Small businesses create a large effect on the U.S. economy. Over 5 million strong, they account for 89% of all U.S. employers and employ over 20 million people. One business owner stated that “A simpler, fairer, and growth-oriented tax code will ease the compliance burden on the small business owner”.
Tax regulations create the most difficulty for small businesses. The time and money associated with tax compliance is astronomical. The burden of record keeping takes time and their taxes are usually done by a tax accountant at great expense to the businesses. Since time is money and tax accountants also take money, these expenses are passed on to the consumer in the form of higher prices.
Most small businesses pay taxes via the individual income tax. The business income from sole proprietorships, S corporations and LLC’s is all taxed at the owners’ individual income tax rate. Research suggests that across-the-board tax cuts, regardless of income level, would increase entrepreneurial start-up and survival.
The FairTax plan would replace all of the taxes that businesses have to collect and pay to the Federal Government with a national sales tax which would also be collected by businesses. The big difference is the businesses would only have to collect one tax, at the retail level, and send it to the state, which would in turn send it to the Feds. Their record keeping would be reduced to just one tax (the sales tax) to be collected and their only record keeping would be to total their sales receipts for the month and pay the percentage of tax indicated. Much easier than the system in place now, and they get paid to collect this tax.
I will be spending more than one day one this subject of businesses and the FairTax. It is a very important part of understanding the sales tax and takes more than one day to cover it all.
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3 comments:
I personally like a fairtax solution but I don't think it will ever be implemented. The income tax code is far to powerful tool to regulate behavior of businesses and individuals. If you look at all the different deductions that are in the code as the legislature trying to incentivize certain actions you'll realize that no government is willing go to give up that power. A single, Fairtax will never give the legislature the same precision to tell businesses/individuals how to spend their money for "tax savings."
Never say never, Kevin. We need people like you to join our grassroots effort to make ourselves heard by the politicians who want to retain such power over us. Only if we get the majority of the people insisting on implementing the FairTax, will we begin to see results. This is America and it is supposed to be run by the people and for the people. I think we can make a difference. Start voting against every politician who is not in favor of the FairTax and eventually we we get enough politicians who believe as we do and are willing to give us back something that has been taken from us in the form of every rising taxes.
Go to www.fairtax.org and sign the petition in favor of the FairTax. That shows the politicians how many people are on the FairTax bandwagon.
You can make a difference. Thanks for reading my blog. More about the business part of the FairTax today.
Bobbie
Where is the outrage over sky-high taxes, regulatory costs?
by Steve Higgins
7/15/07 - New Haven (CT) Register
"Reports last week from two nonprofit groups should serve as a wake-up call to Americans to start agitating for tax reform . . .
"On Monday, the Competitive Enterprise Institute reported that the cost to consumers of complying with federal regulations exceeded $1 trillion in 2006 . . . almost 10 percent of the nation's gross domestic product. It's nearly half the amount of government spending.
"Even more worrisome, the cost of complying with these multitudinous regulations exceeds the amount of individual income tax paid in 2006, about $998 billion, as well as corporate incomes taxes of $277 billion.
"According to the Washington, DC-based advocacy group [ Americans for Tax Reform ], the average American had to work through July 11 this year just to pay all federal, state and local taxes, as well as regulatory costs including workers' compensation and unemployment benefits.
"Congress should take one of two paths: Either cut tax rates and government spending drastically, or adopt the FairTax, an innovative proposal that would involve abolishing the Internal Revenue Service and its income tax and replacing it with a simple national sales tax."
--(End excerpts)--
. . . The U.S. income tax system and the U.S. economy are inter-related, and are in DIRE trouble. If we, the citizens of these United States, do not act aggressively to spread the FairTax plan with family, friends and associates - our "nest eggs" stand to be devastated through a coming economic meltdown (Summary with podcast: "Laurence J. Kotlikoff on Long-Term Fiscal Problems in the U.S.").
Politicians are putting demogoguery and pandering above responsible governing - and they're able to do it because Americans do NOT understand - at the "get go" - politicians' / bankers' hunger for ever-increasing shares of the working person's bi-weekly paycheck; Americans do NOT understand the totality of taxes they pay. The FairTax shines the "light of day" on this, putting citizens back in charge to forcefully demand spending reductons.
YOU AND I MUST ACT to mobilize public opinion, and get the FairTax enacted, because the signs point to a probable devaluation of the dollar (reissuance of an "Amero" ? - under a U.S.-sovereignty-busting North American Union ?).
[ NOTE: Does this help clarify your understanding of what's going on globally? a) Bush's persistence on rewarding illegal immigration? b) the North American Highway now under construction in Texas (to stream cheap labor into the covertly-planned North American Union marketplace designed to compete with 21st-century China market? c) the gradual increase in value of the Chinese yuan by China corresponding to China's economic growth? (This will result in the dumping of dollar-denominated debt as its manufacturing economy grows stronger - which guarantees devaluing and ushering-in of the Amero.) ]
Keep in mind, this NAU strategy - supported by the "super-rich" (member-owners of the Fed) - together with their politician buddies who want NOTHING to do with FairTax - runs contrary to simply making the U.S. a "tax free zone" for business under the FairTax. Politicians and bankers lose power when the U.S. is returned to a "savings-driven economy" from a "debt/interest-driven" economy).
Powerful "elites," members of political and monied-interest "clubs" reaching into the halls of power in Washington, depend on keeping you and me uninformed of their plans. It is up to YOU and ME to ACT - and not live in a state of denial - based on what we now know is clearly happening to our financial futures.
After you consult the Kotlikoff interview (above):
• (If you're a member of your State FairTax organization) Contact your state or local FairTax Director to learn what you can do.
• (If you're just learning about the FairTax bill) Join FairTax.org here: Scrap The CODE, NOW !
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