If you are self employed, you have gross income of X, you have expenses of Y and the net is Z. Z is what you are taxed upon...
Being self-employed, you want as little Z as you possibly can...being self employed, you want to earn, net, as little as possible...
How come? Because what you do helps other people, and the more you invest in helping other people, the less net you earn, and the less taxes you pay.
What you do not spend in business gets taxed...at what 30%?
What you spend, and is therefore taken from the net profit, and is not taxed, gets spread around to other businesses, which helps them also.
And given your product relates to your life, all you can legitimately spend money which is a business expense necessarily also promotes your own lifestyle.
If you net near zero, by spending all of the income on things to support your lifestyle, then the business is most efficient... you are doing the most good you possibly can.
The measure you have a net profit is the measure you are declining to help others, the measure you are greedy.
Taxes are your punishment for being too greedy to spread your net income around... the crony capitalists pay no taxes anyway, so they will not object when the communists in the USCongress raise the taxes to 90% on business, to curb the greed.
Feel free to forward this by email to three of your friends.
1 comments:
This is a good and enlightening blogpost and a good way to think of taxes. Who is better at deciding how to use your earnings and "allocate your resources": you or the government?
The next time I do my taxes, and I'm still owing taxes, I will just spend more on things that I can use for my self-employed business, and even a related college course next time. Your going to be parting with this money anyway, just use additional money on something useful to you and your business.
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