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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 loose 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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SPLOST paves the way for roads, streets and bridges
The Atlanta Journal-Constitution
Gwinnett voters will do more than elect a new president come Nov. 4. On election day, voters will be asked to renew a Special Purpose Local Option Sales Tax, or SPLOST. The 1 percent sales tax will be used for roads, bridges, libraries, public safety and other improvements.
Residents have a history of supporting the tax; since 1986 the county has approved more than $1.6 billion to publicly finance necessary infrastructure. The tax allows the county to complete projects on a pay-as-you-go basis, according to an editorial in The Atlanta Journal-Constitution that ran Thursday.
Do you think Gwinnett voters will stay the course, and vote, “yes” on the ballot measure?
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The $480 million-dollar man
The Atlanta Journal-Constitution
Richard Fuld, the chief executive officer of Lehman Brothers Holding, Inc., apparently pocketed hundreds of millions of dollars while the company’s financial crisis grew year after year, the Los Angeles Times has reported.
At congressional hearings held Monday, Henry Waxman, a California Democrat, presented information that put Fuld’s pay at $484 million - earned in salaries, bonuses and stocks since 2000.
Not true, said Fuld.
It was “a little less than $250 million, still a large number, though,” he said.
Is any CEO worth that kind of money?
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Battling the auto-sales slump
The Atlanta Journal-Constitution
Last month, Jeff Burg sold eight cars at the Ed Voyles Acura dealership off Peachtree Industrial Boulevard.
In a good month, the Norcross resident sells 15 or more. But sales are dwindling.
“It’s tough man,” said Burg, who’s sold vehicles for six years. “The pressure is on.”
Nationwide, auto sales have plunged. Dealerships have closed, including Bill Heard Chevrolet, the Columbus-based firm that shut down 15 locations and laid off 2,700 workers.
Major automakers reported a 26 percent drop in U.S. sales for September; the Detroit Three reported a double-digit decrease in sales.
The headlines reinforce what Burg already knows.
“There is not much traffic,” he told me. “I know people who have been doing this for 20 years, and they say they’ve never seen anything like this.”
He runs through the usual factors offered as explanations for the decline in automobile purchases. High gas prices. The credit freeze. Stricter loan financing. For Burg, all translate into fewer deals.
“People don’t have money for a down payment,” he said. “Banks are looking for people with pretty strong credit. If you’re a little shaky, they are saying, ‘no.’ It used to be you could work with Bank of America or Wachovia or whatever for a better rate. Now they say, ‘Nope, we’re not doing it. If you don’t like it, too bad.’ “
How’d it get to this point?
First, let’s tone down the volume from the economic experts and analysts with pedigrees. View the economic meltdown, instead, through the eyes of a common man with common sense. One root cause of the crisis stems from the fact that capitalism has been hi-jacked by a five-letter word.
G-R-E-E-D. Corporate greed. Political greed. Materialistic greed — in which many of us pine for items, products and stuff that we really can’t afford, yet feel entitled to. The party had to come to an end, had to crash at some point. The housing market collapsed first, and now it appears banks and the auto industry will suffer domino effects. Who knows what sector will tumble next.
Burg has faith the current financial crisis will rebound sooner, not later.
After all, he said, gas prices and the local supply already appear to be stabilizing. We’ll elect a new president in 31 days.
“I’m not going anywhere,” he told me. “I don’t know what the time table is, but I hope in October, [the auto industry] springs back. People need cars, and we have a great inventory and a great manager.”
I talked to Burg on the second day of October. His month had started off on a positive note.
He’d already sold one car.
Fourteen more to go.
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Main Street vs. Wall Street
The Atlanta Journal-Constitution
CNN has reported that a “sweetened” bailout plan could be passed by the Senate late tonight. If that happens, a House vote is expected on the issue by mid-day Friday. $700 billion. That’s a lot of cheese. I, like the majority of most American citizens, disapprove of the bailout because I’m not so certain it’s going to benefit Main Street as much as some political supporters say. Your thoughts?
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Latest comments
The poor black man and his shoe shine business is toast. He simply needs to declare bankruptcy, like Donald Trump did, and invent a new entity for his shoe biz, say, the Resoling, Reheeling, Retonguing, SOLEMAN. They wont know what hit them.... read the full comment by Tyrus Raymond | Comment on No bailout for shoeshine man Read No bailout for shoeshine man
LT, tell me, have you ever been audited by the IRS?... read the full comment by Paula | Comment on No bailout for shoeshine man Read No bailout for shoeshine man
LT- usually you crack me up, but you’d have to be a cold SOB to not feel sorry for this guy. He shines shoes for a living, barely gets by, didn’t pay his taxes for years and now is in danger of losing everything he has because the IRS is hounding... read the full comment by Stone | Comment on No bailout for shoeshine man Read No bailout for shoeshine man
Waaaaaahhhhhh. Another insipid Badie Blog. Please let the financial crisis put the AJC in such a position that they have to fire this clown. LT5000... read the full comment by LT5000 | Comment on No bailout for shoeshine man Read No bailout for shoeshine man