Skeptical About Skepticism,Pessimistic About Pessimism, Optimistic About Optimism
Today, I read a post from a company that regularly publishes content geared towards independent retail businesses. The headline suggested that small businesses are "skeptical" about prospects for the future. Well, I'm just as much of a sucker as the next guy, so I took the clickbait. After all, as brandowners, if we know what's troubling our current and future wholesale customers, maybe we can offer better solutions or at least better understand their concerns.
As I awaited the download, I thought about some of the possible stress points for small retailers. Competition from big box stores and online juggernauts? Consolidation of regional players creating new megachains? Trade wars, inflation, Wall Street volatility? Health insurance? Hiring and retaining qualified and conscientious employees?
No, it was none of those. This article linked the partial government shutdown that ended on January 22nd with a 2.3% decrease in the number of tax refunds expected to be issued by the IRS this year. Anxiety over the shutdown, combined with news about reduced tax refunds, has purportedly turned previously optimistic business owners more pessimistic.
At first glance, it seems credible. How can we blame business owners for being skeptical when taxes are supposed to be lower under the new tax law? If that's true, what in the heck is happening to that 2.3% of refunds? Small businesses are getting screwed again, right?
But there's a bit of a problem with this analysis; it's based on a completely false premise. If small businesses (or individuals, or bigger businesses) are pessimistic or “skeptical” because they are getting a smaller tax refund or not getting a refund at all, instead they should be celebrating their own accounting acumen and money management skills.
Why? Well, it's quite simple. Tax refunds are the return of overpayment of taxes, and overpaying one's taxes is in essence an interest-free loan to the federal government. Refunds have nothing to do with tax rates; they are a function of the difference between taxes withheld and taxes actually owed. Since corporate and personal tax rates are both lower, most businesses in America can keep more of their earnings now than they could under the previous rates. In some cases, the taxpayer will receive only a very small refund or none at all because they kept more of their money throughout the year instead of "lending it" to the federal government. The alternative would be to overpay by having excessive amounts withheld throughout the year just to get a bigger refund.
Never mind the facts, this “news” was trotted around the media last week and reported as if the IRS was cutting refunds “because of the shutdown.” While the shutdown will delay some refunds, which is indeed difficult for those counting on these refund checks, there is precisely zero correlation between the government shutdown and the amount or number of refunds.
I'm skeptical about a rising tide of skepticism in business. Visionaries and skeptics don't play well together. But the tax refunds story shows that being skeptical about media memes has become a requirement for thinking people. It's essential to question everything one sees on a screen, hears on a radio, or reads in a paper.
I'm pessimistic about defeating pessimism. It's a tough foe, lurking in the shadows of our own souls and ready to smash our dreams if we allow it. In business, wisdom and survival demand vigilance and caution. Pessimism is something else altogether. It's the refined art of identifying everything that can possibly go wrong, dangerously combined with the inability or unwillingness to make things right. Those without the creative energy to devise solutions become exquisitely adept at articulating problems. They thrive on spreading their message of doom, and their pessimism can awaken yours if you let it.
But I'm optimistic about optimism, as naive as that sounds. Optimism is the unflappable belief that if we work hard, never stop learning, and do the right things ethically and morally, things will work out for the best. The best thing about optimism is that it works even when it's wrong. It's a functional plan of action regardless of outcomes.
How so? Optimists are happier people, so they better spouses, wiser parents, more loyal friends, more inspiring bosses, and more supportive co-workers. Realistically, optimists will fail, and be disappointed, and disappoint others along the way, just like pessimists. But even when things don't work out as hoped, the optimists are still ahead of the game because they've lived a better life along the way. And when the rough spots hit, optimists are better equipped to figure it out, fix it if possible, and move on.
Optimism is practical, because adopting it as a life philosophy will make you happier and more productive during the journey. It doesn't cost us anything to believe that there is something wonderful at the end of the rainbow, as long as we are wise enough to know that it is the pursuit that defines us, and not that elusive pot of gold at the end.
Anthony Bennie is the Founder and Chief Nutrition Officer of Clear Conscience Pet and the inventor of award-winning SuperGravy Holistic Pet Food Toppers. Anthony is the Co-Host and Producer of the “Bennie & the Pets” Podcast along with Clear Conscience Pet Co-Founder Amanda Malone Bennie. Anthony, Amanda, and Clear Conscience Pet are winners of 22 awards including the Pet Industry Icon Award and the Women of Influence in the Pet Industry award. Contact Anthony at [email protected]