Wag-Aero's Demise

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Kristin

Kristin

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Kristin (The Aviatrix)
I went to the Wag-Aero website today only to be redirected to an announcement from Aircraft Spruce that it has acquired Wag-Aero. Consolidation probably inevitable, but not particularly welcome. Hopefully Spruce doesn't end up owned by private equity. Then things could get really tense for GA parts and supplies.

www.aircraftspruce.com

Aircraft Spruce Welcomes Wag-Aero Customers | Aircraft Spruce

Aircraft Spruce Welcomes Wag-Aero Customers Aircraft Spruce is pleased to announce the acquisition of the parts distribution operations of Wag-Aero.
www.aircraftspruce.com www.aircraftspruce.com
 
Aircraft Spruce sent out an email about that today, announcing the acquisition.
 
Kristin said:
Hopefully Spruce doesn't end up owned by private equity.
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Not sure if that will happen but I gotta say, private equity is ruining lots of things in lots of domains, especially healthcare, IMHO. To see what they’re doing to assisted living facilities, ER groups, even plain old “senior living” places is disheartening. Overall I’m a fan of capitalism but this kind of distortion is concerning. Not sure how to make it sane.

Just me…
 
Llewtrah381 said:
Not sure if that will happen but I gotta say, private equity is ruining lots of things in lots of domains, especially healthcare, IMHO. To see what they’re doing to assisted living facilities, ER groups, even plain old “senior living” places is disheartening. Overall I’m a fan of capitalism but this kind of distortion is concerning. Not sure how to make it sane.

Just me…
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I hear you! Need tax policy favoring income from producing goods and services rather than giving favorable treatment to passive investments.
 
So many of the things I might have purchased from Wag Aero or Aircraft Spruce I would now just order from Amazon. Same for bike stuff - I used to order from Bike Nashbar or Specialized on a regular basis, but haven’t in ages. Amazon has better selection, lower prices, quick delivery and painless returns if necessary.

Must be rough times for both brick-and-mortar stores and specialty online retailers.
 
Kristin said:
I hear you! Need tax policy favoring income from producing goods and services rather than giving favorable treatment to passive investments.
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We already have it, as a result of double taxation of corporate earnings.

Do the tax math on corporate earnings that are paid out as dividends. Start with non-qualifed dividends.
 
I started an aircraft parts business around 1990. I spent quite some time watching my competitors, including Wag Aero.

As the years went by I saw business's like AS and Chief make a lot of changes to keep up with the growing industry and the use of the internet.

Then a number of upstart companies came into the business and I initially thought they didn't stand a chance (trust was a huge factor back then). Yet the newer companies were part of the brave new world and were soon competing on a level field.
In my opinion Wag-Aero did not seem to pivot as the times, and the world, changed. Or at least they lagged far behind.

Saw this happened to a bunch of people in engineering as well, as that got bypassed by the world of computers. They were not able to adapt and had their careers cut short.

Of course the sale could have been for personal reasons and nothing to do with the above. They DID have a niche market to the scratch-built aircraft builders.
 
Wasn't wag aero a family run business. Maybe the owners were ready to retire and the kids didn't want the headache.
 
You know prices won’t go down.
 
RyanB said:
I haven’t found them to be terribly higher than most other vendors. YMMV.
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I agree, and on aviation specific stuff they're often the best deal. I did buy by epoxy and fiberglass supplies elsewhere because spruce was about 30% higher, although I later regretted doing so because it took 3 days to get the order from Amazon, whereas my spruce order showed up the next day, as usual. I hate paying the 8.5% Chicago sales tax, but having overnight delivery on anything in that warehouse is awesome.

I wonder about the Wagabond. I think people still build those? What happened to that IP?
 
Mikey52 said:
Wasn't wag aero a family run business. Maybe the owners were ready to retire and the kids didn't want the headache.
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That was going to be my guess. Seems like a lot of boomer-built businesses were either 1) had no heirs interested in taking over the business, or 2) the business was the owner's retirement plan and necessitated selling it at some point. It's always nice to see a business sold to the employees but that rarely seems to work without the former owner gifting the employees some very favorable financing terms.
 
RyanB said:
I haven’t found them to be terribly higher than most other vendors. YMMV.
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That’s the result of a monopoly. The lower competitors are driven from the market. 20 years ago you could find vendors lower than Spruce.
 
As many times as I've probably flown over it, I've never actually looked for their airport.

I have bought a few things from them over the years. Really nice people to deal with.
 
Clip4 said:
That’s the result of a monopoly. The lower competitors are driven from the market. 20 years ago you could find vendors lower than Spruce.
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The aviation market is small. “Lower competitors” were operating on a very small margin, hence why many went away.

Most of those smaller competitors were catalogue sales and were slow to adapt to online, whereas AS, WagAero and Univair moved into almost exclusive internet sales.
 
The owners of Wag Aero also owned Leading edge Airfoils, a Rotax service center. The owners of Aerosport at 10c announced earlier this week they had bought LEAF. So it really sounds like the folks at wag aero wanted to retire and not a hostile takeover by ACS.

Leading Edge Air Foils Sold To Advanced Powerplant Solutions | Aero-News Network

Named New ROTAX independent Service Centre for Central USA After dealing with a big letdown after the unexpected decision by Skyreach to discon| Published: Thu, May 02, 2024 | Aero-News Network
www.aero-news.net
 
StraightnLevel said:
We already have it, as a result of double taxation of corporate earnings.

Do the tax math on corporate earnings that are paid out as dividends. Start with non-qualifed dividends.
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Now we just need to fix the capital gains mess that allows billionaires to pay a lower percent in taxes than their low level employees.
 
Kristin said:
Now we just need to fix the capital gains mess that allows billionaires to pay a lower percent in taxes than their low level employees.
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How does that work (I'm not a billionaire)?
 
Kristin said:
Now we just need to fix the capital gains mess that allows billionaires to pay a lower percent in taxes than their low level employees.
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If a "billionaire" gets a million in capital gains for the year. They'll pay 0% on the first $50k, 15% up to $500k and 20% on the rest. That works out to about 16.7%.

You don't say what your definition of a "low level employee is, but someone making $100k will pay 0% on the first $11k, 12% up to $45k, 22% up to $95k and 24% on the rest. That works out to about 16.2%.

So tell me again how that billionaire pays a lower percent in taxes?
 
frfly172 said:
You know prices won’t go down.
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Then, @ least once upon a time, that’s when a new entiy would jump in the game. Reminds me of the speech Jeff Bezos made, ‘I predict one day Amazon will fail, Amazon will go bankrupt.” It’s the nature of business to grow admin, which rarely contributes to the profit margin.
 
donjohnston said:
If a "billionaire" gets a million in capital gains for the year. They'll pay 0% on the first $50k, 15% up to $500k and 20% on the rest. That works out to about 16.7%.
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Now, add the 3.8% Obamacare surtax and the 3.8% NIIT surtax - surtaxes that everone over $250k gets hit with. That's 24.3% - a rate higher than the average for any income group in the bottom 99%.

The canard about high incomes paying lower tax rates needs to be beaten down with extreme prejudice every single place this lie is re-stated.
 
donjohnston said:
If a "billionaire" gets a million in capital gains for the year. They'll pay 0% on the first $50k, 15% up to $500k and 20% on the rest. That works out to about 16.7%.
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I don’t think that’s right. I don’t think Capital Gains taxes are based on “marginal” tax rates as is income.

From the IRS:

“A capital gains rate of 0% applies if your taxable income is less than or equal to:
  • $44,625 for single and married filing separately;
  • $89,250 for married filing jointly and qualifying surviving spouse; and
  • $59,750 for head of household.
A capital gains rate of 15% applies if your taxable income is:
  • more than $44,625 but less than or equal to $492,300 for single;
  • more than $44,625 but less than or equal to $276,900 for married filing separately;
  • more than $89,250 but less than or equal to $553,850 for married filing jointly and qualifying surviving spouse; and
  • more than $59,750 but less than or equal to $523,050 for head of household.
However, a capital gains rate of 20% applies to the extent that your taxable income exceeds the thresholds set for the 15% capital gain rate.”

So, I’m pretty sure a billionaire pays 20% across all their capital Gains.
 
FastEddieB said:
I don’t think that’s right. I don’t think Capital Gains taxes are based on “marginal” tax rates as is income.

From the IRS:

“A capital gains rate of 0% applies if your taxable income is less than or equal to:
  • $44,625 for single and married filing separately;
  • $89,250 for married filing jointly and qualifying surviving spouse; and
  • $59,750 for head of household.
A capital gains rate of 15% applies if your taxable income is:
  • more than $44,625 but less than or equal to $492,300 for single;
  • more than $44,625 but less than or equal to $276,900 for married filing separately;
  • more than $89,250 but less than or equal to $553,850 for married filing jointly and qualifying surviving spouse; and
  • more than $59,750 but less than or equal to $523,050 for head of household.
However, a capital gains rate of 20% applies to the extent that your taxable income exceeds the thresholds set for the 15% capital gain rate.”

So, I’m pretty sure a billionaire pays 20% across all their capital Gains.
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You're probably right. I suck at understanding tax codes.
 
well, the marginal utility of the last dollar taxed between two homo sapiens amassing wildly disparate incomes is also not imagined or a "canard". You could tax them flat and it would still be regressive for the homo sapiens closest to the cost of subsistence line (Maslow), in ways that are much more than academic.

Problem is that since the usual suspects often couch that quantitative disparity under mythologies of meritocracy, they don't really care to legitimately acknowledge or debate the material outcomes behind said marginal utility.

And before they come at me with the C word, I'm not advocating any specific distributive policy by stating the above. I'm just perennially curious about the social psychology that yields a rentier-class millionaire needing lower/upper middle class white knights in the first place.... Don't answer that I'm being rhetorical.
 
donjohnston said:
You're probably right. I suck at understanding tax codes.
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Most people do - it's quite complex, and many of the surtaxes are unknown to people in the lower income ranges.

This is partially why there is so much false propaganda circulating that far too many people believe.
 
hindsight2020 said:
. I'm just perennially curious about the social psychology that yields a rentier-class millionaire needing lower/upper middle class white knights in the first place....
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How about we start with being honest and accurate in public statements?

You don't need to defend other people, but it is reasonable to stand up against media falsehoods and blatant propaganda.
 
FastEddieB said:
I don’t think that’s right. I don’t think Capital Gains taxes are based on “marginal” tax rates as is income.

From the IRS:

“A capital gains rate of 0% applies if your taxable income is less than or equal to:
  • $44,625 for single and married filing separately;
  • $89,250 for married filing jointly and qualifying surviving spouse; and
  • $59,750 for head of household.
A capital gains rate of 15% applies if your taxable income is:
  • more than $44,625 but less than or equal to $492,300 for single;
  • more than $44,625 but less than or equal to $276,900 for married filing separately;
  • more than $89,250 but less than or equal to $553,850 for married filing jointly and qualifying surviving spouse; and
  • more than $59,750 but less than or equal to $523,050 for head of household.
However, a capital gains rate of 20% applies to the extent that your taxable income exceeds the thresholds set for the 15% capital gain rate.”

So, I’m pretty sure a billionaire pays 20% across all their capital Gains.
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It's more like 27.6% when the aforementioned surtaxes are added. That said, the 20% rate is only applied above the $492,300 cutoff; the Obamacare and NIIT surtaxes are applied above $200/250k (single/MFJ).
 
FastEddieB said:
So many of the things I might have purchased from Wag Aero or Aircraft Spruce I would now just order from Amazon. Same for bike stuff - I used to order from Bike Nashbar or Specialized on a regular basis, but haven’t in ages. Amazon has better selection, lower prices, quick delivery and painless returns if necessary.

Must be rough times for both brick-and-mortar stores and specialty online retailers.
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**** Amazon with a rusty chainsaw. Until very recently I was a prime member and ordered lots of stuff from them.

A week ago I received a notice of suspicious charges from my bank. I compared my purchases over the past 90 days to my credit card statement and sure enough there were several charges.
I had read that Amazon credit card security was crap, so I have only listed a sight l single credit card with a$500 limit on my account.

When I called Amazon they said they could see another Amazon account holder charging to my card. When I asked who that was they said "I'm sorry, but to protect the privacy of that individual, we can't provide that information".

B-bye a** holes. Account closed.
 
Our need for same day shipping and reluctance to leave the house has killed more than a few smaller players in pretty much anything. How many brick and mortars has Amazon single handedly killed?

As far as the tax system... I'd be OK with a flat tax just to stop debates like this
 
StraightnLevel said:
This is simply not true. Peruse the IRS data at their website.
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My mistake. I am not up on the new math. When I went to school, 37% (highest income tax bracket) was higher percentage than 20% (highest long term capital gains tax). When did they change that, anyway?
 
donjohnston said:
If a "billionaire" gets a million in capital gains for the year. They'll pay 0% on the first $50k, 15% up to $500k and 20% on the rest. That works out to about 16.7%.

You don't say what your definition of a "low level employee is, but someone making $100k will pay 0% on the first $11k, 12% up to $45k, 22% up to $95k and 24% on the rest. That works out to about 16.2%.

So tell me again how that billionaire pays a lower percent in taxes?
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Take the struggling working class out of it and look at the actual middle class making $100K-$500K and re-run your numbers.
 
Kristin said:
My mistake. I am not up on the new math. When I went to school, 37% (highest income tax bracket) was higher percentage than 20% (highest long term capital gains tax). When did they change that, anyway?
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That 37% bracket starts at what income level, again? You are comparing 1% income rates with other 1% income rates, and leaving out the surtaxes and double-taxation that capital gains and dividends get hit with. Anyone paying 20% capital gains is also paying an additional 7.6% in Obamacare and NIIT surtaxes; for non-qualified dividends and short-term capital gains the total federal tax rate is 44.8%.

FWIW, I pay that 37% on much of my income, plus the 3.8% Obamacare surtax, plus the NIIT surtax on part of my income, plus the double-taxation on corporate earnings and dividends. Do you pay those rates?
 
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Kristin said:
Take the struggling working class out of it and look at the actual middle class making $100K-$500K and re-run your numbers.
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If you have to resort to calling $500K “middle class”, well, I think that your argument has fallen apart in shreds. [Single-income top 1% cutoff was $403K for 2023.]

Your original statement was:

Now we just need to fix the capital gains mess that allows billionaires to pay a lower percent in taxes than their low level employees.

So, now you want to call a $500K executive, lawyer or doctor a “low level employee”?

:lol:
 
Kristin said:
My mistake. I am not up on the new math. When I went to school, 37% (highest income tax bracket) was higher percentage than 20% (highest long term capital gains tax). When did they change that, anyway?
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Still looking for an explanation. If the capital gain is due to inflation, say 20% over the last three years, the billionaire needs to pay 20% of that in taxes? :confused:
 
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