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Interoffice Memo

January 5th, 2009 · 21 Comments

memo

To All My Valued Employees:

There have been some rumblings around the office about the future of this company and, more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn’t pose a threat to your job. What does threaten your job, however, is the changing political landscape in  this country.

However, let me tell you some little tidbits of fact which might help you decide what is in your best interests.

First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner, there is a Back Story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Mercedes outside. You’ve seen my big home at last year’s Christmas party. I’m sure all these flashy icons of luxury conjure up some idealized thoughts about my life.

However, what you don’t see is the BACK STORY:

I started this company 28 years ago. At that time I lived in a 300-sq.-ft. studio apartment for 3 years. My entire living apartment was converted into an office so I could put forth 100% effort into building a company– which, by the way, would eventually employ you.

My diet consisted of Ramen Pride noodles because every dollar I saved went back into this company. I drove a rusty  Toyota Corolla with a defective transmission. I didn’t have time  to date. Often times, I stayed home on weekends while my friends went out drinking and partying. In fact, I was married to my business– hard work, discipline and sacrifice. 

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting the Nordstrom’s for the latest hot fashion item, I was trolling through the discount store extracting any clothing item that didn’t look like it was birthed in the 70′s. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money and my life into a business with a vision that eventually, someday, I too will be able to afford these luxuries my friends supposedly had.

So, while you physically arrive at the office at 9am, mentally check in at about noon and then leave at 5pm, I don’t. There is no “off” button for me. When you leave the office, you are done and you have a weekend all to yourself. I, unfortunately, do not have the freedom. I eat and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a 1-year-old, special-needs child. You, of course, only see the fruits of that garden– the nice house, the Mercedes, the vacations– you never realize the Back Story and the sacrifices I’ve made.

Now the economy is falling apart and I– the guy that made all the right decisions and saved  his money– have to bail-out all the people who didn’t. The people who overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed more than a decade of my life for. 

Yes, business ownership has is benefits, but the price I’ve paid is steep and not without wounds.

Unfortunately, the cost of running this business and employing you is starting to eclipse the threshold of marginal benefit, and let me tell you why:

I am being taxed to death, and the government thinks I don’t pay enough. I have state taxes. Federal taxes. Property  taxes. Sales and use taxes. Payroll taxes. Workers compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man to manage all these taxes and then, guess what? I have to pay  taxes for employing him. Government mandates and regulations, and all the accounting that goes with it, now occupy most of my time.  On Oct 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes. You know what my “stimulus” check was? Zero. Nada. Zilch.

The question I have is this: Who is stimulating the economy? Me– the guy who has provided 14 people good-paying jobs and serves over 2,200,000  people per year with a flourishing business? Or the single mother, sitting at home pregnant with her fourth child, waiting for her next welfare check? Obviously the government feels the latter is the real economic stimulus of this country.

The fact is, if I deducted (read: stole) 50% of your paycheck you’d quit and you wouldn’t work here. I mean, why should you? That’s nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree, which is why your job is in jeopardy.

Here is what many of you don’t understand: To stimulate the economy you need to stimulate what runs the economy. Had suddenly the government mandated to me that I didn’t need to pay taxes, guess what? Instead of  depositing that $288,000 into the Washington black-hole, I would  have spent it, hired more employees and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But, you can forget it now.

When you have a comatose man on the verge of death, you don’t defibrillate and shock his thumb, thinking that will bring him back to life, do you? Or do you defibrillate his heart? Business is at the heart of America and always been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers Washington believe the poor of America are the essential drivers of the American economic engine. Nothing could be further from the truth; this is the type of change YOU can  keep.

So where am I going with all this? It’s quite simple.

If any new taxes are levied on me, or my company, my reaction will be swift and simple– I’ll fire you. I’ll fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV and your child’s  future. Frankly, it isn’t my problem anymore.

Then, I will close this company down, move to another country, and retire. You see, I’m done. I’m done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed and, with it, will be my citizenship.

So, if  you lose your job, it won’t be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the constitution and will have changed its landscape forever. If that happens, you can find me sitting on a beach, retired, and with no employees to worry about. 
 
Signed, 

THE  BOSS

Tags: Entries

21 responses so far ↓

  • 1 Sam B. // Jan 5, 2009 at 8:22 pm

    Hey Boss,
    So which country are you moving your business to? The one with a strong infrastructure and a judicial means for enforcing contracts, or the one where your power may or may not be on any given day and where there is no guarantee that, if they other guy breaks his part of the deal, you will get satisfaction.

    Yes, taxes are high. I pay a lot of them myself. But you (not just welfare mothers) receive significant benefits from the government, as well. Judicial recourse. Streets. Public schools. Security. You benefit from various externalities while not having to fully pay for them; at the same time, it is possible that you generate negative externalities in the course of your business, the costs of which you don’t fully internalize.

    Which is not to say don’t vote for lower taxes. That’s fine, and it’s practically a passtime here. But don’t pretend you don’t get any value for the taxes you pay.

    Sincerely,
    An employee

  • 2 queuno // Jan 5, 2009 at 9:14 pm

    Hey boss.

    Good luck operating your company in Mexico. In fact, I’ll help you pack.

    If you haven’t pulled profits out of your company, then you’re a sucker. Maybe you don’t deserve to survive.

    Mark Cuban put it best: “As any successful CEO will tell you, leadership, vision and motivation has far more impact on results than any tax cut or increase. While I prefer lower taxes, I can tell you that no entrepreneur or CEO worth a damn in this country gives up or works less because of a change in tax policy. In this country you work harder to achieve your dreams and goals.”

    Maybe you’re not worth a damn owning a business or working for. In fact, maybe your competitors are already calling me…

    Sincerely,
    Your employee who’s praying his kids don’t get sick on your crappy insurance plan and who works 14-hour days for you.

  • 3 David // Jan 5, 2009 at 9:39 pm

    Ha! This “memo” was forwarded to me by an entrepreneur who pretty much embraces everything it says. After a couple of days (in case anyone else has two cents to add), I’ll send your replies back to him.

  • 4 queuno // Jan 5, 2009 at 10:28 pm

    Really, it’s amazing he still has 14 employees.

    Good riddance.

    Too bad his company isn’t publicly traded, or it’d be great to short his stock…

  • 5 David // Jan 5, 2009 at 10:33 pm

    queuno,

    I just wanted to clarify: The guy who forwarded this to me is NOT the guy in the memo. I think someone forwarded it to him and he liked it.

    For what it’s worth, the guy who sent this to me is a pretty nice guy. He just happens to have “Alex Keaton” ideals.

    Also for what it’s worth, I am pro-capitalist at heart and agree with a lot that’s in that memo.

  • 6 queuno // Jan 5, 2009 at 11:03 pm

    I am also pro-capitalist at heart, but I’m anti-extreme-capitalism…

    Seriously, if this is how this guy reacts to changing tax codes, how the heck did he ever make it 28 years to begin with?

    (And I got that you didn’t write it.)

  • 7 Tricia Groe // Jan 6, 2009 at 1:16 am

    Thanks for posting this memo…it states strongly what so many small business owners are feeling. I am forwarding this post to my friends and colleagues. Please keep up the good work; I appreciate your website.

  • 8 Karron // Jan 6, 2009 at 1:50 am

    And I will add my AMEN to the Boss. I often wonder why this great country is so stupid about taxes. A flat tax of 17% would fund all of the government we need and have much left over. In Hong Kong they have a 10% flat tax and guess what, they were doing just fine. We paid less taxes there than anywhere else we lived in the world, which gave us much more money to invest or spend.

    Big government doesn’t have to tax anyone to death, all they have to do is be equitable straight across the board, everyone pays the same percentage no matter how little or how much they make.

    It is utterly ridiculous that anyone would have to be taxed like we are here in the US. The EU may be worse, but not by much. If I were the boss, I would have shut the doors and moved on long ago. Somewhere in the Caribbean with warm water and lots of peace and quiet.

  • 9 xoxoxoxo // Jan 6, 2009 at 2:28 am

    The memo does not say he is moving his company to another country. It says he will shut the company down, move to another country and RETIRE.

    What no one seems to understand is that according to reports, the reason the lending institutions REQUIRED a “bailout” was because of the government regulations and taxes etc. They FAILED because they stopped generating profits when huge numbers of their clients defaulted on their loans….oh, and because the Washington D.C. elite were getting rich at the expense of everyone else. The auto-industry-same thing.

    I’m not saying that “big businesses” aren’t at fault on this too. Mismanagement, greed, stupidity, and ineptness result in failure often. But a company with 14 employees isn’t big business-it’s small business. And the government is known to crush them with regulations and taxes and fees.

    I’m sorry, but if my husband was working 14 hour days and we weren’t given adequate health benefits and weren’t making enough to purchase better or supplemental insurance of our own, we’d be changing jobs ASAP. We’ve worked hard to build his career skills and experience to the point where he can work in environments he likes, get paid well, often sees bonuses and 401K matches, and have health, dental etc benefits that are worth the deduction from his paychecks. It is BECAUSE of his hard work and early career sacrifices that he can now change jobs if things become unsatisfactory and unfair.

    I know not everyone can do that. I realize how blessed we are and thank God for it every day. We’ve had lean years and suck jobs, but we’ve kept going and saved and sacrificed and we still constantly guard against the future unknowns by squirreling away every spare dime we can “just in case”.

    And as far as the ‘perks’ available to “all who pay taxes”…that sounds great if you live in a city that has functioning streets, sewers, water systems, and adequate police forces. Or if you live in an area where the “public schools” are not crime ridden, drug and violence filled ghettos. You know…like in “big” cities where all those Fortune 500 companies are paying more and more taxes into the system…why is that? Is it because they need to contribute even MORE tax dollars? Or because there are more and more consumers who don’t pay any taxes outside of sales tax at all? Whose credit is so bad they can’t own property (or who got a pity loan because the government said they deserved one and then defaulted on the mortgage they were sold but couldn’t actually pay?) Who want a handout instead of a hand up? Who think “someone else” should take care of it?

    This is NOT the government envisioned and set up by our founding fathers. They wanted a VERY limited government, not one that rescued businesses or individuals from experiencing financial problems or the consequences of their own choices.

  • 10 onelowerlight // Jan 6, 2009 at 3:05 am

    This guy has issues, and it seems that he’s in the habit of taking them out on other people. From the way he describes his initial sacrifices for his business, it sounds like he’s had quite a miserable life, killing himself for something that is ultimately material and transient.

    This is our paradigm of success in this country? Making ourselves miserable for some nebulous vision of wealth that we’ll enjoy decades from now? Giving up our time and our talents to worship the golden idols of “the company” and “the economy”? Objectifying our fellow men to the point where we see each other as tax liabilities rather than living, breathing human beings?

    How utterly disgusting. If this is the modern American dream, count me out of it. I have a lot of pity for this man, but not an ounce of sympathy.

  • 11 Sam B. // Jan 6, 2009 at 3:06 pm

    xoxoxoxo,
    “And as far as the ‘perks’ available to “all who pay taxes”…that sounds great if you live in a city that has functioning streets, sewers, water systems, and adequate police forces.”

    You have me curious: where in the U.S. do you live that doesn’t have functioning streets, sewers, water systems, and police forces? I’m genuinely curious. FWIW, though, my daughters (when they are old enough) will attend public schools in places that you probably assume are drug-filled ghettoes, although frankly, from what I’ve seen of public schools here in New York City, that is a gross, gross caricature.

    You are right that the details of our current government were probably not anticipated by the founders. Neither was the current socio-political or economic state of the world. The country was founded during an agrarian period; we’re now in a post-industrial age (probably a post-information age even); thank goodness the Constitution provides the flexibility to have a functioning government in 2009, without requiring it to be identical to the government of 1800.

  • 12 Andy E. Wold // Jan 6, 2009 at 3:21 pm

    Wait, stating that with Hong Kong’s 10% flat rate “they were doing just fine” is ridiculous.

    How many miles of intertstate highway do they have to build, maintain, and repair? None.

    How much do they invest to protect their natural preserves, scenic landscapes, and open lands? None — they don’t have any!

    Do they spend HUNDREDS OF BILLIONS of dollars on an out-of-control military budget? No, they nor anyone else but us does.

    Yes, this wonderful country that we live in does require revenue to keep it running. Could we better manage those expenditures? Yes.

    And, to Mr. Boss, a flat tax of 17% of a laid off worker’s salary is still $0.

  • 13 Karron // Jan 6, 2009 at 11:15 pm

    Have you EVER lived in Hong Kong? Do you have a clue about how it is set up? Hong Kong not only has the island that is the city of Hong Kong, it has numerous outlying Islands and it also includes the Kowloon side of the mainland that goes far inland that is called the SAR. Special Administrative Region.

    As for natural preserves etc. Get out a map, look it up, I promise there are lots of places like that in the SAR that is called Hong Kong.

    For all that it is now part of China again, Hong Kong does have to manage on its own budget. It may not maintain a military, but it has a VERY well trained police force that can double as a militia. It also maintains one of the best metro systems for transportation I have ever seen, almost as good as Japan.

    AS for interstate, it has miles and miles of it to build and maintain. On the islands, it also has miles of road and metro links to maintain. It has good hospitals, some a lot better than others, but they maintain them too. Obviously, YOU have never traveled far from your personal puddle.

    Before you go jumping at people who have been there done that, maybe you ought to get out of your oh so comfy armchair and see what the rest of the world is REALLY like. Then you might have some right to start spouting off about what you don’t know.

    One thing that really bugs me about Americans is that most of us sit on our collective rear ends and think a weeks visit to Mexico makes us world travelers. Get a passport, apply for a visa and work abroad for four or five years in a socialist, communist country. Then you might understand world politics a bit more and how they affect the US.

    I still think a flat tax is the way to go.

  • 14 xoxoxoxo // Jan 7, 2009 at 6:32 pm

    Sam-
    “You have me curious: where in the U.S. do you live that doesn’t have functioning streets, sewers, water systems, and police forces? I’m genuinely curious.”

    Amend my comment to read: “That sounds great if you live in a place where the streets, sewers, water systems etc. are maintained satisfactorily, and the police and public servants are paid well and monitored adequately to prevent corruption”.

    My point is that despite the billions of tax dollars already being collected for the purpose of providing the public services you mentioned, according to the President-Elect, the need is great enough to propose massive Federal spending to correct the U.S.’s infrastructure.

    People usually have no problem paying to have things done well and maintained in an acceptable manner, they usually resent having to pay for things that aren’t.

    Karron,
    If a flat rate from everyone is good enough for God, it’s good enough for me. What I DO have a problem with is a small minority being required to pay 25-30% or more in taxes (and a group I have never and will never find myself in so no bias here) and the vast majority being required to pay a smaller percentage, and even nothing at all, for the exact same access to public venues and benefits.

  • 15 xoxoxoxo // Jan 7, 2009 at 7:22 pm

    And one last comment on this thread.

    What is the most disturbing to me is that without being given absolutely zero information about how “the Boss” treats his employees or spends his portion of the profits generated by this business, several people automatically judged him as a tightwad, taskmaster and miserable materialist whose only concern is money.

    It doesn’t indicate that he lives on a huge estate it says “nice house”. It doesn’t indicate that he owns a private jet or collection of expensive cars, it says he drives a Mercedes. It indicates that he goes on vacations, but NOT that he vacations for weeks on end at the most exclusive resorts in the world. It indicates that he pays his employees well, NOT that he provides them with crappy insurance benefits.

    The man in the memo built a business that provides a living for 14 other families outside of his own. He pays income taxes, property taxes and sales taxes-just like the rest of us do. BUT he also pays a SLEW of other taxes that most of us never will.

    How many of us would be willing to invest in something that would LOSE value over time and provide less and less income the longer we worked for it? How many of us would invest in a fund that caps out when we are 45 and loses income steadily from that point on? For this man, this ‘company’ constitutes his retirement fund-his security, and he worked harder to earn it than most of us ever have to to earn ours.

    Greedy? Extremely capitalistic? Views human beings as tax liabilities? Maybe it’s just me, but I think it’s naive and arrogant to attempt to portray “the Boss” as anything other than justifiably angry and frustrated… and heaven knows that is the one place we have all been.

  • 16 xoxoxoxo // Jan 7, 2009 at 7:24 pm

    Second sentence doesn’t make sense. Sorry.

    “What is the most disturbing to me is that with absolutely zero information about how “the Boss”…”

  • 17 onelowerlight // Jan 7, 2009 at 7:47 pm

    What gets to me is how the boss describes himself as “married” to his work. The tremendous sacrifices he makes for “the company” (giving up dating, free time, eating ramen, living in a studio apartment) strike me as radically disproportionate. I believe in hard work and self reliance, but this man takes it to too much of an extreme. What he is describing here is a form of modern idolatry–”the company” is this man’s god.

    I might be a little quick in my personal judgments of this man, but I believe that his “dedication” and “hard work” is not exemplary at all; I believe that it is unbalanced, unhealthy, and (from a gospel perspective) completely unjustified.

  • 18 Andy E. Wold // Jan 8, 2009 at 12:16 am

    Karron,

    Please do not assume that I am an “American armchair” person. I do have a well-used passport, I have been to several continents, I have lived in a variety of countries.

    Comparing the 426 square miles of Hong Kong S.A.R. to the vastness of the United States, is like comparing your crate of oranges to my apple orchards. You could nearly fit two Hong Kong S.A.R.’s in the small county that I call home. My daily commute to work is longer than the distance across it.

    I apologize for overstating the minimal amount of government spending that Hong Kong requires, but in comparison to the United States, it is very minuscule.

    Would a flat rate tax be fair? No. Only the rich would benefit from it.

    How could it be made fair? If every tax payer received free food, lodging, transportation, medical and education — then a flat tax would make sense. Until then, it is the rich stealing from the poor.

  • 19 Karron // Jan 10, 2009 at 2:51 am

    A flat tax means that you only pay the same percentage as the next person. The more you make, the more you pay. How does that benefit the rich over the poor?

    Even a non math person like me gets that. It’s like tithing, ten percent for everyone, the more you make the more you give.

    Geesh! some people.

  • 20 Andy E. Wold // Jan 10, 2009 at 5:26 am

    A flat tax does unfairly affect the poor.

    Try to imagine eking out a living on a minimum wage. Now try imagining how difficult it would be to merely survive when you are giving up the same percentage of your insufficient paycheck as the millionaire living next door.

    A millionaire paying $100,000 in taxes still has $900,000 to buy the “necessities” of life.

    A poor man earning $15,000 per year paying $1,500 in taxes (assuming $1,376 in overtime, above his $6.55 per hour wage.) He will be looking for a second job just to survive, and a third job to give his children a decent education.

    Now a flat tax will not allow the government to allow this man to keep his $4,500 from the three jobs he needs to work in order to survive and provide for his family.

    And yes, the $4,500 does seem like a lot, until you consider that it is just a simple 0.45% additional tax that the millionaire could easily do without. But, being a flat-tax, he would never have to pay 10.45% in taxes.

    A flat tax simply allows for those who have more to keep more and for those who have not to keep less.

  • 21 frankg // Apr 6, 2009 at 1:12 am

    Andy E. Wold:

    It’s called “minimum wage” for a reason.
    Its expected that one tries to better themselves, promote themselves, gain experience and skill, make themselves more valuable to employers, and create opportunities, or who knows-start a business-not stay at “minimum wage” forever.

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