24 April 2019
8 Oregon Laws That Will Wreck Your Way of Life
By Tootie Smith
Oregon state government soon
to sink under the stupidity of its own ideas.
1. $26 billion
PERS retirement debt. Originally started as an incentive to give retirement to
people to work in government back when the jobs paid little. Today through
shrewd union negotiations for higher and higher wages and willing elected
officials who gladly accepted tons of union cash to support their elections, we
see a debt too big to pay.
2. State wide rent
control that limited, (or guaranteed) 7% rent increases plus inflation. This
attempt to control costs will backfire as landlords immediately raised their
rents or sold their properties to larger conglomerates opting for a more stable
3. Massive Gun
control bills aimed to disarm what politicians can’t control — your speech.
4. Remove measure
50 property tax limitations could increase your property taxes by as 40%.
mortgage interest deductions on primary and secondary residences, for many.
6. $2 billion
gross sales tax on businesses. Politicians think you will think this is a tax
on someone else, so it won’t matter. It’s those big bad businesses that gives
us jobs, 401K’s and the products we demand to buy or the services we need.
vaccinations that take away parental choice with consultation with your doctor
and gives Oregon Health Authority the power to forcibly inject your children
8. Increased taxes
on cell phones, beer, wine, cigarettes, vapors, groceries, fuel for cars and
trucks, home heating oil, planes, trains and automobiles, timber and
It’s not all bleak. There’s a fix. Your vote
matters and there’s an election just around the corner
18 April 2019
Shoe Dog Vs. $2 Billion Sales Tax
By Tootie Smith
$2 billion sales tax proposed by the Super Majority of
elected democrats on business will raise prices to consumers as it fails to
consider profitability and cash flow.
Nike founder, Phil Knight, in his book Shoe Dog, tells of a situation in mid-1970’s where he almost went bankrupt even though the company had gross sales of $40 million. Although that seems like a lot of money to most of us, his cash flow was nil.
Profitability alluded him as the high cost manufacturing and
retailing swallowed much of his end of the month cash. One day he found himself
unable to pay a monthly payment to his Asian shoe supplier, a key asset for
Nike. At the same time, he realized he didn’t have quite enough money to make
He decided to go ahead and write the payroll checks knowing
a large deposit was coming through within hours or days. Knight relied on what
was called the “float.” By the time the payroll checks were cashed, deposits
should be received. However, the deposit was late. Seems his timing was a bit off.
The “float” was used by many businesses knowing that other
money would be forthcoming. Everybody did it. Later he found out, the company
that sent the deposit was also relying on the “float.” Suddenly, one afternoon,
he started getting phone calls from his employees and managers that their
checks had bounced. Knight panicked. He went to his local Portland banker at
the time with his company accountant and pleaded for mercy.
For years this banker had warned Knight of his low “equity
position” despite continued escalating growth over the past 15 years. Unmoved,
the banker froze Knights accounts and refused to continue the banking
Desperate and embarrassed, Knight knew he was finished and
took the only action available to him at the time. He walked across the street
to the Bank of Tokyo, where earlier he developed a relationship because his
shoe supplier from Asia was also a customer.
You see he owed them money too and sheepishly confessed to
them he could not pay. The Tokyo bankers were speechless. They had regarded
Knight and Nike as the golden boy of athletic shoes. Knight asked them for a
For three days the
bankers poured over Nike’s books and concluded that his sustained growth and
market share made Nike a good investment, even though they acknowledged his
cash flow was weak. They gambled that Nike would be a good bet based on the
last decades of continued sustained growth and loaned him the money. Knight paid his creditors and his employees
were happy with their paychecks.
Today we know Nike as one of Oregon’s most beloved and
profitable companies, born from a local son.
Point is, if gross sales tax had been around in mid-1970’s,
there would be no Nike, because they probably would have been forced into
bankruptcy because the company had no cash to pay the tax. With a sales tax,
the government gets paid first regardless of ability to pay or profitability.
Think about Oregon’s other successful businesses like
Columbia Sportswear, Intel, Portland General Electric, Precision Cast Part,
Reser’s Fine Foods, and oh yes health care darling – OHSU. They all suffered
growing pains in the beginning just like Nike.
How may startups exist today who find themselves in the same
situation as Nike did all those years ago?
Knight, now retired ten years from the company he birthed,
manages Nike Foundation and gives away….gives away… $100 million a YEAR to
Knight’s generosity in giving would not have been possible
if Nike went bankrupt, as surely as some companies in Oregon will do today if
this gross sales tax is passed.