David Siegel owns Westgate Resorts, the largest privately owned time-share company in the world and has 7,000 employees. Westgate Resorts is a real estate company, a hotel company, and time-shares 12,000 “villas” in 28 resorts in 9 states. It has yearly revenues of $1 billion.
So, let’s discuss a few facts about the real estate and hospitality industries. Real estate typically works on commission. Even time-shares are sold on commission. Commission employees are technically independent sub-contractors who are not provided benefits. Hospitality is like retail. Loads of part-time jobs to avoid providing employees with access to health insurance. Only management gets full-time.
Now, it is possible that Siegel is a very unusual hospitality and real estate employer and actually hires full time employees and provides them with benefits.
Siegel sent an e-mail to his employees this week telling them that if President Obama is re-elected, his taxes will go up and he will have to fire some of them, but he didn’t want to influence their votes. The e-mail said, “if any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company. You see, I can no longer support a system that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, so will your opportunities.”
Of course, it wouldn’t have anything to do with the plans for building the largest privately owned property in America – his $100 million, 90,000 square foot mansion outside Orlando. It is modeled on the Palace of Versailles in France, The Sun King, Louis XIV’s little digs. 90,000 square feet is 300 feet by 300 feet, 100 yards by 100 yards. Imagine a football field (between the goal posts) and half a second football field next to it. Nice little house for a 76-year-old tycoon, his 45-year-old beauty queen wife, they seven biological and one adopted children, 14 housekeepers and 5 nannies.
Siegel has been having some financial problems in the past few years, starting with the 2008 $5.4 million award to a former employee for sexual harassment, followed by his attempts to “save” a high rise hotel in Las Vegas as the economy collapsed.
Westgate was started in the early 1970s. So, let’s review a moment, shall we? Since Siegel started his business, the top income tax rate has gone from 70% to 50% in 1982, to 38.5% in 1987, to 28% in 1988, to 31% in 1991, to 39.6% in 1993 and finally to 35% in 2003. If we use 1975 as a starting date for his business, he has paid higher taxes than he pays now for 23 of the 37 years he’s been in business.
And then there’s the business taxes. Westgate Resorts is privately held, no public offering of shares. According to our tax code, that makes Westgate a “small business.” That means that Siegel, Westgate Resorts, has benefitted from 18 – count them eighteen – tax cuts from the Obama administration. And that’s on top of all the tax breaks that go to small businesses anyway. Every Congress sells us tax breaks for small businesses to help the economy.
But, if President Obama manages to get a Democratic House and Senate that restore the tax rates under Bill Clinton, which were still lower than 13 years worth of Siegel’s business career, he will be so financially stressed that he will have to lay off workers. Westgate has survived the economic collapse, the business is flourishing, and they have resumed construction on the palace, but it’s all just dust in the wind if Obama wins. As he told his employees, “Even to this day, every dime I earn goes back into the company. Over the past four years I have had to stop building my dream house, cut back on all of my expenses, and take my kids out of private schools simply to keep this company strong and to keep you employed. Yes, business ownership has its benefits, but the price I’ve paid is steep and not without wounds. Unfortunately, the costs of running a business have gotten out of control and let me tell you why: We are being taxed to death and the government thinks we don’t pay enough.”
He was a bit more obvious in the past, when he polled who his employees planned to vote for, and if they favored Dubya, he made sure they were registered.
No one can follow you into the voting booth. No one can legally ask you who you vote for. It is not just our sacred right to vote, it is our sacred right to secretly vote. Siegel’s employees should make sure they see or read about the documentary about his wife, The Queen of Versailles, and then decide who they are going to vote for. Mrs. Siegel owns shoes that cost more than some of his employees make in a year. They really want to get a look at those.