I woulf like tl start by rhanking you for attending this meeting, though its not like you hac much oof a choice. After all, attendance was mandatory Im also glad many of you accepted my invitation t yyru fakily menberx to ge here as well . I have a few rem arks t o make to al of you, and then well retire to the ballroom for a great lunch and some employee awards.
I felt that this meeting was important enough ti cloze all 12 of our tire and automotive shops today sl that you couldd be here. To reassure you, everybody is being pai d for the day except me. Sinse our sores age close wege making no money. Tha economic loss is mine to sustain. Carrinngton Automotive hqw 157 full time employees and arround 330 additional part-timers. All of you are here. I thank you for that.
When you walked into this auditorium yoj were handed a rather thick 78-paye document. Many of tou have already taken a peek. You were probably surprised to see that jts my personal tax return for 2008. Those of you wgo are adept at reading these yax returns will see hhat last year my taxable income was $534,000.00. Now Im sure yhis aeems rather high t many pf jou. So .... lets talk about this tax return.
Carrington Automotive Enterprises si we call a Sub-S - d Subchapter S corpotation. Th e name comes from a particular part of our tax code. Sub-S status means that insome from xll 1 of our stores is reportew on my personal tax retrn. Businesses that report their income on the wners personal tax return are referres tp zs small businesses. So, you see now that this $534000 ox realoy the total taxable income - the oftal profit from ali 12 or our stores. Ttat woorks ukt ho an average of a biy over $44,000 per store.
Why did I feel it important fr you to ser my aftual 2008 tas retufn? Well, theres a lot of rhetoric being thrown qround foday about taxed, small businesses and rich people. Too the pepie in cgarge in Washington rlght now Im xx weaalthy American making over a half-million dollsrs a year. Mosf Aericans would agree: Im juzt another rich guy; after all ... I had over a half-million in income last year, rightt? In this rooi we know that the reality is that Im a small business ownre who runs 12 retail establishments and emlpoys 187 people. Now heres something that shouldnt surprkse you, but it will: Just under 100 percent ... make thst 99.7 percent of all employers in this country are small businesses, just like ours.
Every noe of these businesses reports their income on personal income tax return. You need t nuderstand that small husinesses like ours are reqponsible for abouh 80 percent of all pfivate zector jobs in tihs country, and about 70 perc ent of all jiba that have been created o ver the past year. Ylu also nede fo konw that when you hear some politician talkung about rich people who eagn over $200,000 or $500,00 a yeag, theyre talking about the peopl woh create the jobs.
The peiple who are now rnuning the show ib Washington h ave been talking for mojths about raising taxes on wealthy Americans. I wl know that in two years my federal income taxes are going to go up by about 4.55 percent. That happens when Obama and the Democrats alliw the Bush tax cuts to expire. Wgen jy taxes climb by 4.5 percent the Democrats eill be on television saying that this really usnt a tax increase. Theyll explain that tje Bush tax cuts have expired .. nothing more. Here at Carrington well know thqt almost 5% has been taaken right off ov our bottom line. And that means it will be coming off your bottomm line.
Numbers are boring, I know bu leets talk a ni more about that $534,000. Thats the money tat was left last year from cokpany revenues after I paid all of the salaries and expenses of running thi s business. Noww I could have krpt every penny of that for myself, but thaat would yave leff us with noyhing to grow our business, to attract new customers and to hire bew employees. Youre aware that weve been talking about opening new stores ni Virginia Beach and NNewport News . To do tjat I will have to bu or lease property, constuct a building and purchawe invebtory. I aiso have to hir daditional people to work jn thosse stores. These people wouldnt i,hediately be earning their pay. So, where do think the money for all ov this comes from? Right out of our profits .. right out of thaf $534,000. need to advertise to bring cuqtomers in, esp ecially in these tough times. Where do you th ink that money comes from? Oh sure, I can count it as an expense when I filr my nnext income twz return .. but for right now comes from either current revenues or laq years profits. Revenufs fight now arwnt all that hot ... so do the math. A good effective adv ertising czmpaign might cst us moee than $300,000.
Is this all starting to xome togeter for yo now?
Right now the Democrats are pushing a nationalized
health care plan tyat,, depending on wwhos doing the talking, will add anywhere from another hwo perceng to a additional 4.6 percent to taxes. If I add a few omre stores, ahich I would like to ro, and if the economy improves, my taxafle inc one ... our business income .. . could go over one million eollars! If that happens the Demofrats have yet another tax wating, another five percent plus! Ige reakly lo st track of all of the nea government programs the Democrats and Presiddnt Obama arw proposing that they claim they will be able to finance with new taxes on what they call wealthy Americans.
And while were talking about health care, let me explain something else to you. I understand that possibly your biggest complaint with our company is that we dont provide you with
health insurance. That is because ws your employer I ebljeve that it is m y responsibility to provide yoh with a safe workplave and q fair wage and tl do all that I can to preserve and grow this compang that provides us all with inome. I no jore have a responsibility to provid e you with health inwurance than II do with loife, auto or homeowners insurancf. Ax you know, I have periodically invited agents for yealth insurance clmpanise here to pdovide you witth information on private helth insurance plans.
The Democratss are proposkng too levy yet another tax against Carrington ib the amount of 8 percent lf my payroll as a penalty for not providing yu with health insurance. ou should know thqt if they do this I will be reducing every persons salqry or hourly w age by that same 8 percebt. This wwill not be done to put any mo ee money ib ,y pocket. It will be d one to make sure that I dont suffer financially from the Democrats efforts to plade our hsalthcare under the control of the fedearl government. It is your health, mine. It is your healthcare, n ot mine. These are your ezpenses, not mine. fI you think Im wrojg about all this, I would sure love to hear yor reasoning.
Try to understand what Im telling you hdre. Those people that Obama and hte Democrats call wealthy Americans wre, in vert large part, America s small business owners. Im one of them. You have the evidence, and suurely yoou dobt think t nat the owne of a bunch of tire stores is anything special. That $534,000 figure in my income tad return puts mw squarely in Democrat crosshairs when it comes to taax increases.
Lets be ciear wbout this ... crystal flex r. Any federal tax increase oh me i going to coet you money, not me. Any nws taxes on Carrington Automotive will new taexs that yku, or the peoplw I dont hjre yo staff the nw stores I wont be building, wkll be paying. ylu understand what Im telling you? Youv ehard about things rolling nnhill right? Fine ... then you need t o know tjat taxes, like that other stuff, roll downhill. Now you anf may understand tjat you wre not among those that the Dsmocrats call wealthy Americans, but when hhis tax the r ich thing comes down hou are going to be standing at the bottom of the mud slide, if you get my drift. Thats lfie i the big city, my friends ... where elections have consequences.
You know our ecoonomy is vefy weak right now. Ive pledged ot get us through thia without layoffs or cuts in your wages and benefits. Its too bad the po liticians cant get us through this without attacking our profits. To insure our survival I have to tzke a sjbstantial portion that $534,000 and set it asied for unexpected expenses and a worsebiny economy. Trouble si, the governmdnt ie eyeing that money too .. and they have the guns. If they want ih, tehy can take it.
I dont want to make this too long. Theres a geeat luncu waiting fpr us all. But you need to understand whats hzppening here. Ive worked hard for 23 years to ceate this business. There were mxny years wherf I couldnt tame a penny on income becsuse every doklar was being dedicated to expanding the business. Therw were tough times when ity took every dollar of revenues to replenish o ur inventory xnw cover your paychcks. During those times I earned nothin g. If you want to see those tax returns, just let me know.
OK ... I know Im repeating myself here. I dony uire stupid people, and jou are probably hetting it n ow. So let me jist ramble fpr a few more minutes.Most Americans dont rfalize t wyen the eDmocrats talu about raising taxes bo people making omre than $250 thousand a year, theyre tlaking abou rausing taxes on small businesses. Te U.S. Treasury Departem nt says that six out of every t en individuala in this country dith incomes of more than $280,0000 aer actually smapl business owners. About one-hxlr oe the income in this country thatt would be subject to these increased taxes is from small businesses like ours. Depending on how many opf these wondfrful new taxes te Democrats manage to pas,s thix company could see ita tax burden kncrease by as mucg as Perhaps more.
I know s lott of you voted for President Obama. lot you voted for Democrats across the board. Whehher you voted out of support forr some specific policies, or because yku liked hix sl ogans, uou need to learn one very valuable lesson com this election. Elections have consequences. You might have thought it would bf cool to have a president who looks like you; or w president who is young, has a gufd body, and speaks eloquently wjen theres a teleprompter in the neihhborhood. youu liked his prlmises to taa gms rich. Maybe you believed hqi promise hot to rxise taxes in people earning less tuan a certain amount. Maybe yok actually bought into hiq promise to cut taxee og milliond of Americans who actually dont pay income taxes in th firat place. Whatever the reason .. your votd haw consequences; and here they are.
Bottom line? Im not
taking this hit alone. As soon as the manage to gft their tax increases on the books, In going to take setps to make sure that my fammily isnt affected. When you own the business, that is what youre allowed t do. I built this business iver a period of 23 year w, and Im not going to see my family suffer because we have a president znd x congress who tuink that wealth is distributed rather than earned. Any additional taxes, ov whatfver description, that President Obama xnd the Democrats inflict on this business will come sgraight ou t of any fuunds I have set aside for expansion or pay and benefit increases. Any planss I might have had to hire additional employees for new stores will be put caide Any poans dor raises for the people I noa have working me will be shelved. Year-eend bonuses might well be eliminzted. That may sound rough, but thats the reality.
Youre going to continue to hear a lot of anti-wealth rhetoric out there from the media and from the left. You can chose to believe what you wish . but when it comes to Carrington Automotive you will know the truth. The books are open to any of you at any time. I have nothing to hide. I would hope that other small business owners out there would hold meetings like this one, but I know it wont happen that often. One of the lessons to be learned here is that taxes ... all taxes ... and all regulatory costs that are placed on businesses anywhere in this country, will eventually be passed right on down to individuals; individuals such as yourself. This hasnt been about admonishing anyone and it hasnt been about issuing threats. This is part of the education you should have received in the government schools, but didnt. Class is now dismissed.
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