US taxes hurt entrepreneurs
- added October 12, 2007
- 5 responses
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- cwhite
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33% taxes for a worker bee, 50% taxes for the self-employed.
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Wow, didnt know this. No incentive at all.
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that info is just wrong. You fail to factor in that you're talking about two things: one is income and one is business taxes. There is no such thing as a 50% business tax.
First off...All businesses are required to pay taxes on all kinds of things like equipment, payroll, insurance, etc...and you didn't mention that there are numerous tax breaks built into the systems of most states that allows businesses to write off and get refunds on taxes they may have to pay over the course of the year.
The "tax rate" that I think you're thinking of is the tax on capital gains or profits, which is generally between 3 and 10 percent depending on the state. Beyond that there are so many loopholes and tax shelter laws that businesses generally don't pay anywhere NEAR the percentages of taxes that individuals do.
You can't compare the two and to say that income tax discourages entrepreneurs makes no sense. -
his numbers are fuzzy, but the principal I believe is dead on. People are taught if you start a business write off everything you can, but if you write off so much that you're in the red three years in a row the government decides you're not a business you have a hobby. Why can't we just drop the income tax all together and replace it with a national sales tax. Oh that's right, Al Capone didn't get sent to jail for being a murderer, he got sent to jail for tax fraud.
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I think that if you are found in this situation, hiring an accountant will solve a lot of problems.
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Nimby,
I couldn't agree more. Hiring an accountant has helped me tremendously. The cost of the accountant is far, FAR outweighed by the amount of money the accountant saved me with his knowledge of the tax laws. And mine is completely above board. I can only imagine if you had a shifty accountant what could be saved up front, but it's not worth the worry of auditing to me. I prefer to be on the level.
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