Law of untended outcomes strikes again!
I think we are all aware that the Taxpayers League of Minnesota is one of the most despised organizations in this State, especially by progressive tax advocates. I find this interesting in that I know the story of how it came in to existence.
About 20 years ago I approved some financing for a leveraged buyout of a local business for a man named Mike Wigley. He came up with about $130,000 through credit cards and stretching every nickel he had to make it work. We provided a loan for $7,000,000 to complete the purchase, which he personally guaranteed. If he would have failed, he would have been in personal and corporate bankruptcy immediately. But, he didn’t, and was very successful with it and made a lot of money when he sold the business.
Upon closing his deal he made the trip to his accountant to do his taxes. He was astounded by the amount he owed the governments for income tax! He had taken the risk, employed many people, and been successful through hard work and implementing his plan to own and turn around the business he had purchased. Now the governments wanted what seemed more like a “success fee” than tax.
Later in the day he had coffee with a gentleman that was considering starting a tax payer’s advocacy group. Mike was immediately interested and offered to do the first funding for it. He never had to fund it all because when others heard about it there was money coming in from everywhere to support what became the Taxpayers League of Minnesota!
Today this organization is one of the most powerful in the State, although despised by the “higher tax” people. The candidates that have signed the “no new taxes pledge” have all been criticized by their opponents. Some think this organization has far more power than it should, and maybe it has. This is an appropriate question no matter what your political persuasion is.
Is it a good idea to have an organization like this to keep government accountable? Or, has the government really been “sold” to high wealth people via their higher taxes thereby prompting them to get more involved and try to run it? Do wealthy people just like to “pull the strings” regardless of their political views? Is there a better system that would give us all the feeling of equal ownership of our government? Do the tax laws discourage small businesses in this State? I’d be curious to hear from people that I know about this with your comments on this blog.
Oh, and as an irony, Mike is a very generous person giving to schools, colleges (some very liberal ones at that), arts organizations and many other things in our community. He is a proponent of fiscal responsibility, but puts his wealth to work where he sees it is needed!
Rob,
Thanks for the Wigley history lesson-a good man!
Rob– What can I say? You asked alot of good questions! Mike
I feel Mike’s pain, being a business owner take a lot of personal accountability and demands. Debt has to be repaid, taxes have to paid on payroll whether you are profitable or not. Equipment has to be paid for in cash yet you can’t deduct the depreciation for years.
If you survive all theses hurdles Minnesota wants more than 8% of the sales price and the feds 15%. If after all these are paid you estate at your passing will be taxed at 55%. It makes being a small business man tough. We pay for a lot of excess padding on both the state and federal level.