An offer you can't refuse

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Upsetter
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An offer you can't refuse

Post by Upsetter » Tue Sep 22, 2015 10:24 am

Here's the deal. You're going to start a business or expand the one you've got now. It doesn't really matter what you do or what you're going to do. I'll partner with you no matter what business you're in – as long as it's legal.

But I can't give you any capital – you have to come up with that on your own. I won't give you any labor – that's definitely up to you. What I will do, however, is demand you follow all sorts of rules about what products and services you can offer, how much (and how often) you pay your employees, and where and when you're allowed to operate your business. That's my role in the affair: to tell you what to do.

Now in return for my rules, I'm going to take roughly half of whatever you make in the business each year. Half seems fair, doesn't it? I think so. Of course, that's half of your profits.

You're also going to have to pay me about 12% of whatever you decide to pay your employees because you've got to cover my expenses for promulgating all of the rules about who you can employ, when, where, and how. Come on, you're my partner. It's only "fair."

Now… after you've put your hard-earned savings at risk to start this business, and after you've worked hard at it for a few decades (paying me my 50% or a bit more along the way each year), you might decide you'd like to cash out – to finally live the good life.

Whether or not this is "fair" – some people never can afford to retire – is a different argument. As your partner, I'm happy for you to sell whenever you'd like… because our agreement says, if you sell, you have to pay me an additional 20% of whatever the capitalized value of the business is at that time.

I know… I know… you put up all the original capital. You took all the risks. You put in all of the labor. That's all true. But I've done my part, too. I've collected 50% of the profits each year. And I've always come up with more rules for you to follow each year. Therefore, I deserve another, final 20% slice of the business.

Oh… and one more thing…

Even after you've sold the business and paid all of my fees… I'd recommend buying lots of life insurance. You see, even after you've been retired for years, when you die, you'll have to pay me 50% of whatever your estate is worth.

After all, I've got lots of partners and not all of them are as successful as you and your family. We don't think it's "fair" for your kids to have such a big advantage. But if you buy enough life insurance, you can finance this expense for your children.

All in all, if you're a very successful entrepreneur… if you're one of the rare, lucky, and hard-working people who can create a new company, employ lots of people, and satisfy the public… you'll end up paying me more than 75% of your income over your life. Thanks so much.

I'm sure you'll think my offer is reasonable and happily partner with me… but it doesn't really matter how you feel about it because if you ever try to stiff me – or cheat me on any of my fees or rules – I'll break down your door in the middle of the night, threaten you and your family with heavy, automatic weapons, and throw you in jail.

That's how civil society is supposed to work, right? This is "Amerika," isn't it?

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VTNZ
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Re: An offer you can't refuse

Post by VTNZ » Tue Sep 22, 2015 2:48 pm

Sounds like you partnered with a venture capitalist...
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BigCliff
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Re: An offer you can't refuse

Post by BigCliff » Tue Sep 22, 2015 3:21 pm

Mark Cuban- "Entrepreneurs who create something out of nothing don’t care what tax rates are. Bill Gates didn’t monitor the marginal tax rate when he dropped out of Harvard and started MicroSoft (btw, it was a ton higher than it is today). Michael Dell didn’t wonder what the capital gains tax was when he started PC’s Limited, and then grew it into Dell Computer. I doubt that any great business or invention started with a discussion or even a consideration of what the current or projected income or capital gains tax was or would be.

The impact of tax rates on productivity and development is something economists masturbate about, entrepreneurs don’t waste their time thinking about it. We have business to do.

Entrepreneurs live to be entrepreneurs. I have never had a discussion with anyone about starting a business that included tax rates.
Ever.

If anyone that wanted an investment from me made a point of discussing tax rates as an impact on their business, I wouldn't invest in them.

Ever."

http://frontburner.dmagazine.com/2012/0 ... e-economy/
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VTNZ
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Re: An offer you can't refuse

Post by VTNZ » Tue Sep 22, 2015 3:43 pm

I've met two guys very similar to Cuban...

....in the late 70's (a horrible economic time tax wise among others),two guys decided to rent out an abandoned gas station and start up their own ice cream store in Burlington, VT.


Years went by, they grew through niche marketing, and a darn good quality product. They expanded and become large enough to have a bit of a corporate structure to it. Of their own standards and conscience, they stated that no one employee could make more than 7 times what the lowest paid employee....either bring the low ones up with decent wages, or don't let the CEO go bonkers with golden parachutes,etc.

They continues to prosper,and many years later, the tough (and questionable to some) decision to sell out to a larger corporation became a reality.

These "socialists" in the eyes of ideologues, went all capitalist like and sold up and banked it. Good or bad, the sale had contingencies....those two guys were big on social/enviro issues, so they made one of the largest companies on earth (Uni-lever) adhere to donating millions each year as the two guys did. They also demanded that jobs that are in VT, will stay in VT. You can expand outside,but not at expense of vters (smart marketing really).

Those two stoners who gave not a shit for the tax rate, or what economic "label" one uses? Ben and Jerry...
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Upsetter
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Re: An offer you can't refuse

Post by Upsetter » Tue Sep 22, 2015 4:49 pm

VTNZ wrote:Sounds like you partnered with a venture capitalist...
Small business owner actually, very small, less than 50k in revenue. My father is a venture capitalist however, and an economist, has been for upwards of 50yrs, studied directly under ole milt in chicago. He sent me that. And its all true.
BigCliff wrote:Mark Cuban- "Entrepreneurs who create something out of nothing don’t care what tax rates are."
Nope. Wildly successful entrepreneurs like Mark Cuban rarely do. They have more money than they know what to do with despite big brother's plundering ways. Ben and Jerry were too stoned to care and probably didnt pay taxes for quite a while during their start up. Stoners are like that and I can dig it. There is no doubt people, much more often than not, start businesses not as a sound economic decision (for that it is not and the points laid out in my op are a large part of why!!) but as a labor of love. That is besides the point though.

The point is: American businesses operating on thin margins with tough, but necessary, grind it out structures and small scales are the ones that suffer the reality laid out in the OP and it can be debilitating and demoralizing. These are the quintessential "small businesses" you hear so much about in politics, cause they are the backbone of the country despite the walmarts of the world. REVENUES less than 500k, profits 100k or less, working their asses off, and getting taxed to the point where they may as well take a salaried job for 2/3 that cause theyll come out near the same in the end cause of fees/taxes AND WORK LESS.

How many fail for one to succeed? An even better question: how many that failed can lay a big part of the blame at the feet of their "not-so-silent partner"? The answer isnt more fucking programs, paid for by taxes, to help them succeed. The answer is get the fuck out of the way in the first place. Period. Then the blame for failure truly is on the shoulders of the business owner.

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VTNZ
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Re: An offer you can't refuse

Post by VTNZ » Tue Sep 22, 2015 6:11 pm

So how does pops reconcile with farm subsidies, and giant tax breaks for Exxon,etc.??

That said, I'm starting to understand now where your rationale comes from...however just cuz he sent it to you makes it no more true than folks espousing trickle down as working as well....it's a continuous debate as Cuban so hilariously eludes to.

Case in point: Look at the business tax cuts in Kansas....big promises made by the nutter, and growth has been a paltry .2% while the nation has been at 1.2%....promises of 2k jobs a month have amounted in reality to.....260 jobs a month. Yet another example of "getting out of the way"not = economic benefits for the state....just for the few who own those businesses...and I bet they're huge agricorps,etc.

I would assert the the "labor of love" schpiel you laid out is not "neither here nor there..." You do things and come up with things with the skillsets you've either learned thru some degree of edumacation; or,in some instances one is truly gifted (i.e. athlete, artist, statistical savant,etc).

Education in the US ranking wise is going down the gurgler, or is too pricey for college grads to get ahead before they've already used up their most productive years (folks having loans still at 45 for example).

I'm well aware of small business owners; VT is no corporate bastion; quite the opposite actually. And folks tick along, and regardless of what your perosnal tax threshholds are, folks enjoy working and living there. Like Cuban eludes to and perhaps you and pops aren't considering (since there's no fancy graph/way to quantify....an economists nightmare)....is folks care about the big picture of quality of life, that labor of love you dismissed so callously, and living in a good community and if that costs a bit more so be it. If it means no billboards allowed in VT to hock your wares, tough shit...a law made by an R gov. in the late 60's by the by...if your bidness needs to survive off billboards....go to exit 213 in Jersey...I hear there's an opening in the town where HP laid off 5k workers...

Ben and Jerry could have moved to Jersey...they didn't

Magic Hat Brewery is now national, Allen Newman started it in VT....he could've gone next door to NY and gotten a massive tax break for 10 yrs to relocate...but it's still in VT.

That now famous Alchemist Beer aka "Heady Topper"? Yea, well, another VT small bidness, and despite the national acclaim and $$$ staring at the owner....he decided to expand....again in comparatively high tax VT....just up the road in Stowe.

I'm sorry but I just know and have met too many small business owners who do it for the labor of love which almost always coincides with some education in the field of endeavor, and they have no interest in a venture cap dude coming in and destroying their "baby" for ruthless profit mongering...

In your hypothetical, the Alchemist wants to expand, he's got narrow margins (according to you, but does he really?), is taxed high in VT, and hey your dad drops on by and offers a classic venture schpiel...and you move the Alchemist to S. Carolina...where labor is dirt cheap,little tax (but the beer trucks maint. is high cuz nobody is paying for infrastructure) larger population sale base, some half ass demographic study that says, "well, yea, pricey craft beer should work nicely down there....Chucktown is a big foody city,etc."

Except, it turns out, the market down there can only handle so many pricey craft beers....market saturation occurs...and the bidness fails...the demographics of the region don't allow for the growth he had in VT. Ironic though....the venture caps usually never get burned.

But hey, I'm always open ears if you have an economic model that delves deeper than "get out of the way..." That sounds like bidness as usual R style to me....and clearly, by any measure of standard, is not working...

Lol...did you hear in the news this week about the big pharma who got a patent for a 60 yr old drug that costs less than $1 to make and raised the consumer cost by over 5000%???? Greed much? Or should we just get out of the way....and bend over?

Ask your dad about the concept that if guys keep growing bigger and merging to the point where 5-10 corps. run EVERYTHING (and think about wallyworld, telco., media, airlines, energy, banks and food...we're now down to 2-3 of each, can't have 1 cuz monopolies are bad mmmk, and colluding, like the airlines are being currently investigated for is so much more American!)....and the Feds,instead of "getting out of the way", are actually giving them subsidies and tax breaks to ALL of them....

....have you not turned the capitalism into state subsidized socialism? Let alone their oligarchs cornering the access to our elected officials to even lobby for those small businesses you espouse?

I'd be interested in his end game perspective....cuz look around, it's happening.

Final thought: Outside of Vent. Caps and the like going offshore for bigger profits at the expense of the local US manufacturer,one of the largest burdens for small bidness has been healthcare....whereas in other developed countries, they tell private healthco to "get out of the way", and you have healthcare paid for thru your taxes...not your employer. Lol...your dad forgot that in his story...he didn't mention the heathcare costs to US style policy, but rather simply railed on high taxes and emotions to belittle different ideaology/economic policy; simply put, he benefits from the status quo, so the prepackaged offer (I've heard from other guys in similar bidness...it's an old story that suits their worldview imho) is not based on any true compare/contrast...like I said to Bob,using emotional stuff and scary #'s is sop these days.

I gotta go put out the trash and recycling...for as opposed to the Faux low taxes of unfettered Capitalism of the US (nickle and dimed outside of your income tax rates;so in fact yanks % ain't much different than europe, but no healthcare)...my NZ taxes pay for my trash and recycling to be picked up....that saves me a couple hundy/year when compared to the states, for example.
People are assholes because half the people around are of below average intelligence - Shunned

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yard4sale
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Re: An offer you can't refuse

Post by yard4sale » Tue Sep 22, 2015 10:02 pm

Sad part is all that tax money won't even buy the first bomb we drop in Iran.
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Plow
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Re: An offer you can't refuse

Post by Plow » Wed Sep 23, 2015 12:49 am

yard4sale wrote:Sad part is all that tax money won't even buy the first bomb we drop in Iran.
Please, for dog's sake, tell me who paid for the first bomb dropped on Iran. The real sad part is, you have no clue.
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Re: An offer you can't refuse

Post by BigTimber » Wed Sep 23, 2015 7:23 am

Upsetter,

On my "adventure" I was reading a Jim Harrison interview with McGuane. One question was about his political views and his response is my new favorite line...."America has become a dildo that has turned berserkly on its owner."

And that was in 1971......
This place has enough jiggly milkbags, marsupials fisting off, and animated cherubs getting stabbed in the fuck to get anyone shitcanned, if''n their boss can''t take a joke. ~SUAF

Pussy, much like freedom, ain't free.

America has become a dildo that has turned berserkly on its owner. ~McGuane 1971

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Bruiser
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Re: An offer you can't refuse

Post by Bruiser » Wed Sep 23, 2015 7:24 am

Dude next door to me is a "libertarian" which to him means he only pays the taxes he thinks are fair - any tax he can avoid paying is unfair. He definitely doesn't pay gross receipts (7.1875%). He has four kids in public school. Complains about the government, and especially Obama, full time. He told me yesterday that Trump is the man but he also really likes Carson (freedom of religion is not important to him).

That's also a true story.
That sounds awesome in my ears!! (P-A)

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BigCliff
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Re: An offer you can't refuse

Post by BigCliff » Wed Sep 23, 2015 9:05 am

Upsetter wrote:
VTNZ wrote:Sounds like you partnered with a venture capitalist...
Small business owner actually, very small, less than 50k in revenue. My father is a venture capitalist however, and an economist, has been for upwards of 50yrs, studied directly under ole milt in chicago. He sent me that. And its all true.
BigCliff wrote:Mark Cuban- "Entrepreneurs who create something out of nothing don’t care what tax rates are."
Nope. Wildly successful entrepreneurs like Mark Cuban rarely do.
You should have kept reading-
Mark Cuban- "Entrepreneurs who create something out of nothing don’t care what tax rates are. Bill Gates didn’t monitor the marginal tax rate when he dropped out of Harvard and started MicroSoft (btw, it was a ton higher than it is today). Michael Dell didn’t wonder what the capital gains tax was when he started PC’s Limited, and then grew it into Dell Computer.
His point was that actual driven entrepreneurs don't care about the tax rate, only economists and folks looking for reasons to whine about government do.
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Upsetter
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Re: An offer you can't refuse

Post by Upsetter » Wed Sep 23, 2015 10:52 am

Every single person in this country who works hard to support a family has good reason to bitch about the tax rates. Money you could be using to better yourself and the people close to you is taken from you by threat of force and used to feed/house lots of people I wouldnt let near my house or my kids, much less give a bunch of money too.

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