Rep. John Fleming (R-LA) appeared on MSNBC with Chris Jansing this morning to attack President Obama’s new deficit reduction plan, which includes some tax increases on the wealthy. Taking up the typical GOP talking point, Fleming said raising taxes on wealthy “job creators” is a terrible idea that kills jobs because many of these people are small business owners who pay taxes through personal income rates...Via Reddit, where the economics are parsed, and it is noted that he is the owner of 33 Subway shops.
Fleming responded by saying that while his businesses made $6.3 million last year, after you “pay 500 employees, you pay rent, you pay equipment, and food,” his profits “a mere fraction of that” — “by the time I feed my family, I have maybe $400,000 left over.” ..
And how hard does the congressman work to make the equivalent of eight median household incomes? Fleming told the Wall Street Journal that “he spends very little time on day-to-day management, though he weighs in on broad strategy decisions.” “I monitor the reports. I’m certainly in communication with the managers,” he told the paper.
20 September 2011
Another rich congressman complains about proposed tax hikes
From Think Progress, which has a video of the interview:
Wow. Just barely scraping by.
ReplyDeleteTalk about an out-of-touch elitist.
So let me get this straight...he monitors his personal business while on the clock for his constituents? And he makes maybe 400K on top of what we, the taxpayers, pay him??? And he gets all the benefits of the other congressmen and women...darn it, I knew I was in the wrong business.
ReplyDelete*sigh*
ReplyDeleteYeah, and I bet if his income tax went up 5% he'd probably fire everyone and refuse to do business. Idiotic.
at least he can eat cake.
ReplyDeleteMuch as I dislike politicians of any stripe and find them all to be criminals, "how hard does x work to make y" assumes the labor theory of value; that ridiculous understanding of price that has weaseled its way into the minds to otherwise bright people. It's not labor, but demand, that determines price.
ReplyDeleteHe created $6.3 million in wealth but only got to keep 6% of it. I'd complain too.
If a state teacher only got to keep 6% of his pay he'd flip out, though a Korowai tribesman might laugh at the teacher's excessive wealth and ridicule him for complaining.
Being robbed is always unpleasant; there is no point at which it becomes okay.
"He created $6.3 million in wealth but only got to keep 6% of it. I'd complain too."
ReplyDeleteDo the math.
The man has 500 employees. If he pays them each $12,000, not to mention benefits, he would be broke and they would still live in poverty.
There was more to that sentence than is being quoted: "...$400,000 left over to invest in new locations, upgrade my locations, buy more equipment."
ReplyDeleteIOW, according to him, he's not spending that money on fancy vacations or custom-made suits or fast cars or other luxury items; rather, that's what he has left over after regular expenses and his family's upkeep to plow back into his business--and, presumably, create more jobs.
Believe me, I'm not into defending rich people who object to paying more taxes, but in this case I think leaving out the part of what he said after "left over" gives a false impression.
--Swift Loris
Yeah, I would elicit caution at looking at raw/gross numbers. What seem like exorbitant amounts to a laymen is different from a businessman perspective.
ReplyDeleteI am acutely aware of this as I just switched from working for someone to working for myself. Now being on the gross income side of things, I see amounts coming in sometimes 8x what I made before. But then in the next moment realize, wow... that's not enough.
Of course, this discussion is going off his thumbnail sketch of his finances. "Feeding" his family differs greatly from my idea of "feeding" the family, I am sure. But $400,000 spread over 33 stores is about $12k a store. That won't buy you much equipment.
So not to take sides at all, but it's very easy to be put off by what seems to be large numbers. He obviously is not going to be in the poorhouse anytime soon. But the numbers he quotes are not all that outrageous considering.
"He created $6.3 million in wealth but only got to keep 6% of it. I'd complain too"
ReplyDeleteNo, he didn't "create $6.3 million in wealth". He moved that much money around in the economy by satisfying pre-existing demand, and siphoned off $600k for himself in the process - 10% profit.
If he closed his 30 Subway shops tomorrow, the demand for crappy sandwiches would still be there. He didn't create the demand. He only filled it. Quiznos or maybe a local company would step up and fill the void that he created by exiting a profitable situation.
He is also the perfect specimen of an incredible whiner. He spent $200k on his own family, yet he is crying poverty. Tell that to the employees that he's paying an annual salary of $10k per year to.
P.S. His numbers don't even seem vaguely right. What does $6.3 million represent? Gross sales? If he has 30 stores, open 365 days a year, that comes to just $575 per day in sales. Given an average meal cost of $8, he's serving 71 customers per day per store, or maybe 20 sandwiches during the busy hours. He needs 17 employees per store to make that few sandwiches?
ReplyDeleteI suspect that either then $6.1 million represents his profits, or he's lying about his "take home".
Only $400,000? The poor thing.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteHe created $6.3 million in wealth but only got to keep 6% of it. I'd complain too.
ReplyDelete032125,
How do you:
A) figure that he created that much "wealth"
B) How do you figure that 94% of it is being taken away?
The comparison between a teacher is ridiculous, a teacher obviously makes several times less than this guy.
Just watched the video. He says he takes home about $600,000. Then has $400,000 left over to re-invest.
ReplyDeleteSo it takes him about $200,000 to feed his family. He doesn't happen to be Mormon or Muslim, does he. Multiple wives can lead to big families...
I put a link in a previous post attempt that didn't appear to go through, so I'll keep this short and sweet. Two ways to look at this, and neither of then are close to 032125's:
ReplyDelete1) He realized $400K on $6.3M. Look at the fortune 500 list that lists revenue and profit, and he's not doing as well as walmart, when judging by revenue/profit ratio. But he doesn't have walmart's economy of scale, and a lot of his profit is eaten up by franchise fees.
2)A rough guess for the capital required to open a subway is about $200K. Times 33 is $6.6M. So he's realizing a return of over 6%, which isn't bad.
That's enough money to support 16 of me, each in different apartments.
ReplyDeleteI'll stand by my original statement. The entrepreneur sees a need; he takes on risk and works his ass off to bring together the resources and talent to see that need fulfilled.
ReplyDeleteOf course he didn't do all of the work, if he is like every other entrepreneur I've ever met, no doubt he worked hours that would drive most of us to quit.
Entrepreneurs and business owners create jobs, they take initiative that others won't, and they create wealth at great risk. He created those jobs that led to that wealth.
I have not one ounce of entrepreneurial spirit, and am just as happy to work for those that do. This describes most of us who are just as happy to "get a job" instead of "creating jobs".
Okay, so this is a month later. But anyway. Regarding the anonymous post dated September 23, 2011 1:17 AM:
ReplyDeleteFirst, the $200,000 to feed his family probably includes more than food: housing, transportation and all the money it takes to maintain and fuel cars, medical expenses, schooling, family vacation, college funds for his kids, saving for retirement (or it would if he didn't have the perks of being in Congress), saving for a rainy day, charitable donations, clothing, utilities, and whatever else it takes to maintain a household.
Second, Mormons haven't practiced polygamy in over a century. Anyone that does and says they are is from an offshoot sect. Muslims in the U.S. probably don't practice it, either. Polygamy is illegal in every state of the U.S.
Also, I would like to point out that entrepreneurship is how every business starts - including those that pay most of our salaries. And entrepreneurs, CEOs, and other such people work their tails off to get where they are so those salaries can be paid. And it is a rare day indeed when they are not on call for whatever business problem creeps up.