This week on the BAD BAD CEO MAN

Published on October 10, 2012 By Draginol In Business

This week, the hard hitting reporters from Gawker bring you:

“The CEO Who Built Himself America’s Largest House Just Threatened to Fire His Employees if Obama’s Elected” [actual headline]

http://gawker.com/5950189/the-ceo-who-built-himself-americas-largest-house-just-threatened-to-fire-his-employees-if-obamas-elected

This bad BAD man also has a LARGE house. What a monster.

[editor’s note: Sure, we could have simply stated that this man sent an email to his employees explaining that if the company’s taxes go up that it will reduce working capital which could result in job cuts but we’re all about the page views]

UPDATE:

Now that everyone has finished writing their hate male to this guy we have the actual email. Unfortunately, it’s long and nuanced so we have taken the liberty of highlighting the parts that should make you very VERY mad.

“Huge mansion. Huge fortune. Profitable company. What could David Siegal have to complain about? Well, the demonization of the 1% by Barack Obama, for one thing. This truly amazing email went out to all Westgate employees yesterday. Bolding is ours.”

Subject: Message from David Siegel
Date:Mon, 08 Oct 2012 13:58:05 -0400 (EDT)
From: [David Siegel]
To: [All employees]

To All My Valued Employees,

As most of you know our company, Westgate Resorts, has continued to succeed in spite of a very dismal economy. There is no question that the economy has changed for the worse and we have not seen any improvement over the past four years. In spite of all of the challenges we have faced, the good news is this: The economy doesn't currently pose a threat to your job. What does threaten your job however, is another 4 years of the same Presidential administration. Of course, as your employer, I can't tell you whom to vote for, and I certainly wouldn't interfere with your right to vote for whomever you choose. In fact, I encourage you to vote for whomever you think will serve your interests the best.

However, let me share a few facts that might help you decide what is in your best interest.The current administration and members of the press have perpetuated an environment that casts employers against employees. They want you to believe that we live in a class system where the rich get richer, the poor get poorer. They label us the "1%" and imply that we are somehow immune to the challenges that face our country. This could not be further from the truth. Sure, you may have heard about the big home that I'm building. I'm sure many people think that I live a privileged life. However, what you don't see or hear is the true story behind any success that I have achieved.

I started this company over 42 years ago. At that time, I lived in a very modest home. I converted my garage into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you. We didn't eat in fancy restaurants or take expensive vacations because every dollar I made went back into this company. I drove an old used car, and often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business — hard work, discipline, and sacrifice. Meanwhile, many of my friends got regular jobs. They worked 40 hours a week and made a nice income, and they spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into this business —-with a vision that eventually, some day, I too, will be able to afford to buy whatever I wanted. Even to this day, every dime I earn goes back into this company. Over the past four years I have had to stop building my dream house, cut back on all of my expenses, and take my kids out of private schools simply to keep this company strong and to keep you employed.

Just think about this – most of you arrive at work in the morning and leave that afternoon and the rest of your time is yours to do as you please. But not me- there is no "off" button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have that freedom. I eat, live, and breathe this company every minute of the day, every day of the week. There is no rest. There is no weekend. There is no happy hour. I know many of you work hard and do a great job, but I'm the one who has to sign every check, pay every expense, and make sure that this company continues to succeed. Unfortunately, what most people see is the nice house and the lavish lifestyle. What the press certainly does not want you to see, is the true story of the hard work and sacrifices I've made.

Now, the economy is falling apart and people like me who made all the right decisions and invested in themselves are being forced to bail out all the people who didn't. The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed 42 years of my life for. Yes, business ownership has its benefits, but the price I've paid is steep and not without wounds. Unfortunately, the costs of running a business have gotten out of control, and let me tell you why: We are being taxed to death and the government thinks we don't pay enough. We pay state taxes, federal taxes, property taxes, sales and use taxes, payroll taxes, workers compensation taxes and unemployment taxes. I even have to hire an entire department to manage all these taxes. The question I have is this: Who is really stimulating the economy? Is it the Government that wants to take money from those who have earned it and give it to those who have not, or is it people like me who built a company out of his garage and directly employs over 7000 people and hosts over 3 million people per year with a great vacation?

Obviously, our present government believes that taking my money is the right economic stimulus for this country. The fact is, if I deducted 50% of your paycheck you'd quit and you wouldn't work here. I mean, why should you? Who wants to get rewarded only 50% of their hard work? Well, that's what happens to me.

Here is what most people don't understand and the press and our Government has chosen to ignore – to stimulate the economy you need to stimulate what runs the economy. Instead of raising my taxes and depositing that money into the Washington black-hole, let me spend it on growing the company, hire more employees, and generate substantial economic growth. My employees will enjoy the wealth of that tax cut in the form of promotions and better salaries. But that is not what our current Government wants you to believe. They want you to believe that it somehow makes sense to take more from those who create wealth and give it to those who do not, and somehow our economy will improve. They don't want you to know that the "1%", as they like to label us, pay more than 31% of all the taxes in this country. Thomas Jefferson, the author of our great Constitution, once said, "democracy" will cease to exist when you take away from those who are willing to work and give to those who would not."

Business is at the heart of America and always has been. To restart it, you must stimulate business, not kill it. However, the power brokers in Washington believe redistributing wealth is the essential driver of the American economic engine. Nothing could be further from the truth and this is the type of change they want.

So where am I going with all this? It's quite simple. If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company. Rather than grow this company I will be forced to cut back. This means fewer jobs, less benefits and certainly less opportunity for everyone.

So, when you make your decision to vote, ask yourself, which candidate understands the economics of business ownership and who doesn't? Whose policies will endanger your job? Answer those questions and you should know who might be the one capable of protecting and saving your job. While the media wants to tell you to believe the "1 percenters" are bad, I'm telling you they are not. They create most of the jobs. If you lose your job, it won't be at the hands of the "1%"; it will be at the hands of a political hurricane that swept through this country.

You see, I can no longer support a system that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, so will your opportunities. If that happens, you can find me in the Caribbean sitting on the beach, under a palm tree, retired, and with no employees to worry about.

Signed, your boss,

David Siegel

COMING UP NEXT on “THE BAD BAD CEO”

The BAD BAD CEO who went on a VACATION to a FOREIGN COUNTRY while raising insurance premiums on his employees.

Remember readers: Rich, Successful people are BAD people and we will continue to dig deep to show you just how terrible they are. How dare people start their own businesses and believe they have any rights to express their opinions. We will continue our hard-hitting reporting that we expect will damage those businesses through ill-informed boycotts by making sensational, irrelevant headlines.

Comments (Page 3)

seanw3

on Oct 10, 2012

That is kind of what I was thinking. The best solution would be to decrease taxes so that companies can expand, hire, increase GDP. Then raise them incrementally once profits on average are up until a balance is reached that can repay the deficit and keep things moving along. But can our government do that?

Frogboy

on Oct 10, 2012

taltamir

reply 31

Quoting Frogboy, reply 30To put it in video game terms, think of taxation as a royalty. If my game is doing gangbusters, then I don't care as much if the royalty percent for the other party is high because I have enough. On the other hand, if things are tighter, then an increase in royalties can be problematic. And that's the issue we face here.

Well...

1. Every business goes through ups and downs. If the taxes are raised then a businesses currently going through a rough time end up being pushed too far and fail. McDonnalds for example is doing great despite the depression. While a ton of small businesses have been forced to shut their doors.

2. Accounting legal requirements mean that businesses "income" does not properly represent their PROFIT. Taxes are not a percent of profit (if they were then what you said would be true)... Most critical of the issues is that employees have salaries and benefits which are not fully deductible as an operating expense. This is why businesses are forced to fire people when taxes go up. If all operating expenses were deductible then even a 99% tax on ACTUAL profit would not result in a single person being fired. (but it WOULD result in 0% GDP growth as people would simply not be building new businesses)

To each point:

1. Raising taxes will always result in marginal businesses to shed jobs. Raising taxes is always a trade off - the government needs the money for operations and it willing to constrict private enterprise to do it. When you have millions of people out of work, now is not the time to raise taxes on anyone.

2. As someone who writes 7 figure checks to the government, I feel qualified to state what profit is. Taxes are a % of profit as defined by taxable income. Just semantics and irrelevant.

The point is that for *most* businesses, expenses tend to be steady but revenue is not. A hotel or restaurant has a busy season. A game company has a major game release every other year. A company may launch a new product. As a result, that profit becomes the nest egg they live off of until the next big surge of revenue. But if the government takes more of that nest egg then they have to adapt - typically by cutting expenses and employees are one of those expenses.

LORD-ORION

on Oct 10, 2012

Hold on now... the entire quote, not just the 1st part I quoted

If any new taxes are levied on me, or my company

So, the actual 1st threat is, if I have to pay my personal fair share in order to dissipate the current outstanding fractional reserve currency (nevermind the fact that this shithead is in favor of voting for the corporate raider who will do worse things than bush ever did to the economy) I WILL RETALIATE BY

1) Taking out more capital from the company
2) Punishing the employees to prove my point (people lose jobs, and the remaining employees will be expected to pick up the slack for free)

Clearly another baboon, who doesn't give a damn about his country or the people that enable him to be rich, or understand that by dissipating the outstanding fractional reserve currency he will make his remaining money more valuable rather then less by printing more out of thin air to cover deficit spending...

Now let's move on to the second part

or my company

-ordered to pay a $900,000 fine for violating telecom rules
-lost a $5.4 million sexual harassment lawsuit
-was nearly bankrupted to satisfy his need to build a replica of the Versailles mansion (second biggest house in the US) because he took capital out of the company when he couldn't fund it himself. (and the subsequent lawsuit because of this)

THIS IS THE GUY YOU ARE GOING TO CHAMPION!?!?!?!

This is why Republicans are hopeless, now that the yearly deficit spending has stabilized (not actually fixed) and the free ride is over (that was done in order to maintain things, instead of sinking into an economic depression), it's time for austerity measures to fix the outstanding currency that has not been dissipated (you can thank Bush era Republicans for that).

It's not time to rock and roll again, it's time for the people who caused this melt down to pay up to fix the country.... middle class America has already been pilfered. There is no way the country could survive another 4 years of tax cuts and increased spending at the behest of the Republican liars...

Jafo

on Oct 10, 2012

taltamir

reply 30

McDonnalds for example is doing great despite the depression. While a ton of small businesses have been forced to shut their doors.

Obese trailer-trash will always have to eat, no matter what the economic climate.....

Internet journalism is an oxymoron akin to military intelligence...

Sarudak

on Oct 10, 2012

Frogboy

reply 33

2. As someone who writes 7 figure checks to the government, I feel qualified to state what profit is. Taxes are a % of profit as defined by taxable income. Just semantics and irrelevant.

The point is that for *most* businesses, expenses tend to be steady but revenue is not. A hotel or restaurant has a busy season. A game company has a major game release every other year. A company may launch a new product. As a result, that profit becomes the nest egg they live off of until the next big surge of revenue. But if the government takes more of that nest egg then they have to adapt - typically by cutting expenses and employees are one of those expenses.

Hm.... That's an interesting point. I wonder if it would alleviate this problem if losses in one year could be counted against profits in another. Or if you could opt for a longer tax cycle...

Alstein

on Oct 10, 2012

Frogboy

reply 30

Quoting seanw3, reply 27Hey Brad, one thing I have seriously been wondering is how about the competing lines of rhetoric about taxes strangling business growth and the wonder years of Clinton. What were your profits like in the years of the boom when taxes were much higher than they are now? Is it that we are in a systematic problem where revenue is down, so you now rely on less taxes to fund projects as opposed to the sales you had back then? Would and increase in sales from economic recovery allow for taxes to be raised to those previous levels? That seems logical, but I am curious how someone who actually deals with these issues sees things.

That's a complex question on many levels. First, I was in college for a decent chunk of that and then just a start-up after that.

The level of taxation on its own is irrelevant. It depends on how much money is coming in.

To put it in video game terms, think of taxation as a royalty. If my game is doing gangbusters, then I don't care as much if the royalty percent for the other party is high because I have enough. On the other hand, if things are tighter, then an increase in royalties can be problematic. And that's the issue we face here.

When the economy is tight, like it is now, putting more strain on businesses is not a good idea. If you want to raise taxes, for whatever reason, wait until the job market is much better and the economy is much better so that those companies that can't hack tightened profits don't put people out of work that can't find new easily.

The people complaining about tax hikes will be complaining no matter what- whether times are good or times are bad.

I don't think tax-gouging business for no good reason is a good idea. I do think we have a growing problem with income inequality in this country that is due to several factors (some of which are outside the control of government), and that we need to address this issue or face bigger problems later (see the Arab Spring for an example of this, those protests were economic, or think an Occupy group that is willing and happy to use terror tactics).

Other point-

This depends on what you do with the tax income. Sometimes tax income can result in greater economic benefit than what these marginal businesses provide.

Frogboy

on Oct 10, 2012

Sarudak

reply 36

Hm.... That's an interesting point. I wonder if it would alleviate this problem if losses in one year could be counted against profits in another. Or if you could opt for a longer tax cycle...

You can carry one year's loss into the next year. Which doesn't do you a lot of good unless you have the cash reserves on hand to cover it.

Over the years, I've had to borrow money in order to pay estimated taxes even though we hadn't actually received any money (accrual based accounting which we're forced to use). It can be highly stressful when you don't even know if you're really going to get paid.

Let me use a "hypothetical" example.

Let's say you made a game, I'll randomly call it Galactic Civilizations. And let's say you have it published by say a fictitious company called Strategy First. And the royalty reports show they owe say a million dollars. Even though you haven't received a cent in cash, you still have to claim it and pay estimated taxes on it.

Now, a year later, when you didn't get paid because they filed for bankruptcy, you can claim it as bed debt and get a deduction for the following year's tax return. But in the meantime, you've already given the government ~$350,000 in real cash (state + federal + local).

Increasing this amount to say $425,000 like the President would have us do doesn't make it easier to hire more people, no?

Frogboy

on Oct 10, 2012

Alstein

reply 37

The people complaining about tax hikes will be complaining no matter what- whether times are good or times are bad.

Naturally.

But this wasn't a complaint letter. This was someone telling his employees that things are extremely tight due to the current economy and that he can't tighten the company's belt any further without having to reduce costs -- namely employees.

Now, if times were good and this guy still had to lay off workers, then too bad for him. Those people will just find another job. But times aren't good.

How does raising taxes help income inequality?

This depends on what you do with the tax income. Sometimes tax income can result in greater economic benefit than what these marginal businesses provide.

How?

psychoak

on Oct 10, 2012

How?

Via magical utopian bullshit, as all redistribution schemes work.

I'm "poor" which is to say I'm just fine. I'm a slacker that's been a lazy sod and I've gotten exactly what I deserved in return, low income.

Since the Bush tax cuts, I've not paid a dime in income tax. These days I even get some of my social security withholdings back. Our tax code is a joke, liberal idiots giving away money to get elected by their dependency voting group do not make an economy run. All they do is bankrupt social security faster.

If we had a revenue problem to begin with, and we don't(the historical average is 18.1% and we're spending close to 25%), it would be because the bottom half of the bleeding country, myself included, aren't putting squat into the system. This has a lot to do with the income disparity too, the rest is the 15+% unemployment. Your labor is just like any other good or service. You get paid based on supply and demand, and those two factors are dependent on how much that money means to you versus the employer. If your taxes go up, you get paid more. If they go down, you get paid less. It's been shown in every tax change since they started keeping statistics.

The only way you make real wages go up is by making labor more scarce for the people trying to purchase it. You make it easier for those evil rich people to do business so you'll have more of them. The more of them there are, the less of you there are to go around. When things get really bad, they pay you a hell of a lot more than you're worth, like they were in the late 90's. Finding the burger flipper got as hard as it is to find a welder these days. Idiots in highschool were make 12 bucks an hour, idiots in highschool aren't worth minimum wage right now. You can make 40 grand a year, in this economy, with construction jobs in the toilet, as a passable welder. If the economy were booming like it did in the 90's, welders might be a six figure job today, there just aren't enough of them to go around. Scarcity is everything, the redistributionists utopia is just stupidity.

LORD-ORION

on Oct 11, 2012

Pssh...

Welfare for people is nothing compared to corporate welfare...

Social Security has collected far more in dedicated payroll taxes than it has paid out to recipients. In 2010 157 million people paid into the program and 54 million received benefits... so 2.9 workers per beneficiary. There is no problem with financial acumen there, except those caused by demographic trends.

The real problem is big business and top estates not paying their fair share... lobbyists get big corporate welfare breaks and the 1% keep threatening to ruin the economy. We MUST make them dissipate a proportional amount of fractional reserve currency to what they command and receive benefit from, now that the hole has been dug so deep...

eg: How about it if Mittens threatened to chop the agri-subsidies 1st in Republican states? $20 billion to farms vs PBS's 280 million that causes kids to be able to sight read words?
Oops, he'd lose 6-11 points overnight because of the rural vote...

It would probably save trillions of dollars in medicaid considering wheat and corn are causing the obesity epidemic... basically if someone couldn't buy a box of processed corn/wheat-shit cheaper than a basket of real vegetables, guess what someone would buy?

taltamir

on Oct 11, 2012

Frogboy

reply 37

Let me use a "hypothetical" example.

Let's say you made a game, I'll randomly call it Galactic Civilizations. And let's say you have it published by say a fictitious company called Strategy First. And the royalty reports show they owe say a million dollars. Even though you haven't received a cent in cash, you still have to claim it and pay estimated taxes on it.

Now, a year later, when you didn't get paid because they filed for bankruptcy, you can claim it as bed debt and get a deduction for the following year's tax return. But in the meantime, you've already given the government ~$350,000 in real cash (state + federal + local).

Increasing this amount to say $425,000 like the President would have us do doesn't make it easier to hire more people, no?

Nice use of the word "hypothetical" .

This basically is an example of what I meant earlier. A disconnect between actual money flow and government mandated accounting practices. The government demanded you count "hypothetical" income that you might not ever receive forcing you to borrow/dip into reserves to pay them taxes for money you might never get.

seanw3

on Oct 11, 2012

Anyone read the purposed list of tax code changes Romney has in his platform? It would be really powerful if a president that claims expertise in business could think of solutions to these kinds of "hypothetical" problems. If America believed that changes like this were likely, he would go up at least 10 points in the polls. But his plans look like flim-flam to me. I don't think he can get enough of his proposals passed because the corporations would rather have the 20% tax reduction and the loop-holes. Why would they let their senators and congressmen vote against their interests? That is the real disconnect in his plan. Now, if he could convince people that he can control the Corporate dominated lawmakers with some sort of deal, that would be another story. But I would want it in writing before I cast my vote.

Looking into the likely future, it might just be better to hire Romney and hope something works out. But it's a risk to do that in the current recovery. With Obama at least we have some security and we know what he will try to do. If Romney hadn't of promised everything to everyone so belligerently, I might be swayed to go for his logic. Really, the electoral process is just too septic to function. It's about time we restructured to a popular vote with tightly guided contracts for each candidate. You should have to sign a contract with the people you represent to do the things you promised.

Speaking of trust, does anyone have the specifics of Siegel's profits and losses? The claims he makes could be manipulative or they could be realistic consequences. Both are plausible and and even if it was meant to manipulate, it could still be true. The problem with this story is that politics run on narrative. If you become political everything you have ever done is going to be a part of the story. Even if you built a house, it is attributed to your character. The problem with our people is that we all already have a narrative built up in our minds. Any new information seems to be presented in two narratives and we choose the one that best fits our overall understanding. So to people like ORION, he is a rich bastard. To people like Frogboy, he is a concerned businessman. As long as people continue with this kind of assimilation of information, communication is impossible. What it really comes down to is a broken line of communication in a septic form of democracy. You can't start a debate until both sides agree on the facts. Even in this post, there is no order to the knowledge or proper rebuttal of information. Facts are either denied or ignored in favor of new facts. America may have been founded on one of the most scientific and efficient forms of government, but we as a people have not evolved to be good members of that form. After almost 300 years, shouldn't we as a people be better at this?

UmbralAngel

on Oct 11, 2012

I think its silly to think that fixing the economy has to do much with taxes.

I think the best thing the government could do is declare a 50% across the board budget cut and start paying off our ridiculous national debt. Once that is paid off they can freeze those spending levels and cut taxes in half. By 2030 we could be debt free and have one of the lowest tax rates in the world.

Jafo

on Oct 11, 2012

UmbralAngel

reply 43

Fixing the economy has to do with with getting rid of leeches that suck money out of the system without putting any back in. The people who are making lots of money but have no employees. Get rid of those and then the economy will more or less work itself out.

I think the best thing the government could do is declare a 50% across the board budget cut and start paying off our ridiculous national debt. Once that is paid off they can freeze those spending levels and cut taxes in half. By 2030 we could be debt free and have one of the lowest tax rates in the world.

Um....how do I say this gently?

If 'fixing the economy' was as easy as two sentences of 'solution' it's a fair bet it would not still even need 'fixing'.

No amount of re-arranging of the deck chairs has any impact on the outcome of an argument with an iceberg....

taltamir

on Oct 11, 2012

seanw3

reply 42

Anyone read the purposed list of tax code changes Romney has in his platform?

I did, most made me go "hey that makes sense"

Although in the debate he backtracked and was engaging in the same "rich v poor" BS obama was which is not what is in his platform.

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