EDITORIAL - WHAT WOULD IT BE LIKE IF THE GOVERNMENT RAN EVERYTHING?

Recently I was in Philadelphia speaking at the Raylon Art of Business Conference. Philadelphia is a great and historic city. I have always wanted to walk where Ben Franklin and the framers of our Constitution walked. I was touched by my visit to Independence hall where the Declaration of Independence and the Constitution were signed. I was not disappointed with my historic tour of Philadelphia.

I did have a problem though; it was ‘off season’ so everything closed exactly at 5:00 p.m. Independence Hall, the Liberty Bell exhibit; Franklin’s court; the grave yards; Betsy Ross’s house; all of the historic locations. I was not the only tourist that was disappointed by this. I talked to at least 20 to 30 visitors that, like me, were left disappointed standing at the door.

As I thought about the ‘business practice’ of closing early, I could only think about my my talk to small business owners at the conference where I had pointed out that many of our clients are expanding hours in reaction to the economy.

Then it hit me- all of these great historical exhibits were managed by the US Park Service – a branch of the Federal Government. The workers, managers, and those making the decisions were all government workers... bureaucrats. Realizing that the government was running the show it made sense that they didn’t care, they just followed the bureaucratic rules.

Then it really hit me! “Would I want the Federal Government running my health care and the banks?” That seems to be the way we are going.

Scary- really scary… I hope that if they do take over our financial institutions and our health care system that they do a better job taking care of their customers.


Larry Kopsa CPA

A MESSAGE FROM ABRAHAM LINCOLN

"You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down. You cannot further the brotherhood of man by inciting class hatred. You cannot build character and courage by taking away people's initiative and independence. You cannot help people permanently by doing for them, what they could and should do for themselves."

—Abraham Lincoln

FYI - HOW IMPORTANT IS THE INTERNET

The Internet is very important to our accounting business. We do so much with the Internet, from on-line meetings to filing forms to tax research. In addition in our meetings with distance clients the we use the Internet. It is just like we are at the clients location. We would really be lost if we did not have cyber space technology.

But that is nothing compared to the Germans. A new study found that 84% of Germans in their 20’s would do without their significant other before they gave up the Internet. They explain that they could always find another partner to love, but life without the Internet was unthinkable. WOW!


Larry Kopsa CPA

SBA OFFERS ONLINE RESOURCES ON SURVIVING IN A DOWN ECONOMY

If you are interested, the Small Business Administration is offering free online training and other resources to help small businesses during these challenging economic times.


Available Free Courses:

1. Strategic Marketing: How toWin Customers in a Slowing Economy

2. Down-Shifting in a Slowing Economy:Business Planning Guide

3. How to Prepare a Loan Package


Larry Kopsa CPA

COMMENTARY FROM EDITORS ON PRESIDENT OBAMA'S PLAN TO HELP SMALL BUSINESS

On Monday, March 16, 2009, President Obama announced a new plan to help small businesses.

The plan is mainly centered around easing SBA loans. The plan calls for the government to buy up SBA loan securities to free up the secondary markets so banks can sell their SBA loans; it cuts SBA loan fees; and it increases the Federal guarantee on SBA loans to 90%. It also calls for the 21 largest banks getting Federal funding to report on their volume of small business loans each month. The rest of the announced provisions for the most part were already included in the Stimulus package and not new.

So: thumbs up or thumbs down?
I’d say the plan is mildly positive, but mostly it’s just not relevant to the majority of small businesses. Here’s why:

To the extent small businesses actually want SBA loans, this could help. However, not every small business wants or needs a loan. Demand for small business loans is down significantly, according to the U.S. Treasury. As Dawn Rivers Baker noted, lack of loans is not what ails many small businesses. In times when the economy is down, going into debt doesn’t necessarily look all that attractive. Battening down the hatches to get through to better times in the economy, does.

The Small Business and Entrepreneurship Council makes a similar point — saying the President’s focus on SBA lending merely helps on the margins: “While these may help some small businesses that are in a position to borrow money, many small firms are not in sound financial shape or don’t feel it is prudent to increase their debt during the rough economic period.”

Consider, also, how few small businesses actually get SBA loans. For instance, as this Washington Post article reports, SBA loans counted for just 4% of loan volume for small businesses in 2006.

More SBA loans are not a cure-all for every small business — although you would hardly know that based on some reports. For instance, this article on Forbes.com is bizarrely titled “Small Business Loves Obama’s Plan.” However, there are no small business owners interviewed in the article. The title makes it sound as if small business owners spontaneously erupted in applause in favor of the plan. Wishful thinking perhaps … but not what the article says … nor the real-world reaction.

HAPPY SAINT PATRICKS DAY

It's no use boiling your cabbage twice.


--Irish proverb

COMMON QUESTIONS ON THE STIMULUS TAX PROVISIONS

If you don't already have the tax provisions of the Stimulus Bill figured out, the American Institute of Public Accountants has prepared a Q&A on individual and business tax-related provisions in the American Recovery and Reinvestment Act of 2009. This is only a couple pages and answers many questions that we have been receiving. Among the subjects covered for individuals are the first-time home-buyer credit, college-funding tax credit, unemployment benefits, benefit for use of public transit and the alternative minimum tax exemption. For businesses, the Q&A highlights depreciation, expensing, capital gains, work opportunity credit and penalty relief from underestimating taxes.