Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Small Business Tax Reform

Politics / Taxes Jan 10, 2018 - 12:38 PM GMT

By: BATR

Politics

One aspect of the Republican Tax Reform that everyone can agree upon is that it is not perfect. Fox business reports in What tax reform really means for small businesses.

"Instead of lowering the tax rate on all pass-through businesses, the final bill allows pass-throughs to deduct up to 20% of income. But who can deduct how much depends on what type of business you run and a corresponding formula".

Stop right there. It should be entirely clear that the political realities and influence of corporate lobbyists supersede that of ordinary businesses.


Ken Berry, J.D. reports that the 2018 Tax Reform Law has Benefits for Some Small Businesses. The Tax Cuts and Jobs Act (TCJA) in general, revised rules for businesses take effect in 2018 and are permanent, unlike most changes for individuals. The topics he list are: Corporate taxation, Section 179 deductions, Bonus depreciation, Luxury car deductions, Pass-through entities and Other deductions and credits.

Now before you zone out on such a pedantic examination, consider that a restrain redress for optimum small business treatment is a fundamental mistake. Fact Finders reports that hires for corporate positions fall short of that for small business. "According to the U.S. Small Business Administration (SBA) Office of Advocacy, small businesses have generated 64% of net new jobs over the past 15 years. The SBA considers companies with less than 500 employees to be “small businesses,” which encompasses 99.7% of all businesses that have employees in the U.S. under that umbrella term."

If the Trump forecast is correct and that Corporations will re-patriot trillions of dollars back into the U.S. and invest in growing their businesses domestically, one might overlook some of the disparities that favor the transnational firms. However, anyone who has ever aspired to climb the economic ladder of success knows that owning your own venture is more realistic than getting on the ground level with stock options of a startup which may never go public.

As for those who aim at becoming a CEO of a fortune 500 company, legions of tax lawyers and advisors will circumvent any legislation or regulation that could be passed or approved.  

Humble workers do not have the same wherewithal to avoid paying taxes by working the system. A technique on How to Temporarily Stop Withholding from a Paycheck is no permanent solution.

"You can stop withholding from your paycheck by completing a new Form W-4 -- "Employee's Withholding Allowance Certificate." This will stop income tax from being withheld from your check, but not Social Security and Medicare taxes, which are mandatory and cannot be stopped by you or your employer. Some states impose other mandatory tax withholdings, such as state disability insurance. If you live in a state that has required deductions other than income tax, the mandatory withholdings may remain in effect."

Amy Fontinelle submits an analysis and summary of Tax Withholding: Good For Government, Bad For Taxpayers and identifies that the system imposes costs on employers.

"The employers who protested tax withholding in 1913 and got it revoked in 1917 had good points that are still true today. Businesses have to hire additional staff to deal with tax withholding and spend time and money on tax compliance that could be spent on improving their businesses or paying workers more."

Knowledgeable political observers know that the IRS administration is about behavioral compliance more than collecting revenue. The push back from accountants, attorneys and bureaucrats for a simplified excise tax method has plagued the country for well over a century.

Identity exploitation politicians chant how the poor will suffer but never propose a positive approach that offers an effective inducement to earn their way to prosperity through a viable small business economy.

Here is an option from The National Bureau of Economic Research that offers a forecast from back in 1991.

"How high would a national retail sales tax have to be to replace not just the personal income tax, but also the corporate income tax and estate and gift taxes? According to a recent NBER study, Distributional Effects of Adopting a National Retail Sales Tax (NBER Working Paper No. 5885), the answer is 17.2 percent."

Another alternative is the Fair Tax Act of 2003 presented a 23% national sales tax figure. Remember this approach is NOT a VAT tax structure. Before the timid of mind fear that they may have to pay more in taxes, consider that control over our own money has not been part of the current tax system in anyone's lifetime.

Obviously, the GOP version of the Trump tax cuts never entertained any discussion about a total revamping of the federal income tax and withholding system. Alterations around the edges did provide some much needed relief. However, the crucial role of concentrating on and favoring small business was mostly ignored and what did pass was an afterthought.

The notion that the United State offers an opportunity to compete in a free enterprise economy is a myth. The corporate lobbyists own the votes of both parties in the House and Senate. Congress for all practical purpose fears an independent merchant economy because it cannot be controlled. The fascist partnerships between mega-corporations, global internationalists and all invasive government are undeniable.

Every responsible American needs to become a productive economic engine of wealth creation. The reason why our nation was different from other countries that are under the control of coercive and entrenched central authorities, is that ordinary citizens had the prospects of achieving what was once known as the American Dream.  

The U.S. tax code has been a major instrument to diminish and weaken the advancement of an upward and mobile society. Economics may seem to be a dry subject but that is no excuse for remaining ignorant to the means and methods for achieving independence.

Only a strong small business sector can challenge the financial manipulators of Wall Street who have owned government policy for as long as politicians could be bought.

Source: http://batr.org/merchantry/011018.html

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2018 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors

BATR Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in