Some text here… a bit here, and voila! A blog post.
I have a few thoughts on the election. I don’t want to go into too much detail, but I’m not particularly pleased with the outcome (though not surprised). I don’t feel like we accomplished much as a country in the last four years. Obviously I don’t put the blame completely on our president, but I think he shares some of the responsibility.
What really worries me for the time being are taxes. I don’t mind if the Bush-era tax cuts expire, or if some deductions are eliminated here and there, but I do mind a tax increase. President Obama has made it clear that he intends to raise taxes on the rich. Maybe that, in and of itself, isn’t a bad idea. But to Mr. Obama I look like a very wealthy citizen instead of a business. My company is a pass though S-corp which mean that on paper my income is the same as my company’s income. So, to clarify further, on paper I appear very wealthy.
I’m already in the highest tax bracket. Paying more taxes would simply hurt my company’s ability to grow. If we don’t grow then we don’t employ. It is the small businesses that drive the US economy. I feel like treating small business income like personal income is a mistake. In the next year I expect to pay nearly $100,000 of additional taxes. That’s money I could have used to increase inventory, expand, add employees or stimulate the economy.
I also worry about health care issues. This coming year companies with over fifty employees will be required to provide health care coverage to their full time employees. We already do this and it’s very expensive. Premiums keep rising. I worry that a mandatory health care program will drive prices up even more and eventually become a financial liability for us.
In the meantime many companies are hard at work cutting hours of full time employees so that they don’t have to provide insurance coverage to them. The net effect is that many of these workers end up with less money and they will now be required to purchase their own heath care (that’s a double whammy). Sometimes I feel like the laws that have been created to help have unintended harmful consequences.
Sure, I’m oversimplifying some things and the thoughts I’m sharing are comprised of a limited issue scope, but my point is that I’m worried. When a county reaches the point where the takers outnumber the givers there is an unsettling imbalance and the future seems bleak.
A quick update on Fran’s foot (toe, technically): The healing is going slower that we had hoped. Apparently all the walking around she was doing made exacerbated the wound’s bad mood. No more walking! On Wednesday we finally picked up some crutches. Thanks to those of you who have wished her well and sent money (which is, of course, appropriate in this situation).
“But he has two sports cars! Surly he can pay more taxes!” You know what? If I really thought the government would take additional tax revenue and use it to to pay down the deficit then I might not feel so unhappy.
Maybe this is a dumb question, but isn’t there some other structure for your business that would separate it from your personal income?
Sure, I could become a corporation. But a “real” corporation (“C corporation”) is recognized as a separate taxpaying entity. Although I would be completely separate from the company I would literally pay tax twice. The S-Corp, which is how we are currently organized, is the most tax advantageous strategy. Unfortunately it – like the a sole proprietorship or LLC – results in my income being linked to the business profit. And I am certainly not alone in this problem.
I took the time to do some reading so I could better understand the different kinds of companies that exist, and really, it seems a major problem — I’m not a business owner, and you are, so you’ve already done the research and come to the same conclusion I’m already seeing forming in my head after trying to understand even the simplest explanations. Basically, you’ve wound up in a case of mistaken identity which is just a significant oversight on the behalf of business structure en masse. Like you said, being a corporation doesn’t solve the problem, and the S pass-through distinction maybe benefits you if you have a lot of shareholders, but when you’re still riding the line of being small business, the adage of “corporations are people” takes on something of a new meaning.
Obviously you’re not the only one who is furious about this; today saw the widespread viral news of one Denny’s franchisee owner who decided to take it upon himself to rearrange the business structure in such a way to highlight the injustice of being between a rock and a hard place with Obama’s push. That he means well is obvious; the problem is that the burden is a stagnating one — if the economy weren’t in its fragile state, business owners would probably be willing to swallow the cost. Maybe not now. Certainly not quietly, when the taxes are going to bleed out a potential employee here, or many workers’ hours there.
As a citizen, I still would never feel comfortable with Mitt Romney as a President; for me, it goes beyond what we’re doing inside the states, but outside them — fruitless warmongering, militarism, the death of countless innocents, secret wars in lieu of proposed transparency, Russian-snuggling, and continued support of Israel when they have firmly proven to be the kind of allies that make you wonder whether or not you need enemies. That said, if those things weren’t on the table, and it was all about what we are doing at home instead of abroad, I wouldn’t be happy with Obama’s route — it’s quick and sloppy, and even if we agree as a nation that we need evolved healthcare, and we need to ask more of those who can afford it, we still need to make sure we’re talking about those that REALLY CAN afford it. You don’t need to expose what you make for us to believe you when you say 100,000 in taxes is painful — not just for you, but for growth. It’s a sad thing, and I hope that in spite of it BladeHQ and its affiliated companies can continue to grow.
Hopefully it becomes clear to Obama that he needs to champion small business in a more concrete way. On a lot of issues I agree with him, but I obviously hold that he needs to find better ways of supporting the growing companies that he claims will be the savior of the economy.
While I don’t agree with you politically I appreciate that you actually oppose Obama on a rational basis. I can’t tell you how sick I am of hearing people’s crazy issues with Obama that don’t have any basis in this reality or any alternate reality for that matter. I’m pretty sure that the world is not going to end because Obama got reelected.
Yes, here in Utah there is there a lot of irrational Obama-bashing. I don’t think he’s been a bad president, but I was ready for a change. And I agree- the world’s not going to end. Well, unless is does. But it probably won’t be Obama’s fault.