What is the "fool's tax"?

Yep, I’m a noob. I keep reading people talking about having to pay the fool’s tax. What is it? Is this just a term used to describe some random expense that arose from something that was not, or should have been, planned for? Any specific examples? Something that makes you slap your head like Homer and yell “DOH”!!!

[quote=“wiseguy”]
Yep, I’m a noob. I keep reading people talking about having to pay the fool’s tax. What is it? Is this just a term used to describe some random expense that arose from something that was not, or should have been, planned for? Any specific examples? Something that makes you slap your head like Homer and yell “DOH”!!![/quote]

You are absolutely bloody right there.

The term “Fool’s Tax” came from Nick Sissy, oops I mean Sasso in an earlier post from me about paying too much for a business.

I mentioned that I got ripped off with shonky equipment, bad electrical wiring, understated expenses and other things that made me say much worse than “DOH” !!!

Basically, Nicole, oops I mean Nick, came back with the term “everyone pays their “fools tax” if you don’t do careful due dilligence” or something very close to that.

I’m sure he will come on here and give a more defined and concise explanation so he can show everyone he is much more intelligent than me with my low IQ (only 1 point below Nick’s) :smiley:

We have now adopted the “Fool’s Tax” terminology as a generic for paying too much, not doing due dilligence, being ripped off, not being thorough enough etc.

Dave

Example A:

You thought the price/cost sounded right at $500
Now you know the price/cost should be $375

Your total Fools Tax paid= $125

Example B:

You stay with your boring, dull marketing plan. Sales $8,000
You decide to take j_r0kks advice and doorhang Sales $8,833

DOH ! Your total Fools Tax paid= $833

DOH!!!

we call it stupid tax about the samething though

These fellers are lying to you. The fool’s tax is a 20% premium tax paid directly to me every day. I’ll send you my address.

In my case my attorney is calling it “fraud” and that I was “defrauded” not that I paid a fools tax. I was not a fool, I was lied to.

I think of it as the “learning” tax.
I paid it trading soybeans and now I am paying it in pizza business.
Cannot afford to pay the learning tax in another new business.

there is a way to reduce, even eliminate the “learing tax” in the pizza business…buy a tight franchise…
only difference is…I could not put honey in my dough like I did on the last batch…without lying…the price ig independence can be high.
…I do not know if this information can help anybody…
Otis

Yup. It is the difference between what we thought was a great price and what something is actually worth to someone who knows better and did their homework.

EXAMPLE: Buying a restaurant for the $185K asking price when the current owner describes how he pays the labor costs in unreported cash, really does 25% higher sales than he reported on his tax returns, has 12% labor costs, brings home a $50,000 profit on $300,000 in gross annual sales. FOOLS TAX: approx. $160,000

EXAMPLE: Saving money on operating expenses by not carrying third party driver insurance. You hire 21 year old without checking MVR to see the DUI and prior suspended license history. He runs stop sign with your car topper on his car, and totals a brand new $20,000 motorcycle sending rider to emergency room. FOOLS TAX: ask the jury when they sell your business to pay the award amount.

Fools try to get something for a great price, ignore their intuition to look behind the curtain at the man with the levers and microphone (Wizard of Oz reference) and forge right ahead to spend that money figuring that they just couldn’t loose this time.

Synonyms: Learning tax; idiot tax; price of the lesson; “D@mn it, they got me!”

To sum up what Nick said in plain Aussie language.

Being a bloody idiot !!! :oops:

Dave

[quote="wa dave

We have now adopted the “Fool’s Tax” terminology as a generic for paying too much, not doing due dilligence, being ripped off, not being thorough enough etc.

Dave[/quote]

Love the term and think at times its brilliantly applied but I have to tell you guys how I like to look at it:

Got my A.O.S. when I went to Culinary school. Got my B.S. three years after I made my first investment in the pizza biz. Got my M.S. after I tried my hand at a second pizza store about 10 miles from my first. And finally got my PhD in BUSINESS REALITY back in June 2006 when I achieved the following: one successful pizzeria, one closed pizza shop, one successful restaurant. Cost of school over 10 years: you dont want to know!

‘Cost of school’ and ‘fool’s tax’ are synonymous in my book; some of the best experience in life is paid for. :slight_smile:

I have learned all this:
Meditate often to become enlightened, don’t take lowest estimate, keep it simple stupid, work your freakin’ as# off, hire ‘expensive’ help and the most important, greet thy customer!!

At this point, schools are still trying to recruit me! :wink:

What about you guys? :smiley:

I guess Nick is like me - not hearing anything from schools because our IQ is way too low :lol: :stuck_out_tongue:

But then again he came up with the “Fool’s Tax” terminology so he may get an invite to lecture at the Harvard or Yale School of Business :cry:

Dave

I just got my recruitment notice when my prep table hit the skids. Now, I get to find out if I can make a score or write that check for the tuition at “school”/tax payment.

You don’t need a high IQ to get into these ‘schools’. All you need is money and they’ll be more than happy to take you in ! :wink:

Those are good lessons Y-yo. I like the motto “Work smart
and hard.” Opposed to the often used “Work smart not hard.”

Guys thanks for the laughs! :smiley:

Hey I’m not making jokes about Nick and me :stuck_out_tongue:

Dave