The Truth Behind "Small Business"

Originally posted by neo96
who defines small businesses? some moron who has a degree and never ran a business large or small.

business have overhead people loans,insurance,regulations theres alot that goes into a business some of those are fixed costs and alot are variable costs businesses expand and contract according to market conditions

and when you mess with taxes that is the difference between being open or closed and profit and bankruptcy

when your an employer you pay taxes
when you have employees they pay taxes
when those employees go out and buy their everyday needs from other businesses they are creating more profit thus paying more in taxes

what happens to one happens to many many many people and when you raise taxes you are killing profit you are killing jobs and you are killing wealth.


its so simple its stupid

and when pundits omit what really goes on its pathetic

edit on 22-10-2010 by neo96 because: (no reason given)

The IRS defines "small business" and I believe the proper designation is "S" Corporation which actually refers to the number of people paying income tax on the company's profits and not the actual size of the business or the number of employees they employ. Maybe you missed the introductory video, www.msnbc.msn.com...

The subject of this thread is the payment of taxes being paid on company profits and not employee taxes which are deducted from the employees paycheck and submitted to the proper taxing authorities. Nor can a company take credit for paying taxes that employees pay when spending their paychecks, that's why it's called "their" paycheck. Under that interpretation, I guess it would be fair for companies to claim that they paid sales taxes which were actually collected from customers and submitted to the state comptroller based on sales. If this is the position you're taking, then the problem you seem to be having is separating their money form yours.

At what point does the employee's paycheck become his own and when do the taxes that the employee pays, while spending that check, become taxes paid by employees and not by their employer?

Truth is that most corporations don't pay taxes as demonstrated in this video from last nights Rachel Maddow show, www.msnbc.msn.com...

Sometimes, the truth hurts.

Originally posted by Flatfish
Surely you're not equating the collection and submission of employee payroll taxes as taxes on your company.
The only portion of those taxes that your company is actually paying are the compulsory taxes..

Ok...so your saying that I cannot equate my portion of the soft costs that are taxed on my company as a tax, then you say I am only paying the compulsory taxes. I wasn't saying that employee deductions are a tax on my company, did you even read the previous posts?

In what world does what you are saying qualify as logic? I pay taxes, believe it. I explained my position earlier quite reasonably.

When I am forced to pay the government a stipend for no other reason than their demand for that stipend it is a TAX by any other name.

reply to post by Flatfish


the way i see it is you obviously never ran a business and the only thing your doing is perpetuating a lie.

you have no experience in business other than what some website tells you.

so feel free to rant on i see no need to respond any further in this thread

reply to post by Flatfish


The main thing here to remember that the tax code is specifically designed to maximize Washington while minimizing everyone else.

It is my train of thought that they [Washington] believes that money that interchanges within the free-market is not the individuals' or the business'. They firmly believe that the money is theirs and we are allowed to keep a portion of that amount.

While according to the tax code, a 'small business' is defined as the following: SBA Standards

For the ongoing comprehensive size standards review, SBA has established three “base” or “anchor” size standards: (1) 500 employees for manufacturing, mining and other industries with employee based size standards (except for Wholesale Trade); (2) $7.0 million in average annual receipts for most nonmanufacturing industries with receipts based size standards; and (3) 100 employees for all Wholesale Trade industries.7 For a limited number of industries, SBA uses different measures, such as financial assets for the banking industries and barrels per calendar day (as part of a two-component standard) for the petroleum refining industry.

This is the comprehensive method, which is the rule. There are of course, exceptions to that rule. The size of a company is determined by many factors such as its income, sales, type of industry, etc.

So generally, 500 employees or less is what is referred to as a 'small business'. While I believe that generally people are talking about are Main Street Business. The mom and pop shops, the dry cleaners, etc.

This though is a perfect example of bureaucratic chicanery. Muddle the whole process with so many processes that the citizen cannot possibly be familiar with even something as basic as what size a business is.

reply to post by neo96


You would be surprised to know what I've run and I'll give you a little hint, it had over 300 employees. Although, I don't feel obligated to spell out my business experience to you as we seldom see eye to eye on any subject anyway, so it would probably be a waist of time.

Just because you don't like something doesn't make it a lie, unless of course you're Fox News.

reply to post by ownbestenemy


Although I agree with you that the SBA has an established definition of "Small Business," they are not a taxing authority like the IRS. The IRS has a special code for "S" corporations that has it's own set of definitions and you can read a little about it here; en.wikipedia.org...

reply to post by v3_exceed


I'm not saying that you or your business don't pay taxes. What I am saying is, that some of the nations largest corporations like those mentioned in the video, (Bank of America, CITI Bank, G.E.) don't.

All I know is that when working class americans pay more in actual tax dollars than a huge corporation that is earning record profits, something is askew. According to the video, the three above mentioned corporations paid 0.00 dollars in taxes in the 2009 year and I know a lot of working americans who paid considerably more than that, including myself. I don't pretend to know how they did it, just that they did and it needs to be stopped.

reply to post by Flatfish


Ugh, no. I must be getting ripped off. My business is in the 10-15M per year range, on average. I pay 36% every quarter on estimated tax liabilities. I am a sub chapter S corp and my accountant presents me with what he expects the government will want. Sure, our burden rate is designed to allow for taxes and all other intrusive expenses the state and federal government demand. Sometimes we win sometimes we lose. All we can hope for is a balance at the end of the year. It is almost impossible to accurately gage all expenses imbedded in every product we build. Materials are always in flux as well as everything else.

reply to post by scotticus prime


There is a huge difference between "tax liabilities," which includes taxes withheld from employees payroll checks that you may be responsible for submitting to the proper taxing authorities and "income tax" or tax on the profits of the company.

If you own a company that is classified as an "S" corporation then you are paying annual taxes on company profits through your personal income tax return and if you're paying 36% tax on those earnings then you are not one of the tax culprits I am speaking of. I didn't mean to imply that every business owner was a tax evader, only that the current tax code permits it for some.

If I had a 15m a year business and I was paying 36% tax, I would be asking just what does it take for me to pay 0 dollars in taxes like Bank of America, CitiBank or G.E.? I mean really, just how is that possible? Hell I don't know, maybe you are indeed getting ripped off.

reply to post by Flatfish


Saying corporations don't pay taxes is like saying they also don't pay their electric bill.

If the price of electricity goes up - they have to increase the price of their product. If taxes go up in a region, it is more expensive to produce things in that region, and therefor the price must be raised.

There is nothing inherently wrong with taxing businesses. However, if your taxes are too high, businesses will simply move out of your tax district, where taxes are not as high, and simply import their products into your district (where only retailers would have to deal with taxes). If taxes are still high on that end, then retail and service industries will move out, followed by the population.

So, yes - corporations pay taxes. And, yes, increasing the taxes they pay also increases the cost of operation/production, and therefor causes the price to increase at the shelf.

I suppose, if you really wanted to, you could say that translates to not paying taxes. It's not a problem - it's economics. If you can't figure out how to budget your own government's money, don't come beating on the knuckles of business to bail you out of your incompetence, then attempt to criminalize businesses for knowing how to function within the confines of a budget.

It's getting old.

reply to post by Flatfish


I have been taught my entire life that it never pays to cheat. Sure some do it all the time. For me it is not worth the headache. My accountant does always look for legal ways to reduce my taxes on estimated earnings. It does make me upset that so many people cheat the system. I believe that someday they will get what they deserve. As long as I am a subchapter S corporation I will continue to do what is required of me. Jail and fines are not something I want to risk.

The IRS defines a small corporation as having 500 or less employees. My God I have enough headaches with the 45 people I currently employ.

Many of the threads I read on this website tend to slam Obama for the high unemployment we are currently dealing with. I can tell all of you what is really going on with this economy. Simply put the people with really deep pockets are strangling the economy because they want republicans back in power. This happened when Carter had all three branches of government, Clintons first term same thing and now. Trickle down economics may suck for smaller companies like mine but it is an economic reality that when the very rich turn off the spigot we all suffer.

Thanks for the reply.

reply to post by Aim64C


All I can say is, that after watching this video; www.msnbc.msn.com... it became more than apparent to me that some very big corporations do not pay taxes. On top of that, Rachel Maddow even identifies G.E., the parent company of MSNBC, as one of the culprits, so much for bias left wing reporting.

On the other hand, you did raise some other very important issues, like the fact that businesses will indeed migrate towards the cheapest, least regulated environment in which to locate and do business. If Americans and the world at large do not wake up to this fact then we should expect to reap that which we sow.

We have allowed our industrial base to move overseas to the "cheapest, least regulated environments" and abandon the nation that they so patriotically claim to love, the U.S.A..

As places like China and India begin to educate their masses and raise their standards of living, their population like the americans before them, will eventually demand higher wages and environmental regulations. Well, guess what happens then? Their industrial base moves on to the next exploitable nation leaving in their path, a trail of collapsing economies. The only real question is, "Who will be next?"

That's why I've always said that a "global" economy will not work without some type of "global" framework in place that protects and preserves the industrial base and the standard of living enjoyed by each nation.

The only means that I see of accomplishing this goal is to adopt a "global" corporate mandate that "products built for sale in any particular country must be manufactured in that country." Only raw materials and/or products which are impossible to manufacture in the host nation should be allowed to be imported without very heavy tariffs put in place to offset the economic impact upon the importing nation.

This accomplishes two things at once, first and foremost, it protects the industrial base of America as well as that of each and every emerging economy. As they grow and improve their standards of living, they can rest assure that they will never become "too expensive" or "too regulated" for their own industrial base. Secondly, this would force manufacturers to sell their products in the same economy that they produced them in. This is a very good method for the self regulation of greed as it would stop companies from producing their products overseas for pennies on the dollar and shipping them here to sell for hundreds. Does NIKE ring a bell here?

Outsourcing is a disease and if left unchecked, it will decimate the economies of one nation after another with no end in sight.