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Saturday, October 11, 2008
No bailout for shoeshine man
The Atlanta Journal-Constitution
In 2003, Lawrence Hardnett may have made his worst mistake in almost five decades as a shoeshine man. He decided to start paying taxes.
Three years later, an IRS representative visited his shoeshine stand at Bennie’s Shoes of Norcross. He asked Hardnett several questions:
What’s the charge for a shine ($6 for a regular shine; $8 for a “spit” shine); how many pairs of shoes might you do on a truly busy day (30); what do tips average ($1 per pair).
Based on those calculations, the IRS informed Hardnett that he owed Uncle Sam nearly $90,000 in back taxes, interest and penalties. In this economy, for Hardnett, it may as well be $89 billion.
Hardnett agreed to a repayment plan of $175 a month, but that was before the economic downturn hit his business. In 12 years, he’s built up a loyal clientele at Bennie’s Shoes, but some regulars are feeling the economic pinch like everybody else. Getting shoes shined is a luxury, not a necessity.
“People shine their own shoes,” Hardnett said.
With his business experiencing a downturn, Hardnett fell behind on his IRS payments as well as his mortgage.
He has explained his situation to the mortgage holder and said they are trying to work with him. Uncle Sam, on the other hand, is playing hardball. A “federal lien” has been placed on Hardnett’s house for failure to make payments, according to IRS paperwork he showed me.
In recent weeks, we’ve learned about financial barons and tycoons who pocketed millions as they left lofty financial and investment firms in ruins. Then those same executives appear before Congress and offer solutions to the economic meltdown.
Will they be held accountable?
Free marketers seemingly run amok on Wall Street. Meanwhile on Main Street, the government is going after a big player — a shoeshine man. Here’s a man trying to earn a living, a man who acknowledges his wrongdoing and agreed to restitution, yet stands to lose his shirt.
“I don’t make $1,800 a month, but my expenses come to $2,400,” he told me. “It’s already the 9th of the month, I’ve only made $300. This is an honest living, but I’m at the mercy of the mortgage company and the IRS. I don’t know if there’s anything that can be done.”
It probably wouldn’t have mattered, but I wish the Wall Street high-fliers, presidential contenders and political posturers could have seen what I saw the day I talked to Hardnett, 58.
Tears.
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