Issue link: http://read.dmtmag.com/i/101441
2013 Business Outlook range of 11 to 21 percent more than the previous year. Dealer investments will be different in 2013: the majority (38 percent) plan to invest only the same dollars in inventory this year; 34 percent are going to spend less on inventory; and just 28 percent plan to invest more than they did in ���12 ��� and among those, most will increase their spend by no more than 10 percent. Doug Hansen, president of W.I Clark, the Deere dealer based in Wallingford, Conn., was one of the survey respondents who was less than happy with year-end inventory volume. He said they had increased 2012 inventory spending by more than 40 percent. ���It���s done reasonably well in the rental end of the business, which is up,��� he said, ���but the sales end of the business was not quite as vigorous as we would have liked to have seen.��� The Taxing Question Another survey respondent summed up the business mood of many in a written comment: [The] economy remains a huge drag even in sectors that are consuming equipment ��� government is failing to support businesses. [There���s] too much uncertainty on so many aspects: tax, health care, liability, fuel costs, environmental regulations, and on and on.��� While 70 percent of dealers indicated that their 2012 year-end results squared up with what they had projected for the year, hitting profit targets is about to get more challenging with all those ���many aspects��� shifting about like the moving ducks at a carnival shooting gallery. At the head of the list, taxes seem to be on everyone���s mind. Dealers are braced for the probability that they���re going up. ���As part of the overall economy,��� said Basu from the ABC, ���whether or not the nation falls off its fiscal cliff ��� a collection of spending cuts and tax increases that kick in at the end of the year ��� certain taxes likely are headed higher.��� In a press statement, Basu specifically predicted increases in marginal income tax rates to preBush levels, increases in tax rates on capital gains and dividend income, and expiration of the payroll tax credit in the first quarter of 2013. Both Berry and Hansen said they fully expect their tax bills to go up in 2013, but neither is currently taking specific management action to mitigate or plan for the eventuality. Hansen noted that his acquaintances in the income brackets that will likely be most affected are saying they don���t mind paying more taxes, and he agrees, with one caveat: ���I���m fine with paying more,��� he said, ���but we also need to be working on the other side of the ledger.��� ���We could let all of the tax rates expire and it wouldn���t be anywhere near enough to balance the budget,��� said Berry. ���So what���s it going to take to shift the conversation to spending as opposed to taxes, because taxes aren���t going to solve the problem. How many jobs do you want to lose by raising taxes? You can lose a lot of jobs by raising taxes on everybody, you can lose a few less jobs by raising taxes on the rich, but you���re still going to lose jobs.��� Bruce Harvey, president of H&V Equipment Services, a threelocation multiline dealer based in Corpus Christi, Texas, isn���t quite as concerned about how the tax die are going to roll. ���I put 98 percent of everything I make back into the company, and the only time you really have to pay taxes is like when you pick your chips up from the table in Vegas; when you cash out. So I don���t have a big concern with what they���re doing currently, because I���m not ready to cash out. When I get ready to cash out, it���ll have a huge effect.��� He added that the Obamacare ���tax��� isn���t too troubling either, because at least it will impact (continued on next page) Ajax Demolition Tools are manufactured from high grade impact alloy, engineered specifically to maximize performance for any application. SPECIAL APPLICATION POINTS AVAILABLE ��� Post Driver ��� Deck Buster ��� Frost Wedge ��� Tamping Tool ��� Special Length 800-323-9129 Fax: 847-455-9242 www.ajaxtools.com January 2013 | Construction Equipment Distribution | www.cedmag.com | 35 32_Biz_Outlook_Feature_KP.indd 35 12/21/12 1:35 PM