Rubio and the Fool’s Gold Standard


WASHINGTON, DC - MAY 23:  Sen. Marco Rubio (R-...

While I generally like Marco Rubio he is dead wrong on immigration and now he is pushing another bad idea.

Not taxing Olympic athletes gold medals. Let’s follow the argument a little. They have worked really hard to compete in the Olympics? Yes. They are representing the BEST of the BEST in America? Well maybe. More likely they represent the best of the backed. If ever there were a class of achievers that fit hand-in-glove with Obama’s “you didn’t build that statement” it is Olympic athletes. The vast majority of competitors could not begin to train or compete without massive assistance from others. It begins with parents taking their children to practice and PAYING for practice. The kids with above average talent begin to separate from the other competitors. Depending upon the sport they are given TAXPAYER subsidized coaches and facilities and as their talent is further revealed the amenities also improve to facilitate training. Again, all at somebody else’s expense, be it a coerced into support TAXPAYER or be it philanthropist. They are often given allowances by parents or supporters or they get phony “jobs” where they can “earn” spending money. All of this so they can fulfill a four year old’s dream of gold.

Now let’s look at the real gold medal winners in society. The small business owner. They rarely have anybody to fall back on. They get up earlier than the next guy. They often work one job to support their family while sidelining in their small business until it becomes viable. Instead of being supported from outside they are carrying two loads. Instead of receiving TAXPAYER subsidies to facilitate their dreams they will be progressively taxed with an ever increasing burden as they begin to create a successful business. Make that three loads they must bear. If ever they manage to take their dream from concept to small business to large business they will be vilified by society and the political class. For all of their years of hard work they will be beaten down at every opportunity, taxed in a manner that makes government and the leeches of society the primary beneficiary of their diligence and hard work.

For the Olympic athlete, the supporters truly make the game possible. An Olympic athlete without somebody else’s money and facilities will go nowhere. (yes, there are some exceptions.) These supporters don’t condition their support on the delivery of any product or service. It is not an exchange of value for value. A coach may choose who he or she will train based on potential but not on an assurance of victory. The coaches are usually not paid by the athlete. A supporter or taxpayer foots that bill. Olympic committees chose who will be trained to represent a country on a hope of success. The supporters are an entirely critical component to victory. This is particularly true as competitors move up the path to participating in the Olympics.

No supporters, no athlete. If the athlete “leaves” the supporters pick a different athlete to back. Somebody else DID build that for them.

A small business has two types of supporters. Customers and employees. In the case of customers, they are not donating money to the small business. They do expect a fair exchange of value for value and if they don’t get it they go somewhere else. The small business person must develop a product or service that will entice people to make this exchange voluntarily. TAXPAYERS are not coerced into supporting small businesses. In most cases the small businesses are TAXPAYERS coerced into paying for freeloaders. Yes, as a small business owner, I can tell you employees are important in the operation of a small business. They range from the lazy to the top-notch and every small business owner wants to keep the top-notch. It is, however, very rare that any particular employee or group of employees are critical to the survival of a small business. If one or more leave, they are replaced and hopefully with as good or better. The business goes on. The employees are PAID to be there unlike Olympic supporters who are PAYING for a place at the table. The small business owner gets “paid” after everybody else gets paid, including the IRS. Employees, like customers, enter into an arrangement of value for value. They deliver a product or service to the business in exchange for pay in the same way the business delivers to its customers.

If the employee leaves he gets new employees. If the customers leave he refines his product or service to entice them back. Or he tries his luck in a different line. And he works that second job again.

If the small business Owner leaves, there is no business.

Small businesses create the vast majority of new jobs in America. They are the prime movers of innovation in products and services. The regular introduction of small business products and services provide a constant downward pressure on prices for goods and services. Small business is the essence of American liberty. It is people dreaming big things and doing big things without handouts from others or forced handouts from taxpayers.

An Olympic athlete spends typically 12 to 20 years preparing for a one-off or perhaps two-off chance for gold. If they are successful they will have substantial payouts in the form of professional careers and endorsement contracts. The entire economic output of an individual Olympian is gone after their BIG DAY with a few exceptions. It is a shiny bauble, Fool’s Gold.

Small business owners often labor for three, four or five decades before they get a chance for real success. When that success comes, the scum in DC and the leeches around the country will be waiting to suck the life out of them. A successful small business will generate economic output and pay dividends for generations.

Why is Marco trying to give one more handout to the group created almost entirely by handouts?

Where is Rubio’s bill to eliminate, or even greatly reduce, income tax on small business?

He might at least start the conversation.

Fool’s Gold: Pyrite, Oregon State University image.

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August 2, 2012 4:20 pm

Rubio is attempting to treat the perceived symptom or issue, and not trying to address the disease or underlying problem. Lower taxes in general, and not taxing every economic activity under the sun would address this, not another(!) new law for a special case and limited constituency. This is typical of a lot of politicians, in that they do not think past the immediate issue and examine the root cause of the problem.  If we could just get someone to look beyond getting elected and actually address the problems that face out country, one by one, we would eventually see… Read more »

August 2, 2012 4:31 pm

Rogue, this should be sent to every GOP campaign in America, as well as all the small business magazines out there. (I’d add to the title  “The Real Gold Standard, Small Business”). Written with authority, every one will know you know of what you speak. You are one of them. I’m going to find as many small business blogs as I can find and link it. TThis is not a job for Twitter alone. (I suggest others of you do the same. One big hit can have this in 1000’s of offices in a couple oif days.)

August 2, 2012 4:41 pm

Any corporate income tax, whether on large or small businesses, increases unemployment directly. All Rubio would have to say is that every dollar of corporate tax assessed (including S Corp taxes) produces 70 cents of unemployment. Since corporate tax is far less than a trillion dollars it does not bring very much money into the coffers of the USGOV anyway, so we’d be better off getting rid of it entirely and letting the economy explode with productivity and employment.

August 2, 2012 5:53 pm

You know I have to say I agreed w/Rubio but then I am down for ANY tax cuts, period.  I am sick to death of taxes, taxes, taxes for people like Obama and his minions and liberal Republicans to spend, spend and spend some more like crack addicts on their friends for power, power and more power!

August 2, 2012 9:36 pm

VB I know candidate who already has a copy. :}
Jaded, I too generally like any tax cut. My only reservation being that tax cuts should go to tax payers.
Thanks for all the comments.

August 2, 2012 10:58 pm

Every small business has a partner whether they want one or not.  The IRS makes out better on most small businesses than the owners.  They stole 45% of a 15 year old business I sold to a large public company in 1996.  When that wasn’t enough they decided on a full blown audit that lasted a full 30 days.

August 3, 2012 1:52 am

By itself, taxing or not taxing Olympic medals is a small matter – but it’s a great example of a breakdown in our political process – the growing reliance on ad hoc  legislation. In other words, the passing “feel-good” laws in response to the momentary tide in public opinion/visibility to curry favor/brownie points from the populace – in the place of thoughtful and coherent examination of the whole tax structure. Unfortunately, Rubio has on several occasions now shown a susceptibility to pander to the passions of the crowd rather than exercise his deliberative responsibilities as Senator, and this is a… Read more »

August 3, 2012 4:34 pm

Yes, the US business/tax climate is so oppressive, it must be why Bill Gates is in the poorhouse. It’s not small businesses that matter, but new businesses, which by definition create new jobs. Real job creation, though, doesn’t kick in until those small businesses survive and grow into larger operations.  BTW, it’s the “scum” in DC that provides Small Business Administration (SBA) loans, a resource that most small businesses use.

Brian Hibbert
August 4, 2012 8:56 am

I’ll take a different tact. Yes, this tax break is minuscule and to some extent is pandering to public sympathy for the athletes.  BUT….. It’s also getting the public in the mindset that if a person EARNED something they aught to be able to keep it without the government confiscating large portions in taxes.   I know there are better places to worry about cutting taxes (small business and corporate taxes would be a good start) but if we can get an overwhelming majority of people to back a “They deserve to keep what they earned” proposal, they may understand that argument… Read more »

August 4, 2012 8:13 pm

The points on the small businesses are very well taken.  On the issue of the athletes getting taxed, I don’t know the details, but I read somewhere that they now actually get cash awards for their medal finishes, or something.  There was a time when any Olympic athlete found to have received any compensation for sport, no matter how small, was denied participation or stripped of his medals.  It was always supposed to be an amateur thing, and for the glory of pure competition.  Now, not only are pros allowed to compete, they get monetary rewards for doing so? I… Read more »