by Timothy Martell on October 5, 2012 at 1:42pm: Fred, See here is the thing. That dealership is not losing any money as a result of the reduction in workforce. They're still making the money they've always made, but if they had no just cut $300k in payroll, they would not be making that money.

Remember what i said, those at the top do not experience loss in income, it is the working man that suffers. Net profits are still within very similar margins to what they have always been.

Comment by Timothy Martell on October 5, 2012 at 1:41pm: Fred, again, as Doug points out, the wealthy are mobile. I am also in an industry that is experiencing the rise of its bubble. There is virtually no economic situation that could stop that. That said, I believe we would have more employees and be experiencing far better growth in a stronger economy.

Also, you miss the bigger picture. My company, Wikimotive, is doing well. But what you don't know is my desire to start other companies; other business ventures; to have the cash flow to invest in real estate opportunities. As a responsible business owner I cannot risk certain capital which must remain on hand as a matter of practical responsibility. More money in my coffers means more I invest in other opportunity and other people's incomes benefit as a result - more jobs are created to fill that demand.

Comment by Fred G. Slabine on October 5, 2012 at 1:28pm: Tim, I am very sad to hear about the store we worked at together having such hard times. When I was there they had incredible numbers with their bad location & tiny dealership. Such a pity, I say that with all sincerity; great people, one of the best places to work.

However, you are prospering under the Obama administration, that's great.

Comment by Doug Davis on October 5, 2012 at 1:16pm: I believe the real reason he wants the job is to eliminate capital gains, leaving him with out any taxes to pay.

How do you expect investors to react when they are looking at 47 percent tax. What will that do to the stock market?

Tim is absolutely right. Every dealership, that I call on, is cutting back on employees and hiring part-time people when possible. Rich people are mobile. I live in Phoenix where their growth has resulted from a mass exodus of business and people avoiding California's high taxes and anti-business regulations.

Comment by Timothy Martell on October 5, 2012 at 12:56pm: glad you were able to make a well articulated case lenny! lol

Comment by Timothy Martell on October 5, 2012 at 12:55pm: Fred, it is the focus on politicking and not on reality that clouds whatever small semblance of truth that might remain at the end of the day. OK, I get it. Romney is a politician. You don't trust him... Are you actually going to say that you trust Barrack Obama? Let's leave partisanship out of it for a moment. Lets just examine his record. How many unfulfilled promises did he make to get elected? At the end of the day - WHO CARES?!

THEY ALL LIE TO GET ELECTED! And it isn't entirely their fault. The world of media we live in means the only message most voters hear consist of 30 second sound bytes. Mostly lies at that (BOTH SIDES!)

The point I am making about the perspective of a business owner is that I don't need Rush or Sean Hannity (talk about right wing looney) to help me make up my mind - hell I might get entertained listening to them, but don't think I would ever base my "facts" on what a tv personality has to say.

Here is a fact, Fred. Since the beginnings of Obama care, the health insurance costs at the dealership that we BOTH worked at have gone up 18% year over year twice!

Fact: The parent company of that store we both worked at is in the process of reducing 20% of its workforce.

Fact: The store we both worked at has already cut 10% of its workforce and 40% of its sales staff.

All of these cuts have taken place in 2012 or will take place before the end of the year. The health insurance examples are for CY 2010- present.

I will say this, I DO believe the president when he says that he wants to raise taxes to bring in more revenue. I do believe that he simply does not understand that fewer people paying a higher percentage does not solve a revenue problem.

Fred, I am a small business and my business pays taxes at the 35% level. Reducing the tax on small business will create jobs. The LIE that is being told is that this is a tax cut for the wealthy. But that is not true. My company would pay less tax, but the salary that I pay myself would still be taxed at the highest rate.

I don't know about you, but I think it would be nice to put 10+ million people back to work. 10 million more tax payers? Sounds like a better solution to me...

Comment by lenny bello on October 5, 2012 at 12:45pm: no tim you are the dick an on november 6 2012 the country will tell you the same good bye

Comment by Fred G. Slabine on October 5, 2012 at 12:40pm: Tim, I am very proud of your accomplishments! Having worked with you in the day when you were not as successful as you are today! GOOD FOR YOU! I hope all is well and your family is thriving.

Tim, there are people on both sides of the economic spectrum that use the system for their own gain. Let me give you an example. Willard said anyone who did not maximize their deductions should not be president and yet on his newly released tax his did not claim all he could for charitable deductions, thereby he should not be president. HE did to show he paid 14% in taxes, I believe the real reason he wants the job is to eliminate capital gains, leaving him with out any taxes to pay.

I understand and appreciate your message of growth, what I, and others are saying; Willard cannot be trusted! HE will say anything to get elected, is that the type of president you want? What will happen?

Please check out other sources of information other than fixit news, and listening to Rush. Try getting the information from all sources and then make decision. Thank you and keep prospering and spend some quality time with your family.

Comment by Timothy Martell on October 5, 2012 at 12:37pm: Thats great. You ran a used car store for 10 years. How many employee's did you have? Did you provide health insurance for those employees? Or was this a used car lot that consisted of you and your brother?

Why did your business fail? Probably because your expenses exceeded your income. You are making my case. Failed policies had an economic effect that put you out of business. If you had a lot of employee's there are expenses you could have cut to remain in business - if you were a ver small business with no employee's that means, you get cut.

This isn't a dick measuring contest about who worked hard. I am sure many of you are hard working regardless of your station in life - that does not mean you have an understanding of how economics impact small business -certainly, if you have not remained in business...

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