Two small businessmen, two views on taxes
Joe Felt and Shawn Sheeley share friendship and a passion for dirt bikes, but are far apart when it comes to taxes and politics.
Much has been made this election cycle about taxes and what raising them would mean for small businesses. President Obama says people making more than $250,000 a year can afford to pay a little more. Gov. Romney says taxes on upper income people would hurt job creation by discouraging small businesses from hiring.
What do small business people think? As it turns out, they don’t necessarily agree with each other either.
Joe Felt has been a small business owner for most of his career. He owns a small construction company in St. Paul, Minn., that employed 10 people a few years ago. Since the real estate crash, it's down to just Felt.
Across the Mississippi River in Minneapolis, Felt’s good friend, Shawn Sheeley, owns his own small business, with four employees who design and build apps, websites, and interactive installations.
In a lot of ways, Felt and Sheeley are a lot alike: they’re entrepreneurs; they are Twin Cities natives, and they even share the same hobbies.
"Let me just put it this way," says Felt. "Neither of us are probably ever going to play golf. We are pretty aggressive, and ah, we like to play really hard."
Specifically, Sheeley explains, they enjoy riding motorcycles together and dirt-biking. So one day recently, Sheeley asked Felt if he was free that night to work on a motorcycle they're restoring together. Felt said, "That would be great. But there's only one problem. I'm going to be streaming the debate.” He laughs, adding, “Knowing that this could be, you know, kind of an interesting situation."
Why so interesting?
"I'm certain I'll vote for Obama," says Sheeley.
"I will definitely not be voting for Obama," he says.
That's right. Strange as it may seem, given how often "small businesses" are talked about this election cycle as if they are one monolithic block, not all small businesses or their owners are alike, even if they both ride dirt bikes.
So what does it mean when a politician says his policies are “small business-friendly”? Let's break it down a little, using Obama's proposal to raise taxes on incomes over $250,000 as an example. Shawn says he hopes his business has a good enough year that a tax like that would affect him. He also says it would be an incentive to expand his business.
"If you tell me that if I make more than $250,000 a year, that I'm going to pay a higher tax, I'm more inclined to plow that money back in to the business and hire people, so I can effectively have a lower tax rate," says Sheeley.
If he did get charged an extra $10,000 or so in taxes? Sheeley says, "I don't see that hindering me hiring or changing the way I would do business."
Felt disagrees. He worries higher taxes could hinder small business owners and crush their entrepreneurial spirit.
"The tax percentage goes to a certain point and people are going to say, it's no longer worth it," says Felt. "Why not just take the money I have earned and go invest it in something a little more benign and just sit on my boat off of Key West and drink gin and tonics?"
That’s not the only thing that bugs Felt about tax hikes. “As business people we work long houyrs and we take a lot of risks. But we’re disrespected once we give that money to the government, and we watch it just being thrown down a hole somewhere.”
Joe points to his wife, who’s in the military. Recently, the government flew her to Wisconsin and put her up in a hotel for the weekend so she could attend a training session for six hours.
"A six-hour Powerpoint presentation," says Felt. "We're probably looking at the $2,000 range to make this all happen. That's tax dollars that could have been spent other places."
Felt says that’s why he’s voting for Romney, that as a businessman he'll be inclined to cut waste.
"Well he's not proposing to cut any waste," counters Sheeley. "I mean, he's not talking about cuts at all. He's talking about spending more money."
"Well, the perfect candidate is not running," Felt says. "Actually there is no perfect candidate. I just think the direction he would like to head is more the direction I would like to see the country go."
There is one thing that comes up that Felt and Sheeley do agree on. Both are actually kind of sick of all the attention small business owners like them are getting this fall.
"It's the new kissing the baby," says Sheeley. "For both candidates, the conversations around small businesses, I feel, are pandering." This time, Felt agrees.
And in a heated election year like this one, Felt and Sheeley say maybe it's safer to leave it at that -- and get back to their motorcycles.
"We just decided to quit arguing, or I decided to go," Sheeley says.
Felt adds, “We probably should have stayed on the motorcycle's twist and throttle. It doesn't matter what your politics are when you've got your throttle in your hand.”