New Frames

Small biz owners rejoice the end of Mult. Co's 3 yr. tax

Some of you may want to throw tomatoes at me for saying this, but I'm glad as hell that the three year Multnomah Co.'s personal income tax of 1.25% is over.  For those of you who run an S-Corp or an LLC and operate your small bidnesses along with living in the county, well, you know what I'm talking about. 

To make a long story short, those of us who who file taxes under S-Corps and LLC's don't get taxed on company profits at the corporate level when we pay the feds and the state.  Instead we fill out what is called a schedule K-1, which passes on those reported profits to the companies' shareholders who then have to report them on their 1040s.  Most S-Corp and LLC shareholders are typically family members who work in the business or are a single owner.  As bidness owners of these entities we also compensate ourselves through payroll, dividends, and or other types of compensation.  No matter what the compensation form, it all ends up on our 1040s and individual state tax forms.

In Multnomah County the business tax works the same way, but instead of reporting it on a personal tax form it all gets shoved back onto a business form which is taxed at 1.45%.  When the Mult. Co. individual income tax was introduced in '03 for three years, those of us who were paying 1.45% to the county on compensation to ourselves as shareholders along with K-1 reportings ended up paying another 1.25% on those exact same amounts as individuals.  The same government entity, in this case the county, taxed us twice on the same money. 

Readers of this blog know that I'm a progressive liberal.  In other words, I understand that we have to pay taxes, as painful as they may be, in order to have a functioning, civilized society.  But sometimes I think small business owners, many of whom struggle to pay themselves something that would qualify as a middle class income, get the short end of the stick.  It's tempting to buy into the anti-tax rhetoric out there.  I'll refrain from that, but I can certainly understand why many small bidness owners tend to vote for Republicans who promise to cut their taxes.

John Dean analyzes W's presidential personality type

Are you wondering if Bush is an active/positive prez like FDR?  Or a passive/positive like Reagan?  Or passive/negative like Thomas Jefferson?  Or maybe he's an active/negative like Woodrow Wilson, LBJ and Nixon... John Dean has an insightful piece on where Bush falls and why we are in more trouble than we realize as a result of W's type.

Will Oregon's "Party of God" limit usury

It will be interesting to see how Republicans vote in today's special session in Salem on Oregon's payday loan industry.  With so much attention being given to the issue, perhaps they'll vote for stricter regulations, but I doubt with much enthusiasm.  Republicans in this state have been reluctant to go there, despite the party's so called claim on "morality", as in "Christian morality."  Ironic, isn't it?  It's pretty clear where the Bible stands on usury, and Jesus definitely made a big fuss about it, but Oregon's "Party of God" has generally avoided the issue while taking powerful stands on abortion (not much about that in the Bible) and limiting the rights of gays.

I'm the last one who will claim any expert knowledge on the Bible, but I do come from a long line of traditional Scandinavian Lutherans.  It was pretty clear to me growing up that borrowing money was a big NO NO.  My grandfather built a bidness purely on sweat equity.  In the minds of my grandparents, borrowing money and paying interest on it was just as bad as being a "money lender" because in paying interest you would be giving your money to someone who was un-Christian, or immoral because you were helping them take advantage of people in more desperate situations. 

Interestingly, this kind of thinking has all but disappeared today, so much so that not only credit card companies, the sugar daddies of the "Party of God", can get away with charging 21% interest and higher rates, but payday loan outfits can sit pretty on 500% interest.  What would Jesus think about that?

Intel wants you and me to pay for schools

The O actually had a good piece yesterday on Oregon's dwindling tax collections from corporations doing bidness in the state.  The title and subheading said it in a nutshell:

Feeling taxed?  Not big business
Two decades of cuts have slashed Oregon's corporate tax burden, and households are footing the bill

Yup.  In fact, Oregon's corporate tax collections are the smallest, percentage wise, in the nation.  No other state asks so little of its corporate players.  And what's that about cutting business taxes to attract business... and didn't we have the highest unemployment in the nation during the worst part of the recent recession?   

The irony of it all is how corporate big wigs complain how Oregon needs to provide better schools and services in order to attract quality employees to their companies.  That's why they always support local school levies and household income tax increases.  It's not coming out of their pockets, but they receive the benefits.

What's worse is that both Dems and Repubs in Salem have pushed through these tax cuts for corporations.  And when they turn around and pass tax legislation that pushes the bill onto you and me, they wonder why in the hell we vote it down when anti-tax groups put it on the ballot.  Then we get state senators like Ginny Burdick complaining in a recent debate about how it's the voters' fault that the legislature can't solve school funding issues.  I suppose one could argue that case, but when legislators have cut corporate taxes by more than half over the past two decades it's hard to put the blame solely on the voters.

Anti-tax activists and legislators claim that if we increase taxes on these corporations that they'll leave the state.  Intel has become famous for using these threatening tactics.  But which state will they go to?  Oregon has the lowest corporate tax burden in the nation!

Frontline's "Tank Man"

Did anyone get a chance to watch PBS' Frontline yesterday evening?  It was a captivating episode about China since the 1989 Tienanmen Square protests through today and creatively wrapped around the "tank man."  Remember, the guy who, after hundreds of people were killed and thousands injured, suicidally stood in front of those Chinese tanks?

I was wondering if anyone else was as creeped out by this Frontline episode as I was?  I mean, here in America we're kind of given the story line that China's huge economic success is a great thing, but it was hard to believe that after watching Frontline last night.  We've almost forgotten that the Chinese government is still under one party Communist rule, but last night for those of us watching, we were reminded in stark detail how authoritarian the Chinese Communist government still is.

Its newly minted 250 million middle class citizens seem to live in a Matrix-esque kind of situation.  The government has enabled them to have their cars, cell phones, computers, fashions, etc. with the understanding that no one will decide to take the red pill.  And for those who do, Yahoo will help the Chinese government track down the IP addresses that are being used by red pill takers.  Google helps the government by preventing anyone from learning about the red pill and Cisco provides the networking capabilities for the government to find out if anyone is researching the red pill on the Internet.  Totally creepy.

A Frontline journalist showed the famous Tank Man photo to four Chinese university students, and not one of them had any idea what the photo was.  One thought maybe it was a parade.  The photo has been censored out of existence in China, and Google has helped make that possible.

As for the other 750 million Chinese citizens... well, it seems they've been left behind either in poverty stricken rural areas or poverty stricken urban areas where they work in sweat shops for slave wages, which usually get cut rather than raised because companies like Wal-Mart demand cheaper socks and bed spreads from the vendors who employ the sweat shop workers.

There is some seriously disturbing video clips in the Frontline episode.  What makes it even more disturbing is the fact that the US is so completely and utterly dependent on China's goods and debt financing.  So don't buy things made in China... oh, I forgot everything is made in China.

Issuing a recall on my previous Dagoba entry

The other day I urged readers to give Dagoba Chocolate a chance to do right by their consumers during their recall.  I did this because I also own a bidness in the natural foods industry in Oregon and believe that Oregon natural food companies hold high standards in the industry.  In fact as I noted in my post, Oregon gourmet and natural food companies have a great reputation nationally with retail buyers, distributors and the like.  But as I am following the Dagoba recall story I'm having second thoughts about how they are handling this.

Yesterday the O reported that Dagoba is refusing to release the lead testing results from their products.  Jeff Williams, the COO of Dagoba, told the O he didn't have time to talk to a reporter because he was with FDA officials.  Um, this would have been a good time to say, "I will return your call as soon as I am done.  What time would be a good time to reach you...?" 

Moreover, customers who are calling Dagoba with their concerns are not getting any answers.  They're being told to go see their doctors if they have symptoms.  That's it, "Go see your doctor."  That's not very reassuring.  The Dagoba people need to study the Odwalla e-coli case in order to learn about how to treat customers who are the victims of their bad products.  Not only that, they don't seem to have a media relations team that is keeping their lines open to reporters.  In the Odwalla case, the company understood that the media was an important component in communicating with the public:

On all media interviews, Williamson expressed sympathy and regret for all those affected and immediately promised that the company would pay all medical costs. This, allied to the prompt and comprehensive recall, went a long way towards satisfying customers that the company was doing all it could.

The mistake that Dagoba is making is that they are focusing on themselves without understanding that it's about their customers who have eaten the recalled bars.  If they think they are keeping people from panicking by withholding the test results and saving their company in the process, then they are sorely mistaken. 

Note to Dagoba:  Get a grip you guys.  You have a lot of customers who are scared shitless.  You need to help them NOW. 

Kevin Phillips: must read commentary

Kevin Phillips, former Republican strategist for the Nixon administration, has written an outstanding piece of required reading, How the GOP Became God's Own Party.  In it he describes the toxic combination of alliances that have formed the modern Republican Party and how fearful Democratic leaders have done absolutely nothing to challenge this dangerous threat to the health of American democracy.  The focus of his commentary points to the rise of religious fundamentalism in GOP politics and why it is the most toxic ingredient in the party's axis of interests, which include:

...the oil-national security complex, with its pervasive interests; the religious right, with its doctrinal imperatives and massive electorate; and the debt-driven financial sector, which extends far beyond the old symbolism of Wall Street.
(a.k.a. oil, fundamentalism and debt)

According to Phillips, America's debt and oil dependency are bad enough in and of themselves, but add religious fundamentalism to the mixture and we're in for a world of hurt:

...more danger lurks in the responsiveness of the new GOP coalition to Christian evangelicals, fundamentalists and Pentecostals, who muster some 40 percent of the party electorate. Many millions believe that the Armageddon described in the Bible is coming soon. Chaos in the explosive Middle East, far from being a threat, actually heralds the second coming of Jesus Christ. Oil price spikes, murderous hurricanes, deadly tsunamis and melting polar ice caps lend further credence.

The potential interaction between the end-times electorate, inept pursuit of Persian Gulf oil, Washington's multiple deceptions and the financial crisis that could follow a substantial liquidation by foreign holders of U.S. bonds is the stuff of nightmares.

And to make matters worse, with fundamentalism playing such a vital role in the Republican Party, the party is successfully discrediting science, the very field of study that propelled America forward in the last century.  When science is discredited the reality of today's crucial challenges are not only ignored but dismissed as quackery:

These include Bible-based disbelief in Darwinian theories of evolution, dismissal of global warming, disagreement with geological explanations of fossil-fuel depletion, religious rejection of global population planning, derogation of women's rights and opposition to stem cell research.

...No leading world power in modern memory has become a captive of the sort of biblical inerrancy that dismisses modern knowledge and science.

Although Phillips briefly addresses the fact that this axis of danger has gone unchallenged by Democratic leaders, it's important to note that at the grass/netroots level there is a powerful opposition movement that is growing every month.  Without this in mind, it would be easy to fall into a serious depression about where this country is headed.  The new progressives leading this movement don't simply act as opposition they are also developing innovative ideas on how to get off the destructive path the modern GOP has put us on.

There are several events coming up that address these issues and compliment each other nicely, particularly in the order they are scheduled:  Kevin Phillips will be speaking at Powells this Friday the 7th at 7pm, and on Monday the founders of the progressive uber-blogs Daily Kos and MyDD will be promoting their book Crashing the Gate at Lucky Lab Brew Pub from 3:30 to 7pm.  They'll head over to Powell's for a book signing event at 7:30 and then top it off with an appearance at Rob Brading's (progressive Dem challenger to Oregon House Speaker Karen Minnis) campaign event at the McMenamin's Kennedy School.  You can be Kos Heads and follow them around to each event or just show up at one, preferably the Brading event where your support will be the most effective.

So at Phillips' event we can learn about the destructive GOP alliances and what they are doing to America, and at the Crashing the Gate events we can learn about what to do to put a stop to this craziness.

Giving Dagoba Chocolate a chance

Dagoba chocolate lovers like myself were certainly surprised to learn about their product recall the other day due to unacceptable levels of lead in some of their chocolates.  That's a tough bitter pill to swallow if you've checked the recalled lot numbers and matched one of them up with a bar you've been munching on this past week... even worse if one of your kids has been eating it too. 

Not good at all, and as consumers we could talk about this all day which some are doing over at Jack Bog's Blog, but I'm going to try to put the perspective of the manufacturer (or vendor as it is better known in the industry) into this unfortunate story because as a fellow vendor in the natural foods bidness I can sympathize to some degree with what the owners of Dagoba are going through.

First off, I have yet to meet an Oregon natural foods company who's owners don't have their hearts and souls invested in their companies.  We care deeply about the quality of our products and the customers who buy them.  As I've noted in a previous post, gourmet and natural food companies in Oregon have an outstanding reputation in the industry.  So when something goes wrong not only do we feel terrible, but we do everything possible to correct it. 

When I first started my bidness, I also had to do a product recall.  All I could think about was the customers who had purchased my bad product.  I received plenty of e-mails and calls from shocked consumers who had opened a jar of one my curry sauces only to find it had turned into a lava flow right there on their kitchen counter top.  The problem, of course, was quickly corrected through a change in contractors, but I had some unhappy consumers that I needed to communicate with along with making sure the stores that carried my products had them off of the shelves until we got the new stuff on. 

It's about communication, finding out how the problem happened in the first place, correcting it, working with unhappy consumers who are the victims of your bad product and keeping your lines open to everyone involved.  Odwalla and its e-coli disaster is a great case study on positive recovery.  As far as I can tell, Dagoba is doing what it needs to do to make things right.  They work with some of the same distributors I work with, and things are going as good as they can in a situation like this.

Will I continue to buy Dagoba?  Of course.  They've tested all of their products and many of them are not on the recall list and are perfectly safe and delicious to eat.  They've assured us of this.  Some of you may think I'm just a blind supporter, but because I know the ethics and mindset of the owners of Oregon natural food companies, I trust that what they're telling us is the whole truth and nothing but the truth.  So, don't give up on Dagoba, folks.  Let's give them a chance to make things right.