Here Come 70% Taxes

I've been arguing the tax rate must reach 95%, to preserve the capitalist system, and a Stanford econ prof pegs it at 70%, coming soon...


I think we have a problem, among others, with ratio of small business to big biz way out of whack.


To small business, it does not much matter what the tax rate is, it is the regulations that are the business killer.  People misunderstand this. If people miss the motivation of others successful in business, then they are unlikely to succeed themselves.

All religions point out that it is not what we have or think that makes us unhappy or happy, it is what we do.  Those who thrive in small business are focussed on what they do, the sum total of which is lifestyle.  What they have is not the ends, just the means to the ends.

What is beaten into us is "make money..." likely so you can pay taxes.  In any event, when the question is "what can I make?" (or worse, "what do you make?") the the premise is faulty and one is off down the wrong track.  The right questions is "what do I want to do?" not in the sense of "how to make money" but in the sense of "spend my life?"

After that, come all the practical reasons why it is not about money, etc, why entrepreneurs do not want profit.  In fact what profits entrepreneurs do have is normally complimenting bankers expectations, Robert Morris and Assoc guide of key biz rations, and demonstrating you perform within norms, so they can lend and govt can tax.

Of course businesses do not pay taxes, only the ultimate consumer pays all of the taxes assessed anywhere along the line.  In fact it is impossible for a business to pay taxes. (If someone goes out of business, and does not sell his inventory, then he in fact is the ultimate consumer.)  Profits, consumed as income, are taxed, so the entrepreneur wants as little profit as possible.  A $90,000 company car is bought with pre-tax dollars, not to mention the depreciation allowed on a company car.  To personally own such a car, an owner would have to take a profit of some $129,000 to buy a $90,000 car.  With 30% federal tax the $129,000 is reduced to $99,000, and 10% sales tax on the $90,000 purchase takes the $99,000 left.  That state sales tax is likely there in either scenario, but it is easier for a business to establish itself in a non-sales tax state than an individual. 

So the question "what can I make?" or "what do you make?" traps a person in an alternate universe, where you are safer as an employee.

Bookmark this post --- Email this post