Jumpstart the economy - tax free small busiiness

[Mike O]

Having now set up two small businesses, i feel the pain this gentleman talks about. He hits the nail on the head...

How to jump start the economy - Tax Free Small Business

 

If we really want to stimulate job creation in this country, take the same approach to small business with 25 or fewer employees that we take to Internet taxes. Outlaw them.

 

No taxes of any kind on small businesses with 25 or fewer employees. No employer payroll tax. No state or local taxes. No taxes on earnings. Nada. The business owners will pay income taxes on their personal income they pay themselves, but not corporate earnings

 

The amount of money I paid for legal fees, CPA's, and requisite regulation paperwork filing, etc. was a constant distraction from our revenue producing work. And with the laws and regulations constantly changing, there were ongoing alterations to operating expenditures. I spent 80% of my time at the beginning setting this all up, and an ongoing 15-20% keeping an eye on it (or paying someone else to). All it did was take away from our bottom line (but I'm sure it made the CPA's and lawyers happy)

 

Mike O

[Lawman]

Won't happen for the same reason the IRS tax code continues to be so complicated..

[Matts_12GS]

Too bad though...

 

I would like to see the congress subjected to their own laws, so that each representative and senator would see that their congressional and district offices would need to be run with the same degree of oversight and responsibility/hassle that small businesses have.

[Whip]

Too bad though...

 

I would like to see the congress subjected to their own laws, so that each representative and senator would see that their congressional and district offices would need to be run with the same degree of oversight and responsibility/hassle that small businesses have.

 

 

George McGovern....

 

 

"I also wish that during the years I was in public office I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender."

 

"despite bankruptcy, we are still dealing with litigation from individuals who fell in or near our restaurant. Despite those injuries, not every misstep is the fault of someone else. Not every such incident should be viewed as a lawsuit instead of an unfortunate accident."

 

 

http://findarticles.com/p/articles/mi_m3190/is_n38_v26/ai_12685435

[Mike O]

"despite bankruptcy, we are still dealing with litigation from individuals who fell in or near our restaurant. Despite those injuries, not every misstep is the fault of someone else. Not every such incident should be viewed as a lawsuit instead of an unfortunate accident."1

I don't follow the purpose of this second quote.

 

Mike O

[Joel]

From the blog:

 

The only taxes they would collect and remit are sales taxes, the employee's portion of payroll taxes and of course they would still file personal income taxes on their individual earnings.

 

Methinks the billionaire Mr. Cuban (who I generally find to be refreshing) is disingenuous on this point. As if accounting for payroll taxes and personal income tax is dead simple. Substitute property tax for sales tax (legal services aren't subject to sales tax), and that's about all my law firm of fewer than 25 employees faces in terms of a tax burden. Same would be true for other tax pass-through entities (partnerships, LLCs, S corporations). Even that still generates enough work to justify a part-time accountant/bookkeeper, and requires regular management attention. I'm glad not to face a greater burden, but I don't exactly feel incented to create another dozen or so jobs to creep up to the 25 employee limit.

 

[Whip]

After George M. left politics he went into bidness for himself. Some of the laws he supported and helped pass were being used against him.

 

It goes back to your original post about how many hoops they makes us jump through just to stay in bidness without ever having to experience the result of their actions. Then when they do try it for themselves they realize how hard they've made it.

 

I think the link tells the whole story......from 1991.

 

Sorry if I missed the meaning of your post.

 

Whip

 

 

 

 

 

[Mike O]

After George M. left politics he went into bidness for himself. Some of the laws he supported and helped pass were being used against him.

Now I understand. Thanks...

 

And no, you didn't miss mine (or the author's) point. That is, if staring and maintaining a small (<25 person) business were as regulation-free (as e-business is) far more folks might get past the month-to-month expense (and complications) associated with a traditional (non e-business) venture.

 

Mike O

[Mike O]

Hey Joel,

 

I was hoping you'd chime in here. While your points are well taken, the focus is on the post start-up aspect of the business (payroll and flow-through taxes). From my experience (arguably limited to 2 startups), staring a business is the same whether you have aspirations to be a BILLION dollar 10,000 employee entity or a hundred thousand dollar venture. The S-corp while attractive to small business that are structured so that stockholders accept the profit flow through as personal gains, is nothing more than a IRS tax designation. In the beginning, the steps required to form the business (incorporation, charter, shareholders agreements etc.) are NO different for the BILLION dollar business than the $10 business. Creating that 'corporate shield' is a costly part of business startup that frightens a LOT of potential small business start ups. And the subsequent regulations (and tax responsibility) don't come for free either.

 

I gave a talk to local entrepreneurs about my experiences, and they were a bit taken back about the work required to get a legal business entity established. I wasn't at all surprised.

 

Mike O

[chrisolson]

Well, that's all very interesting ... but I don't see how such a change to make it buracratically easier to start a business suddenly grows the gene pool of entrepreneurs. The plain fact is there aren't a lot of people who are not now business persons who have a clue on what it really takes. Because we're not taking "hobby business" here. I think that << successfull >> small business owners are problem solvers of the first order ... paperwork is just something else to solve.

 

I just find it hard to believe there a significant number of people who've been waiting for the paperwok hassle to decline who also have a sellable idea or a product or service that might succeed. And more importantly, who have access to a fair amount of initial capital or credit to operate during start up especially if your talking non-internet, brick and mortar businesss that could employ up to 25 folks ... or even 4 or 5.

 

Seems more like a profit builder for << existing >> small business persons who've already gone through the hassle ... not that its a bad thing, just smoke and mirors ...

 

[Whip]

Well, that's all very interesting ... but I don't see how such a change to make it buracratically easier to start a business suddenly grows the gene pool of entrepreneurs. The plain fact is there aren't a lot of people who are not now business persons who have a clue on what it really takes. Because we're not taking "hobby business" here. I think that << successfull >> small business owners are problem solvers of the first order ... paperwork is just something else to solve.

 

I just find it hard to believe there a significant number of people who've been waiting for the paperwok hassle to decline who also have a sellable idea or a product or service that might succeed. And more importantly, who have access to a fair amount of initial capital or credit to operate during start up especially if your talking non-internet, brick and mortar businesss that could employ up to 25 folks ... or even 4 or 5.

 

Seems more like a profit builder for << existing >> small business persons who've already gone through the hassle ... not that its a bad thing, just smoke and mirors ...

 

 

 

What about the guy that's already in bidness for himself, has another "great idea", but is so tired of the BS he would rather just go fishin and live in a trailer the rest of his life????

 

Not sayin I know that guy, but he lives very close to me.

 

 

 

Whip

 

 

[Joel]

That's where I think Cuban misses the point. His suggestion isn't really tax free, and even if it were, it would eliminate only part of the hassle a startup faces.

 

OTOH, after advising small businesses for nearly 20 years, and without suggesting that the hurdles facing a startup are justifiable barriers to entry, I'm leery of the chances for sustainable business success for a company that can't surmount them. The commitments of capital and other resources are significant, but in order of magnitude they are nowhere near the levels of commitment needed to make a business thrive.

[Whip]

That's where I think Cuban misses the point. His suggestion isn't really tax free, and even if it were, it would eliminate only part of the hassle a startup faces.

 

OTOH, after advising small businesses for nearly 20 years, and without suggesting that the hurdles facing a startup are justifiable barriers to entry, I'm leery of the chances for sustainable business success for a company that can't surmount them. The commitments of capital and other resources are significant, but in order of magnitude they are nowhere near the levels of commitment needed to make a business thrive.

 

 

 

.

 

 

I hate the voice of reason.......that's why I ride a motorcycle.

 

 

 

 

 

[chrisolson]

From the article .... "Make this available only to individuals, and only for a single company (to prevent gaming the system by having multiple 25 employee and under companies)"

 

Anyway, if its too much of a hassle, tell that neighbor of yours it must not have been a very good business idea - i.e. not very profitable - if that scared him off

[Whip]

From the article .... "Make this available only to individuals, and only for a single company (to prevent gaming the system by having multiple 25 employee and under companies)"

 

Anyway, if its too much of a hassle, tell that neighbor of yours it must not have been a very good business idea - i.e. not very profitable - if that scared him off

 

 

 

That's too bad, cause he was gonna hire you for a lot of money:cry:....(after you retire)

 

 

 

 

 

[chrisolson]

I can handle the paperwork ...

[dewtwo]

Tax burden on corporations regardless of size is huge, and the clowns in Washington want us all to think that getting the corporations (large and small) to pay more will make everything better. Actually, they only talk about the large corporations, but they WILL include everyone.

 

Let's think about this for a moment.

 

Let's assume I have a company and I employ 10 people (I am not sure, but is that the magic number where you have to start all the payroll taxes?). Anyways, that is not material. I need 10 people to produce widgets. Based of my exceptional cost analysis (I am quite anal this way), I can only pay out $15 an hour. But wait, I have to pay SSI, workman's comp, and any benefits I wish to give to them. Now, when I was in management, I just cut 40% right off the top of my max salary to cover these items (granted benefits were a positive). So now, I interview Beau (favorite southern name); he is fabulous, but I can only offer him $9 an hour. How much better would Beau be if the government didn't take so much of his money either.

 

Let's also not forget the corporations are taxed fairly heavily (small and big). A corporation is nothing more than an entity to pass the cost of the tax onto the consumer. Everything you buy costs about 22 to 25% higher than it should because of "embedded" taxes. That $125 tire you need to replace, well at least $27 of the cost of that tire is going to some government entity, and those does NOT include the sales tax you are going to pay. Want to know why the Irish economy is growing so fast? They have one of the lowest corporate tax in the world.

 

I could go on and on, but then I would just be rambling... Here is my preferred taxing method: Fair Tax

 

[Francois_Dumas]

 

Not sayin I know that guy, but he lives very close to me.

 

 

 

Whip

 

 

That's strange..... he must have a brother then.......

[Matts_12GS]

That's strange..... he must have a brother then.......

 

And a cousin in Miami...

 

And Jacksonville.