guest commentary by David Potts
Potts is a certified public accountant with more than 25 years experience (Although every effort is made to provide you accurate and timely tax information, it is general in nature and not specific to your facts and circumstances. Consult a qualified tax professional to discuss your particular case.)
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I’m confused. Isn’t the economy supposed to be hurting, limping along without much hope for the future?
That seems to be the theme of conversation with many the people with whom I come into contact. Yet I just finished a telephone conversation with a client that owes additional income tax for 2011 because he had one of his best years ever and expects his profitability to be even better in 2012. I had two appointments with business owners today and both had very profitable years in 2011, better than the previous years. I reviewed several business tax returns today and they were all very profitable.
In my tax practice, it appears that most businesses are profitable and healthy. The only exceptions are businesses that are connected with real estate and construction and my real estate and construction clients aren’t starving. For these clients it’s just not as easy as it was in the boom days.
People behave based on what they believe, and what we believe is influenced by what we hear and with whom we associate. Science shows us that what we believe and how we make decisions is based primarily on emotion, not logic. I’m no exception. But is the world really coming to an end because of a less than inspiring Congress? Will the United States economy really collapse in the next few years under the weight of our budget deficit?
Granted, I’m no prophet. However, I’ve heard all this talk before — 30 years ago. Books with titles like The Coming Economic Crash were best sellers. Self-professed gurus were telling you why you are a fool not to buy gold. The world was supposed to end and the rivers were supposed to turn to blood.
In 1986 the Internal Revenue Code was revised to deny tax deductions and benefits to special interest groups. But Congress sold those benefits back to the special interest groups and now Congress needs to take them back again so they will have something to sell in the future. During these 30 years our country moved from extreme budget deficits, to prosperity, back to extreme budget deficits.
And the world is supposed to end, again, on Dec. 21, 2012 according to the Mayan calendar.
My point? How many of you might be sacrificing a prosperous future because of your pagan beliefs?
There is always an excuse not to start, or to grow, or to buy a business. Then, there is always an excuse not to lose weight too. You can find an excuse for anything.
Reconsider your beliefs. If you have entrepreneurial dreams, now might be as good a time as any to start, grow or buy a business. It might even be a better time because competition might not be as intense.
Our economy is going through a structural change. Mexico and China will continue to compete for our manufacturing jobs for decades. Don’t expect large manufacturing plants employing thousands of workers to return to Fort Smith. Unemployment will remain high as long as the government is willing to pay people not to work.
If the Greater Fort Smith Region hopes to prosper in the future, it will take brave people with an entrepreneurial spirit to invest in small business opportunities and to grow their businesses large enough to employ others.
Besides, home grown is always better.