For this luggage maker, taxes are a “bloodsucking parasite” on his business

[Suzanimal]

I recently bought new luggage. If I had read this first, I would've bought his.

From the outside, Don Chernoff looks like he has the life.

The 57-year-old former Intel engineer lives comfortably in Reston, Va., where he runs his one-man luggage company, answers only to himself and pockets a low six-figure income.

It doesn’t look so glamorous from where he sits.

Chernoff and his 16-year-old luggage firm, called SkyRoll, have weathered two recessions, a retail downturn, occasional problems in his supply chain and an 18 percent import-duty tax (it came to $100,000 last year) that the curmudgeonly businessman really, really dislikes.

“It is analogous to having a bloodsucking parasite attached to your body, except it’s the federal government and they attach themselves to my wallet,” he said.

The story of how a materials engineer and inventor ended up selling luggage comes down to a simple motivation: “I wanted to work for myself.”

His road to self-sufficiency includes educating himself on patent law, joining an inventor group, endless cold-calling of retailers and — the fun part — creating new products.

Chernoff asked me to write about the unglamorous side of business ownership after reading my recent column about another entrepreneur who had to unload a big chunk of his stock portfolio at a big loss to keep his family fed during the lean start-up years.

“I really hope you can write in more detail about the other issues that make it hard to survive as an entrepreneur,” he said. Between recessions and taxes, “sometimes I feel like, no matter what I do, I’m at the mercy of forces beyond my control. No one writes about the unglamorous side.”

....

https://www.washingtonpost.com/busin...=.1cec6d5eeb2b

[specsaregood]

At least he can avoid the 18% import-duty tax if he chose to do so...

[oyarde]

Sounds like he needs help with his taxes .

[Danke]

I recently bought new luggage. If I had read this first, I would've bought his.




https://www.washingtonpost.com/busin...=.1cec6d5eeb2b

Not a subscriber. Can't read full article, -rep.

[TheTexan]

There is nobody in this country who got rich on their own. Nobody. You built a factory out there - good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory...

[euphemia]

That sounds an awful lot like what Obama said. "You didn't build that."

Just want to remind you all it is the Constitutional responsibility of Congress to maintain a post office and the roads needed to deliver mail. Look it up.

[Suzanimal]

Not a subscriber. Can't read full article, -rep.

I'm not a subscriber either. --rep

[specsaregood]

That sounds an awful lot like what Obama said. "You didn't build that."

Just want to remind you all it is the Constitutional responsibility of Congress to maintain a post office and the roads needed to deliver mail. Look it up.

I may just be dense; but I have no idea what part of the OP you are referring to with this comparison.

[Zippyjuan]

He imports from China and Thailand and is worried about Trump's proposed "border adjustment" taxes (I used google search under "News" and was able to read the article). https://www.washingtonpost.com/busin...=.a6b088defae8

The products are made in Thailand and China and sold through SkyRoll’s website, as well as at Men’s Wearhouse and Jos. A. Bank bricks-and-mortar retail stores. They are also in a Canadian men’s store called Moores and some independent Washington-area luggage shops. The retailers account for 75 percent of total sales; the rest is direct to customers through SkyRoll’s online site.

The luggage is shipped in containers to the Port of Los Angeles, where they are then moved by truck and train to distribution centers or, sometimes, directly to the stores. The cost to ship a 40-foot container from Asia to the United States is around $5,000, not including import duty.

SkyRoll’s annual revenue drifts between $1 million and $2 million, depending on how many units are sold. A good year will bring 25,000 in sales. A poor year will see that number drop to 10,000. Chernoff prefers online sales because he gets to keep more of the sale price.

So Chernoff’s bottom-line profit, which he lives on, can run from more than $100,000 to well over $200,000 after subtracting costs for manufacturing, shipping, Web design, accounting and that dreaded import duty. The company has zero debt.

Now with the Trump administration’s proposal for a border-adjustment tax, Chernoff worries about a new bloodsucker feeding off his business.

“Although he will pay more in tax due to the border adjustment, his total import costs will not go up,” according to Kyle Pomerleau, director of federal projects at the Tax Foundation, a non-partisan think tank headquartered in Washington. “ The value of the U.S. dollar would increase to offset the additional taxes he would have to pay.”

Chernoff doesn’t believe it.

“If the BAT is on top of this import duty, as you say, then I might as well just file bankruptcy now and get it over with,” Chernoff said.

Border Adjustment Taxes are applied to imports, not on exports. It would mean higher prices for consumers as well as higher costs for producers who use imported resources to produce their goods here.

They make luggage designed to roll up rather than lie flat.

https://www.skyroll.com/

[oyarde]

Moores in Canada is also a place where you can rent a tux .

[bunklocoempire]

That sounds an awful lot like what Obama said. "You didn't build that."

Just want to remind you all it is the Constitutional responsibility of Congress to maintain a post office and the roads needed to deliver mail. Look it up.

Maintain using a sound currency?