AM Colorado, Brian DelGrosso, September 5, 2013

Station:     KFKA, 1310 AM

Show:        AM Colorado

Guests:     DelGrosso


Date:         September 5, 2013

Topics:      Education Finance Reform, Amendment 66, Initiative 22, SB 213, Income Tax Increase, Two-tiered, One Billion Dollar Tax Increase, Small Business, Sole Proprietorship, Limited Liability Corporation (LLC), Minimum Wage Increase,  McDonald’s Dollar Value Menu, AFL-CIO, Unions, Tiered Tax System, Class Warfare, Legislative Council, Pay Raises, Corporate Income Tax Rates 

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HOST TOM LUCERO:  Welcome back to AM Colorado, NewsTalk 1310, KFKA with your host this morning, Tom — Devon on the live remote over at the Loveland Embassy Suites for the Business Appreciation Breakfast, this morning.  And joining on the phone, right now,  small business owner and State Representative and he is the leader of the Republican Caucus – minority Republican caucus, but hopefully the majority Republican caucus  after the 2014 election, good friend to the show, you hear him every other week during the legislative session with Devon and me, State Representative Brian Del Grosso.  Brian, how are you this morning?

COLORADO STATE REPRESENTATIVE BRIAN DEL GROSSO:  Hey, I’m doing great, Tom.  How are you doing this morning?

LUCERO:  We’re doing excellent, having a lot of fun!  I don’t know, did you catch the interview with Andy Worth, CEO of Squaw Valley, this morning in the six o’clock hour?

DEL GROSSO:  You know, I didn’t.  I was taking care of a bunch of other stuff, so I missed that.

LUCERO:  Okay.  You are in for a real treat this morning.  What a just down to earth guy, actually cut his teeth in northern Colorado, graduated from CSU, then spent time up in Rocky Mountain National Park, Estes Park, and migrated over to Steamboat Springs, and has now worked his way up to become CEO and President of  Squaw Valley.  Just a very thoughtful, articulate guy when it comes to conservation and how we all work together in the environment.  He’s in a similar environment – Squaw Valley –to northern Colorado.   Just – it was a real treat to have him.  But, you’re a small business owner as well.  Talk to us about being a small business owner in northern Colorado, because it is a fabulous place, not only to raise a family but to be in business.

DEL GROSSO:  Oh, it is.  I mean, that northern Colorado as a whole, we’re pretty lucky as compared to a lot of other places around the state.  It seems our economy is doing a lot better up here, and so, you know, myself along with several other small businesses, I think, are — we’ve found a little place of the country where we can continue to thrive.  And so it’s a pretty exciting place to be doing business, right now.  And then, as far as your previous comments, I always love hearing stories about guys who just kind of started out small and then grew and went to something big.  That’s what America is all about.  That’s basically what we were founded on as far as the amount of work you want to put in, and you know, the sky is the limit.  And so, it’s always exciting to hear people’s stories like that.

LUCERO:  The sky is definitely the limit, but there’s also, it seem s like a cultural shift, the other people we’ve talked with this morning, we’ve stayed a little bit more focused on the business aspect of what they do and we’ve not ventured into the political side of it too much.  But you’re in a unique position.  You’re an elected official.  And so, we can get a little bit more political with you, Brian.  And that is, there is no guaranteed outcome in the United States of America.  But the one thing, historically, here in America, is that government has tended to stay out of the way, so you can go out there and work and government has tried to not become an obstacle to your success.  But it seems like,  more so lately in the last few years, but  we’ve been moving this way progressively over the last twenty to thirty years, where government is becoming more of an obstacle to small business in this country.

DEL GROSSO:  Well, you’re absolutely correct and every year I do a lot of going around and talking with different business groups, not only northern Colorado but around the state.  And the one thing they say, “You know what, Brian?  [Do] you know what you guys can do to help us out the most?”  And it’s like, “What’s that?”  And they say, “Get out of our way.  Leave us alone.  Do no harm.”  Because the reality is most of us that are small businesses or any kind of other business, you know, we’ve got competition.  And so, we spend the majority of our time trying to grow our business but at the same time fighting competition.  So, when you’re doing that whole deal, there, the last thing you want to do is also have to deal with government and regulations that stop you from keeping your eye focused on your business and focused on your competition and then having to redirect your focus to something different.  And so you’re 100% correct, that you know what, government just needs to get out of the way.  And somehow, a lot of folks just don’t seem to understand that.  And they’re always there, “Well, no, we’re really here to help you, we’re really here to help you.”  But the reality is the more the government helps, usually there’s some unintended consequences.  And so, by helping one person, you hurt two or three others, and so that’s why government has no business being in the middle of it.

LUCERO:  Well, and let’s talk about one of the big issues that’s going to be on the ballot this November, Brian, speaking of those obstacles.  One of the things that is certainly an obstacle for business that people, — it’s a disconnect.  People think that because you’re in business, you do well financially, and therefore we can tax you more .    The disconnect is:  people don’t realize businesses don’t pay the taxes.  The consumers ultimately pay the taxes , even though the businesses themselves write the checks to the government, they put and build the tax into the price of the product that they are selling.  So, ultimately it’s the consumer paying the tax.  But, we’ve got a big tax headed for the ballot in November.  They made the ballot yesterday.  I believe it is going to be Amendment 66, the billion dollar tax increase for citizens here in the state of Colorado. Why don’t you give our listeners a little bit more background on what we’re going to be looking at voting on this November.

DEL GROSSO:  Well, you’re absolutely correct.  And that’s actually, we – I’m on the legislative council, and one of the things we were discussing yesterday was the blue book.  And if you don’t know what the blue book is, that’s the thing that comes along with your ballot that describes what’s on the ballot, so the different initiatives, and it gives an analysis of what’s going on, and then it gives some, you know, some ‘for’ and ‘against’ type of things.  And one of the things on Amendment 66 that they try to tout is, “You know what?  We’re not going to raise the corporate income tax rates, so businesses don’t have to worry about that.”  Well, the reality is, I think it’s mid- to upper eighty percent of all businesses in Colorado are small businesses.  And close to eighty percent of those small businesses are set up either as a sole proprietorship, an LLC, or an S Corp., which means that their taxes that their business makes flows through onto their personal income tax.  So, you will see about 80% of businesses in Colorado see a tax increase as a result of this.  But they try to downplay that and they’ll try to sell all day long that the corporate income tax rates won’t go up so it won’t affect business.  And you’re right.  When the taxes go up, not only does that get passed along to the consumer, another way that that affects folks is that affects pay raises for the business.  So maybe, because the taxes went up, I’m not going to be able to give pay raises this year.  I’m not going to be able to hire somebody, or I’m going to have to let somebody go, or I can’t expand.  And so, we don’t live in a vacuum.  And so, anytime that there’s a dollar coming out of that business that’s not going back into the business has some unintended consequences.  So, that is – you’re absolutely correct, that billion dollars – the majority of that will come out of the businesses of Colorado.

LUCERO:  […] Over at the Embassy Suites for the Business Appreciation breakfast, put on by the Loveland Economic Development Group.  So, Brian, talk about the tax structure for the billion dollar tax increase.  So, it’s bifurcated.  They’re raising taxes on individuals who make more and as you were describing, small business owners – they are ultimately going to be taxed as well in individuals.  But it’s not a straight across the board tax increase on everybody.

DEL GROSSO:  You’re right.  Now it’s a tiered system.  So, there again, we’re going to play some class warfare here in Colorado.  So, it’s always been 4.63%.  So, it doesn’t matter if you’re a business, if you’re – or what level of income, whatever that is, everybody pays the same amount.  So, [it’s] a flat tax.    But now we are trying to see that – “Okay, we’re going to raise taxes even on the smaller income folks, but now you higher income folks, not only are we going to raise taxes on you, we’re also going to kick up a notch the percentage you have to pay.  So, it’s kind of a double whammy for those folks.  And so, you’re right.  That will be the first time in Colorado that we have a tiered tax system.  And most of the other states around the country are moving away from that.  So, you know, I’ve been to several different conferences this year where I hear about  states all over the country that are lowering their tax rates, and Colorado is raising their tax rates, and so, that’s just one more thing to make Colorado look less attractive to those that might want to move to the state.

LUCERO:  Well, Brian, let’s take a look at it nationally.   Because we’ve seen a lot – and you are a restaurant owner, a small business owner – we’ve seen here in the last week, the AFL-CIO – the unions – more or less get involved and say we want to see minimum wage raised to $15 an hour.  We saw strikes all across the country as they related to McDonalds, here.  I think it was earlier this week – it may have been last week, and we see planned strikes with Wal-Mart as well.  What are your thoughts as a business owner as you’re watching this trend sweep across America where they want to raise minimum wage to $15 an hour?

DEL GROSSO:  Well, what makes businesses grow is certainty.  When people are going to invest in their business, or if they’re going to start a business, or if they’re going to go out and work on trying to get that loan, or whatever it is, they want to know that they’re going to have a chance at success.  And things like this, tax increase, things about the minimum wage increase,– those are all things that business owners look at that and it scares them to death.  And it’s not so much that businesses are greedy and they don’t want to pay their employees so much.  It’s just the reality that there’s a cost of business.  And a minimum wage of $15 an hour, what that would do to a lot of businesses, it’ll put a lot of people out of business.  But at the end of the day, it’s just going to raise prices for everything. So the funny thing is, that these folks are protesting at McDonald’s because we want $15 an hour.  But if McDonald’s was paying fifteen bucks an hour for their entry-level folks, the reality is, you know, the “dollar value menu” or some of that stuff is now going to become the “five or six dollar value menu”.  And so, at the end of the day, yes, you’re bringing home more money, but what the value of that dollar you’re bringing home is not any more powerful than what it currently is.  So, you know, it doesn’t do anything to spur the economy.  If anything, it sputters or shuts it down.

LUCERO:  Excellent! I couldn’t have said it better myself.  State Representative Brian DelGrosso.  Brian, I know the breakfast is about ready to start.   Thank you for taking the time out to join us this morning!

DEL GROSSO:  I appreciate it, and too bad you can’t be here.  These pancakes and everything else are looking pretty good, so – [chuckles].  I’m sure Devon will take care of it for you, so–.

LUCERO:  Yeah!  I’m sure Devon will save me some breakfast this morning! That’s just not going to happen!  Hey, Brian, thanks so much!

DEL GROSSO:  Hey, Tom, thank you.  Have a great day.