I have run a small business for over 15 years and witnessed the ever increasing demands placed on the private business from all levels.  It amazes me how few people understand the tax burden placed on a private company.  Mathematically it is impossible to start a small business today and become successful, the costs are too high.  Every taxpayer has gripes about their liability and rightly so, but mere income taxes are a summer breeze compared to what a small business must contribute.  And for what?  The business man has become the beast of burden who carry the elected official’s agenda, paying the whole way and assuming all the responsibility.  What is the government response to the business man for creating a viable economy - more taxes.

The real business world does not operate like the bank & auto bailout, if a business fails the owner walks away broke.  In fact when this happens the IRS does not remove its grasp, in contrast to popular thought the IRS imposes extraordinary fines for noncompliance even in the event of a catastrophe, and with the vigor only a government funded organization seems to posses.  It is a confusing and inefficient system which would never exist in the private market and the end result is all but debtors prison.

How is a business taxed today?
The tax work alone requires hired help, realize you are paying professional wages for someone to systematically funnel all of your profits into an indiscernible paper maze and the American dream begins to become clearer.  Every completed tax form is submitted with a large check.  In addition to personal income taxes the business must pay federal taxes on business profit.  All profit is taxed no matter where it lies, nothing is safe from the almighty IRS.  Next a business license is required from the municipality or the business is shut down.  The business license keeps the local police away, that’s it.  Once you file it the county has record of you and begins to tax your business entity in regard to how much money you make.  This is one guy operating a one man business.

Business taxes:
Federal tax on business income
State tax on business income
State sales tax and now food, gas and luxury tax
County business tax on business entity prorated on business income, this includes tax on a small service business (the more you make the more they take)
*Local tax, cost of a business license also prorated on business income

Property Taxes:
State property tax on Vehicles
State property tax on Real Estate (if you rent you are still paying this)

Employment taxes:
Quarterly withholding  -  The worst atrocity I faced was this tax scenario.  If you listen to the news and have heard, “Medicade is the 800 pound gorilla in the room,”  here it is.   This is where that money comes from.  Gouging the business man will not pay this.  The money was originally allocated toward wages, for you the employee, not someone elses medical procedure.  How many people work and have no health coverage?  The reason is your wages are reduced in order to pay for someone elses medical problems.  God help the working man.

Personal Taxes:
30 % Income tax (have you read how this became a law?)

Notice the * asterisk.  This is where the whole cycle begins as filling out a business license form is necessary to get a bank account which is required to properly tax you.  After filling out this form you will receive paperwork from local and county agencies every year demanding a slice of your income, fail to pay and they shut you down.  If your profession requires a state certification this generally hinges on some type of insurance which, like auto, is required by law and further increases the price of doing business.  With out a current certified copy of insurance required by a state regulating agency your business will be shut down.  It is a collage of self sustaining laws and tax forms which coupled with insurance demands leave the business owner penny less. 

Here is where things get interesting.  As an employer federal law requires a W-4 for every employee with an identification number sourcing him or her to a bank account.  This is another 15-20% of every wage dollar (this is a lot of money) of private company profit diverted to the Federal Government.  This money could help the business grow, increase wages and ultimately employ more people.  Federal tax collecting practices focus on wage payments a business makes via banking records and vehemently enforce these tax 'laws'.  Withholding laws imposed on the business owner by the Federal and State governments are medieval and must be dealt with before this country can hope to recover.  Today the IRS mitigates personal income tax issues while Federal withholding tax is simply not forgiven or mitigated in any way, I have found only seasoned tax attorneys know this.  If you employ others you are working hard to pay the social security and medicade agenda.  This is paid in addition to income taxes and yes the employee is paid less because of it.  Medicaid, Social Security and Unemployment all are retrieved from your paycheck, the business owner is forced into compliance.  These three government programs were destined to break the American economy 30 years ago and have somehow gone uncorrected to this day.  They are all economically unfeasible, are upside down in funds, and/ or pyramid schemes.

In my opinion a gross misallocation of resources paid for by the willing and able.  To think someone expects me to act patriotic about giving all my company profits to these organizations is ludicrous.  It is bloodletting and if you read this far realize these agencies will crack and will challenge our beliefs and our ability to care for  …  well those who don’t work.

My problem was I felt my employees deserved this money more than wherever is was going.  I was mandated to pay exorbitant withholding taxes and this money was simply sent from our locality to a bottomless vacuum called the U.S Treasury.  I no longer have any employees, they cost way too much.

In summation the effort necessary to satisfy these tax demands and the manner in which they are imposed is primitive and unjust.  The outcome is that the working class suffers and will continue to do so.  The amount of people led to believe they are entitled to government handouts are incalculable.  An adjustment in the system will not suffice; it has to be re designed, it has to be re engineered.  Do something, signing a petition is worthless childs play.  Do something before it is too late America.

A summary by a small business owner
Monday February 22, 2010

If you don't do anything no one will. No one is going to solve this problem, the generation in charge does not care about you. Let's re engineer a country that is fair and impartial to all. This is not a joke, the right minds in the right place can accomplish what the baby boomers did not.

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Here are my articles detailing what is wrong today. Please read them and respond.