Park City Resort Owner to Fire Staff if Obama Wins
By Steve Casimiro on October 12th, 2012
Talk about scare tactics. The gazillionaire owner of the Westgate Park City Resort (not to be confused with the ski area), who’s best known for building the largest new private home in United States, the 90,000-square-foot Florida Versailles, told his 7,000 employees that if Obama wins reelection and raises taxes on the rich, he’s going to eliminate jobs. “If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company,” David Siegel wrote in a letter. Siegel’s missive is unlikely to generate much sympathy from his workers, as it’s mostly one long complaint about how unappreciated the super-rich are. “They want you to believe that we live in a class system where the rich get richer, the poor get poorer. They label us the ‘1%’ and imply that we are somehow immune to the challenges that face our country. This could not be further from the truth,” Siegel wrote. Four words, buddy: Ninety. Thousand. Square. Feet. Via Salt Lake Tribune.
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Three words, buddy: Seven. Thousand. Jobs.
To put his “taxes hurt my business” myth to rest: Taxes on businesses are only on profits. Expenses like wages, supplies, rent, etc are deducted first from revenue and then the remaining profit is taxed. His business is likely not set up as a sole-proprietorship so even if his business tax rate was 99% he could still pay himself a $5,000,000 salary. If taxes are too high and he wants to get out of business, then another business will come into meet the demand.
These people call progressive taxation “socialism” but the idea comes from Adam Smith, the founder of capitalism. “The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”
Citizen, you are correct that taxes are levied against profits, however the rest of your analysis is completely incorrect. Although I’m not an accountant (and neither are you by the sound of it), as someone who has tried to start and operate a business (LLC) I can speak to one point on taxes.
In the view of the IRS, the profits of the business are considered the owners income regardless of how it’s set up (S corp or C corp).
How about an example? Let’s say you own a company and it makes $1 profit in a particular year. How would you pay yourself 5 million when you made $1? You can’t pay yourself what you don’t have. You certainly wouldn’t pay yourself before you pay for electricity, mortgage on a building, supplies, or your employees wages!! Hummm….so money doesn’t just appear out of thin air?? Weird.
Also, let’s assume that your small business does extremely well and you make $250,000 in profit (our president’s cut-off for being considered wealthy). Now let’s assume the tax rate is 99% on that profit as you suggest….let’s see, carry the one, and you end up keeping 2,500. That’s not really a great incentive to stay in business the next year is it?? Even the less fortunate folks on welfare have more disposable income than that per year!!
Now I’m not making an excuse for this guy’s use of scare tactics, cause the guy is obviously doing well for himself (I mean just look at those store bought’s his wife has), but if we want to move forward as a country, we need to start holding discussions in the realm of sanity.
Three more words: ill fitting shirt.
Educationally Concerned, I think you might need to review your information on corporate taxes. A C corp doesn’t have the income pass through the owner’s personal income, but an S corp does. If Central Florida Investments is a C corp and it has revenues of 1 billion, so Mr. Siegel can probably pay himself $5m a year, which will be deducted as part of the corporation’s expenses. He would then have to pay individual income tax on that $5m. If CFI is an S corp then I almost understand him getting upset at higher taxes, but have no sympathy for someone complaining about taxes when they have more money than they could ever possibly spend.
@Citizen: so now you get to decide what is too much money to spend and how much people should have to pay in taxes? The guys got a right to free speech and all that (no matter how idiotic he sounds) And he’s also got a right to do with whatever he wants to with his business (also no mater how idiotic he sounds) Don’t like him or his company then don’t work there.
Actually Ben, what he did falls outside of free speech and is against the law: http://www.law.cornell.edu/uscode/text/18/594
“Siegel never mentions Obama by name, nor does he explicitly instruct the employees to vote for Republican challenger Mitt Romney. In fact, Siegel encourages them to vote for the candidate who they think will serve their interests best.”
You’re cherry-picking a bit, Ben.
“”The economy doesn’t currently pose a threat to your job. What does threaten your job, however, is another 4 years of the same Presidential administration,” he wrote.
Much of the letter is devoted to defending the super-rich, who Siegel says are unfairly maligned by the Obama administration and the media who believe they don’t pay enough taxes.”
I might point out that presidents aren’t the only ones complicit in (potentially) raising taxes. It requires the legislative branch too. Whichever side you are on with this topic, let’s be honest and share the blame accurately.
Do you not see that saying “current President” is the same as saying “Obama?” Saying “I will lay off employees if the current president is reelected” seems like coercion or intimidation to me which is against the law I posted. Sadly, no prosecutor wants to go up against a billionaire.
FACT: He will not expand or contract based on who is president, he will expand or contract based on the economy and opportunity to succeed. He believes he can accurately predict that Obama will slow down economic growth.. He’ll likely be eating his words in a year.