How the Government is Wiping Out Small Business - Internet Marketers, This Effects YOU.
This is a bit off topic, but it relates to your Internet Marketing business so I figured I’d talk about it today. I’m so livid about this, I want to make sure everyone knows what’s going on.
So… Tax day is coming up…
I live in Maryland which has some of the highest taxes in the US. My accountant just got done preparing my taxes for this year and it looks like I’ll be paying around 45% of my profits to the good old government.
Great… I’m sure loving that.
Here’s what got me pissed.
I read this article on the New York Times which basically said that a big US Corporation in 2010 made something like 4 billion in profits, and not only managed to pay ZERO taxes on it, they also received billions of dollars worth of tax credits back from the government…
Source: http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=1&hp=&adxnnl=1&adxnnlx=1301342462-XOiyc7t31eD+OVleckPsnw
Isn’t that fun?
Let’s look at this from a stand point of competition.
Not only does a corporation like this have a huge advantage over a competing small business start up because of their massive leverage and assets built up over the past 100+ years of being in business…
(which is fair practice IMO)
But they also pay -60% in taxes while the new small business has to shell out 40% of its profits to the tax man.
How can the average person who has dreams of starting up a new small business come even remotely close to competing like this?
My gripe is not so much with the company in this situation - they’re in the business to make money, I get that. Hats off, because they are making a crap load of it. My gripe is that they are allowed to control their niche using unfair tactics allowed by our pals in the Government…
Which leads me to believe that my thoughts that a corrupted governments’ sole purpose is to further separate the rich and the poor class by wiping out small business opportunities is confirmed.
Internet Marketers: Build up your business ASAP. Build massive leverage immediately before the large corporations start breaking into our markets (which is already underway) because once it happens they bribe their way to 0% tax while us small business owners are left to pick up the tab.
Share this with anyone who you know that works online. Everyone needs to know about this before corporate and government interests are completely intertwined. It’s probably too late already, but at least we can make sure people are aware of it.
P.S. Just so we’re clear here, pay your taxes. You should always pay what you owe. Render to Caesar what is Caesars is what they say - definitely do that because it’s not worth the consequences.
All of us in North Carolina have lost our Amazon accounts because of our state tax laws.
You are a little late to this ballgame. This has been going on for years.
But in all honesty, I think you should educate yourself a little on this.
Those “evil corporations” employ thousands of people.
You sound like you are pissed off because you made some good money this year
and weren’t prepared for the tax consequences. Did you do anything to reduce
your tax liability?
Taxes are a part of the business world. Learn to work with it.
Did you read the one about Wal-Mart being behind all those affiliate taxes many states are starting to implement. Apparently out of fear of losing business to online sales, particularly generated by affiliates, Wal-Mart has been working behind the scenes to influence those taxes. Yet Amazon, which appears to be the real target, does not really lose - they simply drop affiliates from the affected state(s). Suffer the small business.
Yeah, the Govt always wants the lion’s share while somebody else takes the risks. One thing you can do is quit paying state income taxes by moving to FL or NV. I live in Vegas and love it and don’t pay any state income taxes.
Why are your taxes so high? Are you filing as an individual?
I’m surprised you’ve only just picked up on this Dan.
This has been heading our way (in the UK first) for a very long time.
I hope you check out ‘The Human Survival Blueprint’ at the link above.
It makes for interesting reading and arms us with the knowledge to defend ourselves.
shared with my followers…. this is not right!
steves a fool “the first comment”…what a fool…Great post Dan
Take a lesson from Rupert Murdoch:
http://knox.villagesoup.com/discussions/view/rupert-murdoch-weasels-out-of-paying-taxes/388679
Actually in Neill Strauss book Emergency he also somewhat covers this:
http://www.fourhourworkweek.com/blog/2009/03/03/how-to-be-jason-bourne-multiple-passports-swiss-banking-and-crossing-borders/
But in general I agree that this sucks for us small business owners perhaps it is time to consider registering your business in another state I am sure that would help if only slightly.
Tim
@Mitch,
Yeah I mean I’ll just take that $20 million dollars that I have laying around to bend some tax rules in my favor… since the average person can do that and all
yh Pete’s right, this the norm in the U.K.
All you can do is move I guess.
@Tim,
Yeah man in the process of registering my S Corp in Delaware at the moment which im pretty excited about. Good links btw
Dan
Hey Dan,
When asked by a Pharisee if it was lawful to pay to Caesar the head tax, Jesus commanded, “Pay back, therefore, Caesar’s things to Caesar, but God’s things to God.” (Matthew 22:21). I’m not a fan of paying taxes, but it is what it is.
That big business seems to receive all the tax breaks and refunds is sad indeed.
Anyhow, your statement above about “corrupt governments” is pretty bold. I realize we have the right to free speech, but I’d be careful as you never know who’s watching.
Take care,
Fred S.
Hey Dan, sounds like you need some write offs! Have you looked into becoming a limited partnership? Maybe we just need a good ole tea party and straighten out the boys in congress.
Everyone’s comments are true whether they agree with you or not, everyone has an opinion on this, my opinion is the government doesn’t give 2 hoots about anyone but their own yearly (mandatory) pay increase, although taxes are important to build our countries they could not waste it by using it for crap we don’t need and they could build the roads faster perhaps, and then give it back to people. I’m in Australia and everything is getting worse here.
Hey man, just pay up! To pay tax you are already making it. Just regard it as giving back to society for your good fortune. If you don’t like it emigrate!
Taxes are things we all have to live with. One year I lived in NC and worked in SC. I had to file taxes in both of those states plus one in another state, not to mention federal taxes. As a result, I moved to a state with no state tax. In a way this is a form of rebellion or conscientious objection.
What we really need here is learn how the big boys run their businesses and learn from them. Once you hit the magic number you become exempt from the taxation burden. Until that time comes we must pay the devil his dues, Change needs to take place. Knowledge is a good point to start with. Of course there is the extreme with like the historic Boston Tea Party.
Paying 40% in taxes is just ridicilous in my opinion. Just because you have the balls and the smarts to run a profitable business doesn’t mean you should get hit with all that tax.
Now the states are so broke that they will do everything in their power to get more tax money even if it means killing lots of small businesses such as as us Amazon affiliates.
There are over 25000 Amazon affiliates in California and they pay around 125 million dollars in income tax to the state each year. If the new tax law passes all those people will be out of their business and the state will lose all that income.
Go figure!
Anyways, It seems to me that they are making it very hard for business to thrive in this country.
Cheers
Ps. I saw that GE segment on Fox news a few nights ago and I was in disbelief.
Dan,
I feel the same way, but I have learned over the last few years how to use the tax code to my advantage. You can setup your own corporation and use that to pay yourself. Here is a cool little tip:
Earned income(meaning a W-2 job, or self employed income) is taxed at the very highest levels. Someone who earns $100,000 this way pays more in taxes than someone who earns $40,000. Basically, you earn first and pay taxes next, then finally have disposable income to pay your bills.
A corporation earns money first, pays the bills 2nd, then pays taxes last after the bills. The average wage earner or self employed person does not get to work that way.
Here is the tip though, if you have a corporation and hold stock, you can pay yourself via a dividend, and dividends are taxes much lower and at a fixed percentage rate. this means you pay much less on your earnings.
This is broad stroke stuff, but you can check out Your Entity Solutions for entity structuring and Warren Taryle CPA for taxes. I have used both and they always take care of me.
John
It is this current administrations mission to destroy the middle class and they are slowly day by day accomplishing it and, destroying this great country of ours that so many have died for to preserve for our children and the next generation.
There is nothing that eats away at my core everyday more than to see this CANCER slowly kill this great country. We truly have a bunch of Chicago thugs running this country further into the ground everyday and destroying our Constitution.
And if you think it’s bad what they are letting the large corporations get away with, how about they paybacks to them for their votes (tax credits), or the more than 1000 national and international companies that have now been allowed to opt out of O’Bummers Heath Plan. Now that sounds far doesn’t it? Where do I sign up for that too?
And please don’t get me started with the fact that more than 45% of taxpayers pay no income at ALL, they just suck up all the benefits that the rest of us pay for and enjoy the ride.
This administrations view for the middle class and small business can be summed up very easily, it’s just “Bend over and grab your ankles”!
@everyone,
Just to be clear here, I recommend everyone pay the taxes they owe. I am paying every penny that I owe to our friends at the IRS, and while it sucks, it is what it is.
Although that 8% tax in Thailand is looking mighty fine right now. I could move over there and register a corp and save a crappppp ton of money. Not to mention one can live like a king over there for $1,000/m.
You can’t really compare large companies to small businesses. They have a very different mindset, and resources that allow them to pursue a heavy growth model, leaving them operating at no net profits or at net loss year after year. They can afford it and they have to do it to stay competitive at that level. Amazon did this for many years in order to get to the place where it is today.
While for a small business it sounds nice to have a huge net profit, for these behemoth companies, money not spent is money wasted if its heavily taxed, and so they will take any net profit and invest it in growth or hand out salary bonuses. The latter of which small business sometimes to lower the bracket.
That’s not to say they don’t fix tax shelters and things to work the system, but there are good reasons why they pay such low rates.
On a side note, this post looks like it’s gonna be a fun one
I have some popcorn ready because it’s already received 20 comments in less than an hour. I bet this ends up being my most popular blog post to date hehehehe
While we are being clear… It is the previous administration and the current Republican governors and congressional bodies that are cutting the taxes to the large corps, not the current admin. It is also the republican policies to eliminate as much tax as possible for the upper echelons but not for the rest. Do not be fooled by their fear mongering propoganda machines. It is the middle class that is getting reamed alright, but not by the Democrats. Let’s get the facts straight.
I think paying tax is business as usual, it comes with the game.
Only thing is it should be the same for every business, that includes the big cooperations and there things go wrong, the don’t pay a dime.
Saying that they employ a lot of people doesn’t matter, they make profit!! pay tax over that profit.
Employees are then already payed for.
Marc
haha I love your comment about living in Thailand.
I’ve set up a limited company so that I can pay less tax and get some tax breaks such as claiming back for computer stuff and… software including WSO’s. It doesn’t completely get the tax rate down but it is considerably less than the normal PAYE rate.
Apart from that, I’ve always accepted tax as being a part of life. Corporations get of easily but IMO only because of the job opportunities they create, revenue they bring into the economy etc
I believe that taxes are necessary, but corporate welfare is not. Of course we already know the wealthy make the rules. There is nothing inherently wrong with wanting wealth. The question too few have asked, “how much is enough?” Not knowing that answer can certainly lead to never having enough.
[BTW - the effect of taxes affects everyone. As does the overall lowering of education in this country. Which I think is one reason so much gets past the general populace. Just a thought.]
While we are being clear… It is the previous administration and the current Republican governors and congressional bodies that are cutting the taxes to the large corps, not the current admin. It is also the republican policies to eliminate as much tax as possible for the upper echelons but not for the rest. Do not be fooled by their fear mongering propoganda machines. It is the middle class that is getting reamed alright, but not by the Democrats. Let’s get the facts straight.
P.S. When iwas paying six figures in taxes each year I didn’t like it, but it pays for our country to work so I did not resent it. Now I make much less doing something I love much more and am much happier (and paying a smaller tax bill. Winning all around!).
Actually Dan, the internet marketing affiliate with the right knowledge has a big advantage in that they can work from anywhere in the world. Did you see the 60 minutes spot this last Sunday where they talked about the big corporations making their headquarters in Switzerland, Ireland and other tax friendly countries because the United States is getting ready to have the highest tax rate in the world after Japan lowers theirs next month?
They stated that GE had the lowest tax rate and was only paying 3%. The way I see it is that there is nothing stopping small affiliate marketers from doing the same thing. All you have to do is have a corporate presence there. Maybe someday our government will wake up and realize that the people have a right to vote with their feet… especially the small business. We can just relocate to another country. We are marketing on an International basis aren’t we? I think tax planning is the best course of action until the governments institutes a more flat tax without all of the loopholes.
You were in central FL for the Clickbank Masters event. Do you think that you would enjoy living here? It’s hot at times, but worth it. No state income taxes and a 12 month tan.
45% in taxes is high imo. Find a better account and get some more expenses like a couple more of those Mac’s that you recently bought
@admin
About moving to Thailand, That is where most internet marketers are setting up shop. Not to say any names **cough** George Brown, Holly Mann, etc.
Not to mention you can live like a Rockstar over there.
Tim
Is Mitch serious?
I sided w/ Henry Blodget on Business Insider for this. It’s Corporatist bs. Capitalism is excellent, but the government is currently in the business of picking and choosing losers.
Worse yet, the government claims to be a vessel for the little guy to rise up. Isn’t that always the justification for big government programs? Here they are helping out GE in crushing their competitors. How do you compete w/ a company when they can just get the law on their side?
It’s gross, and the feds should be ashamed of themselves.
Please also keep in mind that there’s a vast difference between people like Steve Jobs (presiding over a company that’s profitable for making things people want) vs. Jeff Immelt (presiding over one that’s buddy buddy w/ the feds).
Our tax code sucks. In an ideal world, there would be no tax on corporations, but since that would never fly, put a flat tax on all of them. No exemptions. No progressive tax brackets. That’s the least bad way to deal w/ this.
I live in North Carolina and I can’t become an Amazon affiliate either. Believe it or not, but the U.S. has always been a welfare state for large corporations. They have been getting bail outs for the last 50 years it doesn’t matter if it is a Democrat or Republican in office.
Massive thumbs down to the people that criticized you Dan and in effect told you to “shut up & pay”.
One of the main principles of free society is the right to question government.
And the situation you highlight here, GE paying no taxes at all, is nothing other than completely criminal, even if they did it in what is a permissible, legal manner. It is criminal for the government to allow one of the 5 largest companies on earth, that was profitable in 2010, to pay no tax at all, while squeezing independent business owners for 40%.
If these trends continue, it simply brings closer the time of Revolution.
Thanks for the heads up Dan, and thanks for the quality content and advice.
DAN! You really struck a major chord here with ME. This is exactly the kind of thing that infuriates me about the “The Man” and the way we operate our country!
I HATE how and where they spend my tax money, and the fact that they take so much of it!
This is indeed going to be a hot and heavy discussion!
On the bright side, after you make a million, your taxes start going back down. I had the same experience this year with my tax guy. I was advised to file quarterly and some people file weekly. I don’t understand it, but we are getting screwed.
Dan.the comments are right on the money. Gov Patterson made it law in New York that the taxes are to be collected from online retailors.I`m not suprised it was going to happen sooner or later times are desperate for state goverments and federal. If they go broke you still have to pay taxes.
Personally I am saving up to register my business as a LLC = Limited Liabilty Corporation/Company in the state of Nevada. There’s a site online that does it for about $200. I’m sure anyone could find it, sorry I don’t have it handy. Google it n there’s nearly 8 million results including cheaper do-it-yourself kits. Many advantages like John Racine above says.
@Fred | Golden Rule Internet Marketing
“your statement above about ‘corrupt governments’ is pretty bold”
is about the tamest statement possible on the topic of the blatantly-corrupt ruling classes. But tame kow-towing to officialdom is to be expected after 10 years of ruling PerpeTraitors Covering-up and Censoring Their Crime of the Century, now that at least half of US still blindly believe that arab hijackers fly Boeings (that official BTA records prove never left the tarmac) into skyscrapers with crashproof glass facades.
Get this, Fred: corruption is the new norm in high office.
Read Walter Burien’s comprehensive expose’ of the Sceret Billion$ of (y)our tax dollar$ the baskets have salted away in plain sight.
http://www.CAFR1.com ….
google “The Biggest Game in Town” and watch the 2-hour video: my business outlook has never been the same since I watched Walter uncover the hidden real world.
EVERY State in the Union, every City=Corporation, guards secret trading accounts, massive dollar investments in offshore banks, accounts that are many time$ the size of the crims’ well-publicized total-loss public-debt account$
Even here downunder, some of us look even further offshore for a haven where to shift our business HQ.
Dan, congrats: the Govt wants rid of all of the entire US middle-class, small business types as well as the few fortunates still left with a JOB.
Your headline only hints at what TPTB have in store for all of US… except a few Bankster friends who call the shots.
….and pull the trigger.
MikeR
Auckland, NZ
Large stores have been pressing for Internet stores to pay sales tax for a long time. Now Walmart is really applying pressure in Texas. They feel Amazon has an unfair advantage since they don’t have an actual physical store they don’t pay sales tax.
California, Wisconsin, Illinois, and Texas to name a few states having budget problems and deficit spending. Texas is cutting back on funding to schools and is causing the lay-offs of up to one third of the teachers and support staff for schools in some areas.
Look for more taxes soon on everything including food.
Well thank goodness I am in the UK, we pay higher taxes generally around 60-65% goes in taxes here, however books are intellectual property and there is a way to legally avoid tax on them here, which is a bit of good new amongst all the bad. Therefore Dan it may be a good idea to come over to the UK and work with me Lol - Take Care
PS I take your point seriously though, the same things are prominent in the UK especially with the banks and investment companies.
@Harry…you sir, are a moron. Did you even read what you wrote before hitting submit??? No need to answer as it was a rhetorical question. You really do sound like a 3 year old - blaming his younger brother for spilling the milk - but, that’s to be expected as that’s exactly what your administration has been trying to do since the last election, which was what…going on 3 years ago now??? Ha…what a joke you all are…time to grow up. put some big boy pants on, and take some responsibility for all of your party’s spending and tripling off the deficit since the last administration…can’t blame that on Bush now, can you? (once again, rhetorical question, as I’m sure you’ll try and come back with some weasley, 3 y/o reply that sounds just as bad, if not worse, than your 1st and 2nd posts, so don’t even try…or bother
You won’t live like a king in Thailand for $1,000/month, so go ahead and get that out of your head. Believe me I know.
You will however have a much better lifestyle for the money you spend here than back the States.
However, currently the baht is very strong (compared to what it used to be) against the euro, pound, and dollar.
Anyways…not a bad idea to live abroad where your dollar goes farther.
Hi Dan
If you are planning to be a millionaire best you learn how money works. You can’t bend the rules if you don’t know them.
In his book Think Like a Tycoon (my copy published 1993) W G Hill says to live in one country, work in another country and have your money in a third country. Robert Kiyosaki says to live from inside a corporation as you pay bills first and tax later. Opposite way round to an individual and already mentioned by John Racine above.
Didn’t you see that video going round a year or so ago? A guy had all his investment income paid to a company in Cyprus. The Cyprus company gave him a small ‘wage’ and the company paid for everything he asked for. Everything was tax exempt. Would not work in the UK as we are taxed on company perks too. Then again, I would not ‘technically’ be living in the UK anymore. Just physically living here. Wait till they cotton on in the USA that company perks could be taxable. That will squeeze a few of the Big Company directors and high earning employees.
Thanks to Tim for his links.
One of the reasons that large corporations get away with not paying tax is because they re-invest so much money back into the business. Therefore, their profits are not seen to be so large. One way they invest back into their businesses is to employ some very tax clever accountants to make sure their cash stays where they want it.
Just treat this year as a learning curve Dan. Just make sure you put your learning in to action so you are not paying to learn more than necessary.
Good luck
Tony
Somebody has to pay for our country’s huge national debt. Maybe you should consider making your business a corporation.
Thanks Dan. It’s great to have someone write about this and stand up to the tax collectors/government. It’s ridiculous whats going on, and even in Canada this crap is happening; the government barging down on certain online businesses.
My teachers have always been right about one thing; our parents had it easier to build something from scratch. Now when it’s our turn(the new generation) we have to carry a big bolder on our back. It’s sort of depressing reading things like this since it’s reality, but it only makes me more hungry to succeed.
Kudos
40% is ship, In Sweden we pay about 65%
Dan, it’s part of the bigger game for large corporations. How can they offset investments against tax for example, some of these could also be donations and as someone else mentioned they also employ thousands of people.
This is just another example of the big, the bad, and the ugly taking advantage of the little guy and their campaign to eliminate true competition from the marketplace. I’ve seen it through the years in my own neighborhood when first Block Buster and then Wal-Mart moved into our area. First the small, independent video rental places went under because they could not compete with Block Buster’s unfair pricing and then Wal-Mart destroyed all of their small, independent competition in the same way. I also cannot be an Amazon affiliate because I live in Colorado, which I belive passed the Amazon.com tax.
Too bad we as small business owners can’t join forces and lobby Washington the same way the huge corporations do it - oh, but wait, that would be unfair to the large corporations, wouldn’t it, which means they wouldn’t be able to compete with us small guys.
I’m getting off my soap box now - I have laundry to do.
Dan, don’t feel bad. Here in Canada the Government is REALLY wiping out small business.
Canada Post which is the same as your Federal mail delivery service, isn’t making enough money (even though its subsidized) so, its gone into business for itself on the Internet. No, Not selling stamps or coin collections but (drum roll) Online Shopping Made for Canadians
Home & Garden Dyson Vacuums Fridge Snowblower Dinnerwear Automotive
Car Audio Wheels & Tires
Babies & Kids Storkcraft Crib Peg Perego Stroller Baby Carrier Graco Car Seat
Fashion & Style Nixon Watch Ugg Boots Gap Puffer Vest Men’s Parkas Women’s sweaters
Electronics Sony GPS MP3 Docks Camcorder Canon SD1400 Canon 5D
Xbox Kinect ipod nano LCD TV
Computers Notebooks Dell desktops
Health & Beauty Dolce & Gabbana Perfume Sports & Fitness Snowboards
Ski Goggles Backpacks Nike NHL Men’s Wear
canadapost.ca/shopper/
They are affiliated with all the big names and they boast:
“We gather data from MILLIONS of products and hundreds of stores to discover the best deals you’re looking for”.
How can the little guy even try to compete against a corporation that has unlimited funds to spend?
At least you are making money to pay taxes and at 45% you must be doing well!
American government is really killing small businesses. I was trading forex with an American Broker. Just before the Dodd/Frank financial regulations, we got an email from the USA broker, that we should transfer our accounts to their UK branch. My broker runs a monthly competition with the first price being $25,000, second price $10,000 and third price $5000. Winners used to come from US as well. But since the implementation of the financial regulations, no one from USA has won the competition again. Most who traded with USA brokers have moved their accounts off-shore. Many USA brokers have lost businesses to competitors in other countries. Your current administration is really serious about wealth redistribution. Congratulations for those who voted for the current administration. You can live with the consequences now! Just ask any Forex American broker, they will tell you how your government has destroyed their businesses.
This interested me:
The question too few have asked, “how much is enough?” Not knowing that answer can certainly lead to never having enough.
I watched an interview with a very, well known “guru” who interviewed a man who spends $30,000 a day on adsense. Of course he makes millions in return. Shocked at what is a year’s income for a great many people, I posed the “how much” question to them, their attitude was, whatever you want. .
Yes, this is crap but has been going on a long time but I think the American people are starting to wake up about all of this. Big retailers are now trying to get Amazon to have to charge sales tax in every state because they are getting their asses handed to them by Amazon and they dont like it.
Brain Training is right, Dan you have the right to speak up. It gets me that people actually believe that they are getting any direct benefit from all of our paid taxes……..THINK, where is most of it going….not to individuals or small businesses….unless you find the current armed conflicts as directly helpful to your business. I say great you made enough to get 55%, hope you can keep more next year.
my opinion is we should go out and revolt against the government let them also do business as when do and let them make money they should take the employees of the irs and put them to do real estate business for the government let them go trade for the government in the stock market and other kind of business and this will be great for the economy should they do business and hard work like the individual people that will be t right thing
One final remark, does it not shock Americans that none of the people responsible for the huge market collapse has been prosecuted? They have their hands back in the cash register again and it won’t be long before they are into another scam.
As a Canadian, I am thankful that our banking system is in the hands of the Government over seen by one individual, the Governor of the Bank of Canada, and not private individuals like George Bush, senior.. (See Michael Moore’s movie about 9/11)
The engineers who built the towers, publicly stated that, because they were built so close to airports, they were designed to withstand the impact of a 747. Go figure!
I hear all of you and feel you are giving some very mature responses for such a painful topic. I have grave concerns about where not just the USA Empire is taking us “for our own good” as well as what the rest of the controlling nations are doing with the fiat money problem the banks have orchestrated.
In the process of looking for solutions, I’ve come across two rather interesting groups which are trying two very powerful methods. You may care to check them out, too.
One is using our original Declaration of Independence from England and its oppressive taxation of our young country and in effect starting over from that perspective and progressing rather nicely forward. The organization explains just how we got into this mess during the Civil War and haven’t been told that what goes on in D.C. and additionally each of our state governments, too, is unconstitutional. They say we no longer are a republic of the united states [search the phrase] but a corporation running it like a business with the Pres as CEO handing out Presidential Directives.
The other is using the powers of the Internet and staying within the current situation. They’re using the phrase “Get Out Of Our House” to call for a new way of selecting new people for the Federal House of Representatives. Brilliant approach.
I’m not sure I’m brave enough for the first or energetic enough for the second choice, but they sure are encouraging with the information that is provided.
Both approaches are for doing the changes in a peaceful, law abiding manner. And for THAT I am very much in support. And most all of us would prefer that way, too, I would think, from seeing what’s going on in the Middle East right now,.
We need to first educate ourselves as stated above, but this more to the root of the problem. Neither party gives a rat’s tail about the opinions of “we the people” because the way it is set up right now they don’t have to. And that is what needs to be corrected by a goodly portion of a well informed “We the People.” That will get our personal sovereignty back in our hands.
Dusty
When unemployment benefits stop being extended and millions of hungry, unemployed citizens hit the streets, there will be mass protests like in the middle east. The current corrupt government and their media lackeys will downplay this and try to ignore them, as those who already hold the power have nothing to gain from REAL change… “The revolution will not be televised.”
I think we need to get all in office out and put poor people in so they can get the right things done because the ones there now are to rich and do not really care for the poor or are they going to do for them as they should as open businesses for them to put others to work and get this counback on its feet and theres no way to do that unless they loan money or give it to the poor to open businesses to get the taxes rowing agin or we all need to get together and rite to make the change seeing nothing else is working. Sorry to have to say that but it might be the only thing that gets it done.
yeah, it seems like Uncle “Sham” throws the book at you for being self employed.
Time for a flat tax!
That’s just great. I think we should be treated the same as large corporations. What makes them so special that they don;t have to pay taxes?
Hey Dan, I believe you may have royalty in your midst. I believe the genius Mr. Tim Ferris of the NYT best seller Four Hour Work Week is posting. If so, I would pay close attention everone.
Dan, it sucks to have your wealth siphoned off by government, but taxes are req’d to pay for all that “free” govt stuff. Unfortunately, you’re going to end up paying way more than your fair share.
The United States is the most indebted nation in the known history of the world. More broke even than Greece or any of the “Euro Crisis” nations. But it’s not being acknowledged for the crisis it’s become.
Peoples eyes glaze over - they cannot even comprehend the enormity of the amounts. So here it is scaled proportionately to numbers we can relate to:
Uncle Sam is in serious financial trouble.
He spent $74,591 last year, but he only makes about $50,000 per year.
His prospects of making even $50,000 this year don’t look good.
There’s a good chance he’ll actually end up taking a pay cut.
He’s overspent a lot in the past and has run up $295,632 in credit card debt. He’s been lucky enough to get super low teaser interest rates, and when those expire (so far) he’s been able to keep transferring his balances to other super low rate accounts.
But he’s still charging up $24,591 per year more than his income, and he needs to be able to keep rolling over his debt at these unsustainably low interest rates, because higher interest payments would absolutely kill him financially.
But that’s not even his worst problem… He convinced his whole family he was a great investor.
His parents have given him a portion of their income for years, and he always promised he’d manage it, invest it & use it make regular payments to them and cover their medical bills when they got too old to work.
Problem is their money’s gone. He already spent it on other stuff.
Even that’s not all though. He has some other relatives who are dirt poor, and he promised he’d always support them financially too.
But it turns out he’d need have to have $2,372,953 sitting in a bank account, earning enough interest to at least keep up with inflation, just to cover all his commitments.
But he doesn’t have any money set aside for it at all.
So here’s his picture:
$50,000/yr: Income
$74,591/yr: Expenses
$24,591/yr: Shortfall that he’ll charge to his credit cards (which accumulates in the revolving debt below)
$295,632: accumulated short-term revolving debts at artificially low interest rates,
$2,372,632: missing savings/investments req’d to fulfill promises to old & broke relatives.
What should he do?
Some friends of his who claim they’re “good with money”, say he must really cut his spending to get things under control. There are lots of things he could do without, they said, so he should reduce his spending by $1,292 per year to get back on top of things.
Other friends said that’s way too big a cut - it would be a real hardship to cut back that drastically. They suggested that reducing his expenses by $137 would be enough to keep things under control.
What does his future look like? Do you think he can keep going like this much longer? What about all those family members who are counting on all those promises he’s made to them?
Do you see any realistic solutions other than bankruptcy?
Multiply the above numbers by 47,620,000 and you get the fiscal picture for Uncle Sam, the United States Government in 2010:
* $2.381 Trillion: Revenue
* $3.552 Trillion: Budget
* $1.171 Trillion: Deficit
* $14.078 Trillion: Debt
* $113 Trillion: Unfunded Liabilities (Social Security, Medicare, Medicaid)
* $0.0615 Trillion ($61.5 Billion): Republican proposed budget cuts
* $0.0065 Trillion ($6.5 Billion): Democrat proposed budget cuts
Don’t expect any real tax relief. DO investigate ALL your options - while you still have some.
30+ years of fiscal irresponsibility is coming home to roost and things are going to get way uglier before they get any better.
Roy C.
Gotta love our system! Everybody has an equal opportunity. But don’t misunderstand the “equal” part. Corporate opportunity is “equal” to 99.99%, small business is “equal” to .01.
Hi Everybody!
Let’s all take a deep breath shall we.
The bottom line is this…we live in the greatest democracy that money can buy!
“The government” is us…..we the people…..going to the polls and voting for individuals to “represent” us.
The simple reality is this….we the people….are the pawns of the moneyed power brokers who buy and sell “the representatives” who ultimately make up the government.
Consequently, it is the interests of the millionaires and billionaires,( those with the real money and power) , that are put before the rest of us.
I have to agree with Harry. And just so you guys know, I’m a lot older, more experienced and seen many administrations come and go. Obama inherited a no-win situation and people like Kevin want to blame him. Why do people (read that: Republicans) always want to blame the guy in office for what was happening LOOONG before he got there?
A little recent history:
When Clinton left office the US had a budget SURPLUS but after 4 years of Bush, we had a record deficit. And during that time, the rich and corporations were getting break after break, while the upper class had its way. What’s their aim? To squeeze out the middle class and turn the USA into a third World country where they control everything. No medical insurance, low wages, no unions, etc.
Dan:
“My gripe is that they are allowed to control their niche using unfair tactics allowed by our pals in the Government…”
Don’t you mean “THEIR pals in the Government”?
Owen
Dan,
There’s no doubt that there’s a lot of corruption and that tax laws are a sham. Too bad you got nailed so hard.
You definitely need to start interviewing some accountants and financial experts who can recommend some ways to shelter and diversify your assets. Too many accountants just give bookeeping and tax prep services and you obviously need someone a bit more aggressive and creative.
Years ago, I went to DC to lobby for the travel agency industry against the antitrust actions of the major airlines. The head of the division of the Justice Department in charge of enforcement spoke to our group and said he had a staff of three people. Essentially, even though laws are on the books to stop these actions, there is nobody to prosecute violations.
GE knows they can get away with anything and they won’t be prosecuted.
I’ll leave you with this quote from Wallace Wattles in the Science of Getting Rich:
“Do not waste a lot of time thinking or talking about the shortcomings or wrong
actions of those in power. Their organization of the world has created your
opportunity; all you get really comes to you because of them. Do not rage against
corrupt politicians. If it were not for politicians we should fall into anarchy and
your opportunity would be greatly lessened.”
A different perspective
Hey, Dan… ouch 45% taxes….. oh my goodness… I hope you anticipated that… and saved for it… Which reminds me… Do you have any advice about money management as an internet marketing business man.. I mean.. running a business in general.. Maybe you might consider a doing a webinar on that theme….?
Damn, don’t remind me! It won’t be fun writing that check!
Hey Dan,
Good post but this has been going on for some time now. TAXES as we know it are really for the poor and most people never realize that the government plays the poor man for a fool. They know the mass majority of people will not think outside of the box and do something different for themselves so the consequence is tax them until they die.
As for your tax being high- if you are single, the government thinks you have no responsibility so you don’t need the money. From what I’ve seen and experienced, the more debt you have and the more you can’t take care of your children the more the government gives because they are the source and they want it that way. The government really doesn’t want us to be self sufficient and if a person tries to be by traditional means, that’s still being an employee so they don’t mind that too much. When you start listening to Robert Kiyosaki and Mark Yarnell they hate that.
Listen to 15 years left by Mark Yarnell at 15yearsleft.com. Now it’s 12 years left due to when it was recorded. The Government knows the masses has been brainwashed to be poor so they really don’t worry about it because they know most people WILL NOT try to control their own destiny. They are comfortable letting total strangers push them around like COWS. OK, I’m done talking.
LISTEN TO 15 YEARS LEFT BY MARK YARNELL.
See if you can get a hold of a CD called MURPHY’S COMMITTEE By JERRY L. CLARK ClubRhino.com. He Talks about THE COWS & THE RHINOS Cows being the poor, RHINOS being the people who goes against the norm and becomes successful.
@Dennis,
Yep. The only thing I’ve been spending on is re-investing back into the business. Also diversifying out into offline businesses is where my saved bank roll is going into.
Dan Brock
I’m still waiting to hear back from my tax man. You’re scaring the crap out of me.
Dan
I dont know why you are pissed.
GE and all the big CORPORATIONS(wink,wink) or LLC or many other structures.
You have 2 choices Pay your taxes like you just did.
or take steps like GE
Did you get your new corvette yet??
Did you go to 39 marketing conferences to las vegas which are completely tax deductible??
If your accountant does not instruct you how to be like GE time to get a new accountant
Most accountants roll over for the IRS and just want you to pay your taxes
They are kind of like pigs at the trough…hope there is no accountants here
that is why they should have a 10% flat tax..the governement will have more money
but they where would the IRS< accountants and on and on do for money..
Taxes are the “price of freedom” but tax equality is an oxymoron. The money the govt collects from income taxes probably doesn’t pay the interest on the debt we’ve sold to China; if the USA were a business, they’d be a miserable example of one. The big corporations have hobbled “our representatives” into boot licking servants of their own, and more and more are buying the media outlets to control our thinking. While political discourse is increasingly strident and uninformed, our education system and health care delivery are underfunded. Solutions are far from clear since many politicians think their role is to be obstructionist instead of constructionist.
My solution:
Govt needs to pay attention to four and only four things.
1. Education (without it we don’t have a workforce that can learn tasks or voters who can critically analyze a position). Democracy is dependent on informed voters.
2. Healthcare (without it we risk a workforce that can’t be as productive as good health would allow, costs employers down-time and new-hire costs). If we’re sick we can’t work for the bastards.
3. Infrastructure (without it we can’t get to work (roadways, bridges, etc.) or live in sanitary homes (clean water delivery, sewers,etc), etc.
4. Corporate oversight (without it they’ll screw us all and laugh down at us from the gated guarded compound on the top of the best hill
). There is a place for regulation.
Please understand I am not against corporations by any means, and I truly believe there is the potential for everyone to be rich or at least happy with their lot as long there is a perceived feeling of fairness for all. The so-called “level-playing-field.”
Right now, the inequality is screaming at the top of its lungs and taxes such as Dan’s vs GE’s is a fine example.
Hope I didn’t offend anyone, that is not my purpose, I just hope we can take a step back come election time and listen between the lines, so to speak.
Cheers, Chris
While taxes are something we can’t avoid - like death, you are right that different standards apply to big and small tax payers. Sounds pretty similar to the legal system! Oh, and isn’t it the legal system that then sorts out any dispute over taxes, mmm.
On a global scale, organisations such as the OECD linked to all the major G8-20 countries have for ages been pressuring those small island states (in the ocean or land locked) to give up their tax haven businesses on threat of massive retribution. Countries globally will soon start to charge VAT type taxes on all internet sales coming in to their jurisdiction to counter the loss of these taxes on local purchases. The retailers like Wal-Mart are being this move as they see it as a way to retain their market share.
So even though you could move to Thailand and pay a lot less in personal taxes, your business will still get hit if you sell ‘products you can touch’. I don’t thing the Wal-Marts and governments have any clue about e-products.
You’all have a nice day now, ya’hear
Dan, you’re lazy, so you say, but you’re not dumb. You operate a business(even if it is an internet
business) and you make money in your business, and you want and deserve the rewards for
prospering in your business. Well, you better look at how you have organized your business so you can benefit from being a business. Don’t whine about the big boys, that won’t change, focus on your organization and how you can make it work for you. Ask your accountant or get professional advice on the business umbrella that will best suit your needs.
There’s always a way.
Most politicians from both side of the aisle and government bureaucrats love spending other people’s money. And when it comes to bad decisions, they are not held accountable at that moment. Accountability does come at election time, if people are paying attention. By that time, for the most part, it is too late and the horses have left the barn.
Big business does employ a lot of people, but it is small business that is the backbone of this country. With that said, when it comes to finding loop holes in the tax laws, small business does not have a chance against the big corporation as we do not have a team combing the tax laws looking for loopholes. Also, there is no state or local municipality waving tax incentives in front of small business like big business gets where they get everything and the kitchen sink.
install the fair tax
I don’t begrudge corporations their profits - I simply aim to be like them! Ever since “limited liability” was invented back in the 1400′s by the Dutch, the idea has spread far and wide by those who understand how money and power go together. Its not so much the “good-ol boy network” as it is the club of those who know about how to use tax-reduction entities, and those who don’t. Historically, this has been an open secret - open to those who really want to know, but a secret to those who can’t get beyond the legal jargon and mystique.
A Supreme Court Justice back in the 1930′s said that no one is required to pay more than his or her share of legally-owed taxes. That is still true today. I used to fight the IRS tooth and nail as a regular filer until I realized I can simply increase my knowledge of legal tax avoidance - NOT tax evasion - and pay less of my “fair share.” I set up several corporations and LLCs in my state (GA) where it’s very cheap and easy to do online. I’m the only officer, or have friends be officers or the Registered Agent. If I wanted more privacy, I set up an LLC, or have all the corporate stock owned by a Nevada corporation, but that’s more trouble than I want to expend right now.
Those who set up really successful corporations set all the legal parameters to be optimal, e.g., corporate residence in the Isle of Man, domiciled in Andorra, doing business in Panama, and contract employees outsourced to the Phillippines or India. Most successful corporations don’t leaglly TOUCH high-tax countries except for activities that allow them the most write-offs, like labor, parts, rent, or materials. These days you can do the same thing.
Even though I reside and am domiciled in Georgia, and have to pay myself a “reasonable” salary, I have so many writeoffs from the C and S-corps that it more than pays me to do this. One can write off everything - inlcuding Medical plans in a C-corp. Chances are, you are paying for your own medical insurance now out of AFTER tax profits instead of using the same money as a writeoff.
If and when my income starts to shoot up, I will start playing the same game the big boys do. Until then, simply start simple - and S-corps or LLCs are the best way to save BIG if your personal income is high . . . and it sounds like yours is.
Dan,
You certainly got one thing right, hosting your own wordpress on your own domain. This is one of the greatest ways to quickly increase your web presence. I suggest everyone here think about making their own site, no matter what their hobbies or occupations are. WordPress is able to handle any type of website you need to run, with the nearly infinite plug-ins available.
I wrote an article at setupwordpress.net/hostgator explaining how to get FREE hosting, FREE WordPress setup, and a FREE domain today.
Dan you are the Man! you always have something new. I got you ebook from amazon it is great. Thank you
Ok, yes, we live in a Democracy-thank God that we can speak freely as to what’s on our minds. Hence the fact that Dan is able to do that as well. To all of you who think that he should just “put up and shut up” or move “if he doesn’t like the situation”….c’mon folks! Our government is not in favor of the little guy (yes, I speak from experience as it has been this way for years-big business is favored. Period.) No one is really speaking up about this due to so many other concerns, but it’s time to pay attention to this MAJOR problem.
As to what to do about it-yes, Dan you can look at states that don’t have state income tax-I live in Texas which is included in that group. We can also choose to ask more questions the next time an election roles around and we are voting—not just the president, but congress & the senate as well.
The EPA is also starting to regulate carbon emissions charging huge fees to power plants. The only power plants that are exempt are GE plants. How is that fair to other businesses? They get a FREE PASS! GE has some friends in Government and Obama is one of them.
WOW! Lots of comments here! Some were useful insights! I won’t get into a political debate or hop up on any soapbox. Just a few thoughts to vent….
I think it is pretty crooked how small businesses and those self-employed get penalized with the self-employment tax. Being self-employed takes a lot if hard work and ingenuity and should be rewarded. I understand we all have to pay taxes, but why should we pay MORE than the big corporations?
Haha…45%…you should count your blessings since you have made it to that tax bracket.
Many people in the US are still trying to get into a tax bracket. Stop whining and spend some of that 45% and hire a good tax accountant, a financial consultant, and a lawyer. You may spend thousands on their services per year but they will save you millions in the long run.
It seems to me that you are not incurring enough business expenses Dan. Surely you need a new business sofa each year, a PA and regular business flights around the globe? The goal should be minimal paper profit.
I suggest getting a better accountant or CPA, one that’s an expert in small business. There’s no reason you should have to pay this much. And whatever you have to pay him or her for their services will be waaaay less than what you just had to pay the IRS. Interview several. Ask them how much they typically save their clients, how to best set up your biz to save the most in taxes, etc. It will be worth the effort. Yes big corporations get some advantages that a smaller business may not, but more than likely a lot of the reason the “little guy” pays a lot more is because they didn’t hire a good accountant.
For a bunch of internet marketers, I can’t BELIEVE no one has mentioned Mike Dillard and his amazing work with his new company, The Elevation Group. His entire goal is teaching people how to best invest their money, how to build wealth, and how to keep as much of the money you make as you can! NO ONE mentioned this!!! Come on! His webinars will blow your mind, and what he reveals about the state of our economy in the US is right on…
That being said, the US is not a government, it’s a corporation, and it’s been filing bankruptcy every 7 years since 1932. This is not new. So no wonder it favors big corporations - it IS one.
Guess I’m not affected then, because my websites don’t make money.
Hey Dan,
You really did light the fire under everyones ass on this one. Yea! I’m with you on this one. Everyones President except mine because I didn’t vote for him. He made all these promises. All I heard was how he was going to make the rich pay more taxes and one of the largest corporations in America GE did not have to pay a much if any. I guess they are not rich.
And by the way @ David commenting on Wal-Mart. Sounds like another Wal-Mart hater. It’s all about competition. I guess you don’t worry about Target and all the other retailers. I guess you also think Wal-Mart took all the business away from Mom and Pop also. How about Home Depot and Lowes knocking out all the small lumber and hardware companies out. In case no one notice our world is getting bigger and all those people can’t fit in a little store.
I think everyone is barking up the wrong tree. If we think our tax system is unfair then why don’t we vote the dogs out and make everyone pay a flat tax of 10%. I tell you what the real problem is. These politicians forgot where they came from. We the people gave them a job and they abuse it. What happened to our country? None of these politicians have any balls to do the right thing.
I never seen so many people think the government owes them something. My Dad was around in the depression years and if you got a free handout like cheese or bread, you had to do a little work in return. Now, just hold your handout and the government will help without payment back. We cannot do this anymore. We the people should help those in real need of food and shelter thru our churches, private funds and so forth.
This is what the government should do.
1. protect our country
2. keep our independence
3. stay out of our private lives.
and follow our constitution.
I’m sorry, but I’m pissed. I work hard for my money and I’m tired of all these free loaders and everyone that thinks our government owes them something.
God Bless America
He knows we need it now more than ever.
Funny. I was just talking about this this morning. I have have some money owed in America for products that someone purchased, about $330. And they tell me that there is $111 in withholding tax. What the heck is Withholding tax?
I never really understood what the people meant but that just doesn’t add up to me at all.
I am also in Canada, and it is very bad here. the money I am expecting is from America. Will find out tomorrow what goes on with it.
Thanks Dan for sharing this info. Yes it has been going on for awhile. Now on another note, please I have been trying for so long to get your customer service to help me out on a pixel tracking problem and no one is responding to me!!
And I checked in the program of yours that I purchased and couldn’t find the info. Please send me an email so I can get off the ground in my online business. I haven’t made a Dollar yet honestly!!!
Ajit.
Set up your own company and write off some of your taxes. Fair and square.
Neuro Linguistic Programming has been the norm for many years now.
We are all being led into a vortex where there is no escape.
We are all just ‘Worker Drones’ with limited imagination.
WAKE UP!!! ….. Smell the coffee!!
Read - ‘The Human Survival Blueprint’ … It’s FREE! from the link above.
P.S. Dan …. I Like how you’re using the ‘Confrontation’ rule here
Recall European history. The divisions between rich and poor were extreme
A spectre haunted the world.Courtesy of the British Museum. The spectre was a document
“The Communist Manifesto”-penned by a certain Karl Marx.”The state shall wither away” Wrong.
“All property is theft”-if you were Sioux,-any Native American- you were murdered by an invading
colonial premise.Then ” All property is theft”applied in most cases.The white House was built by
another class of exploitation.Slavery. Labour was taken from Africa and exploited until the
time when it was noticeably inhumane..Now sweatshops fill Walmart with slave labour.
Children taken from the Philopines, become company property .And Walmart fail to feed indentured child labour. They cannot afford to buy food. Sleeping in Walmart dorms
-they are outside the range of any human intervention.
They die at their sewing machines.
Somewhere it is the continuity of Big Business that in creating
tax it has always been punitive on the poor.
The times are such that given enough push Paris may regroup. We have the technology.
When you lean on a certain section of a social grouping there will
be a regrouping. That reformation will seek to change by refuting the NLP-zombie non-think
thinking pure Orwellian double speak.
When that groups occurs,each member must be ready to die.
. MalcolmX was.”By any means possible”. Liberation for Afro-American culture.
Now is the time not to be squeamish-but to look at the face of government in the eye and see the vanishing dollars and the sophisticated corruption inbuilt into Halliburton and the groupings of the overly wealthy.
In Paris,the struggle was between proletarian and bourgoisie. That,essentially is a similar
political parcelling in the US of A. 2011..
It will never got better-the debt wreckage cannot be repaid.It is an Empire about to crumble.
When these serious polarities occur,then a people’s army begins to be lobbied,
In France the sustaining images of the revolution were the bourgeosie being hung by the
their intestines, hanging from street lamps.
High selective targetting would be a demonstration in
USA of serious intentionality to fight.
Or will you prefer to succumb to this model for vast disparity between those services?
Services that cannot be gained because of the reaper poverty?.
Camus wrote that poverty is like a fortress without a drawbridge.
Iniquity in the hands of the very rich? Is this the model that you really aspire to?
Even distribution of wealth and the emasculation of the Corporate entities
by us, The People.
Do not donate your power so that the status Quo continues.
If this disparity is not brought to the Town hall,then that town hall will not exist.
In its place will be the only place left as history shows us.
Let us not subject such a problematic set of equations to an armed,emotional outcome.
We have seen that. Put away all guns. And realise the power of the people is the power
of speech,peaceful assembly,dignity and show our power at gatherings where we are saying
“give peace a chance”. Let music,poetry,be the lights of many people.And lead us home to a new
freedom in the age of suffering,this media allowing us to reach each other.
That is not the same as the older people know.
Those who are vets. Those who require community.The needs of the
abandoned and forgotten.Then the real riches are in our hands;
the words of Jefferson,Emerson.
Dreyfus in his model “On Solidarity”.
Become active! participate! Positive!
Perform random acts of extra-ordinary courage and kindness.
Drop NLP. Study Logic.Deeply.
Learn critical rationalism. And speak. Speak from hearts that admit no fear and are free,
able to aid the down-trodden,the sick,the needy-yes -and the poor. The beggar at the gate.
It’s clear most of us accept paying tax if we want roads and schools and police and all the other trimmings of stable, safe societies. What is infuriating and grossly unfair is how large corporations and wealthy individuals manage to evade their just contribution.
Especially today is this unfairness manifest, as those that control corporations reward themselves out of all proportion while the majority struggle between the pincers of raised taxes, rising prices and looming unemployment.
By all means give tax breaks and incentives to the real innovators and drivers of progress which benefit the world as a whole. But how many of these overpaid spivs who’ve engineered economic chaos would that include?
Hey Dan,
I got a solution that everyone in a down turning economy should religiously apply to their lives and incomes….”Abundance is the Only True Guarantee of Success”!
Think BIGGER than the biggest,baddest, money sucking corporation…
Hey, this is coming from Canada, where I haven’t paid a cent in personal income taxes in over twenty years….and made millions in Tax Free income…
The weather is fine up here…come and join me.
Just wait till China calls in their markers for the Trillions of dollars US owes them.
Within a year or two the S&%#@t will hit the fan…get out now, while the gettin’s good!
Good Luck All Americans….your going to need it!
Dan,
I couldn’t agree more about government corruption and class warfare. I’ve spoken on government corruption in my own Stop Smoking niche. Our government has long abandoned it’s constitutional role and decided it’s sole function is to funnel money from those on the outside to those on the inside.
I feel your pain!
Regards,
Art
I had to repost on this topic. I follow Diane Kennedy, who was Robert Kyosaki’s CPA for many, many years. I incorporate her work along with Your Entity Solutions and Warren Taryle whom I mentioned yesterday.
Diane posted this very timely article on her blog about taxes and corporations. Check it out here:
https://www.usataxaid.com/shop/Tricks-and-Traps-of-C-Corporations.html
John
I’m reminded of the old saying;”Money is like manure - if you put it in a big pile it sticks. If you spread it around, it makes things grow.” Wall Street must really be stinking by now…
Wall Street is sitting on trillion of dollars and what we hear from the right is that WS is afraid to spend money to start new businesses because of “uncertainty in the market..” Since when has there ever been certainty in starting a small business? Every new small business owner knows and understands that risk is the price we pay for opportunity.
I live in MD, too and to file on my LLC requires $300 just to file the freakin’ thing and that’s on top of what I’m required to pay for income and personal property. I don;t like it but what I like even less is that children are going hungry, schools are underfunded, and health care is out of reach for too many families. Life ain’t easy here in the United States of the Chamber of Commerce and the Koch brothers.
My apologies, I sent the link to her sales page, here is the text of the message I received:
Hi JOHN:
Richard and I watched our son David surf this past weekend. That’s not anything really remarkable except for the fact that the wind was bitter cold. We were bundled up in sweaters and blankets. David had a wet suit, but he’s always the first one to complain if he’s cold normally.
Amazing how once he caught that first wave, he didn’t want to stop. It didn’t matter how cold the wind was. Have you ever noticed that when you have something you really want, obstacles become smaller?
It doesn’t matter if you’re tackling a big wave or a new challenge in your business, it’s the same thing. If you know what you want and you want it badly enough, you’re prepared to take massive action to achieve those goals.
Taking massive action in your business could mean learning about something new, gaining a new capability, learning a new technology, creating a system or upgrading your advisors. If you’re interested in saving taxes, it could mean changing a lot about your tax strategy in the next few years. And that all starts with knowledge.
This week at USTaxAid, we’re focusing on business structures and especially C Corporations. Learn the Tricks and Traps of C Corporations today!
For years, C Corporations were the darling of the business world. Small, medium and big businesses all used C Corporations. Then, in 1986, the benefits of C Corporations for some of the population went away. That was further eroded when tax cuts came at the personal level. It was now better in many cases to have flow-through entities like S Corporations for your business.
But, that’s all about to change. Tax cuts expire this year. New taxes are coming your way thanks to the Health Care Bill. But that’s all at the personal level. What tax increases are in store for C Corporations? None. Absolutely nothing is planned to increase the taxes. In fact, Pres Obama’s latest budget calls for C Corporation tax rates to go DOWN not up.
Look at this another way: Have you ever thought that the tax system was unfair? Guess what. It is. But it’s not weighted in favor of the rich. It’s weighted in favor of the business owner. If you have a business, no matter what size, just do what the big boys do and you can get the same kind of tax breaks.
And right now, a lot of them are moving back to C Corporations, if they ever even left them.
C Corporations have two big advantages: (1) Better benefits for the shareholder-employee and (2) Their own tax rate schedule that is often lower than the personal tax rate schedules. Both of those advantages are about to become even bigger when personal tax rates go up and tax deductible benefits are reduced at the personal level.
Is a C Corporation for everyone? Absolutely not! In fact, there are some real traps you need to avoid. For example, a C Corporation can be a bad idea if you have:
* Personal Holding Company income,
* Professional Services Corporation, or
* Accumulated Earnings Tax.
A C Corporation can be fantastic, but it’s not the best solution for every situation.
You can avoid the traps if you plan first. I first started working with tax and accounting issues for corporations over 30 years ago in Nevada. That was back in the glory days of C Corporations. Those days are coming back. Get a jump on the C Corporation secrets and strategies you’re going to want to use for your business.
If you are the type of person who wants to be one step ahead in your business and you’re not afraid to take massive action to create the business you want, then this might be the very best time for your business.
And while you’re making more money (or working on your plan to do so), don’t forget to update your tax plan too. That might mean a C Corporation. Click on Tricks and Traps of C Corporations to pick up real-life strategies and information you can use right now, even if you don’t yet have a C Corporation.
Warmly,
Diane Kennedy - CPA, Tax Strategist
What about the VAT ?? When I order a clickbank product nowadays I have to pay VAT since I have a VAT number (in Belgium) I am not ”consuming” the product in the USA but here in Europe.So I need to pay the VAT over here and NOT in the USA… it stinks !
Well Dan, did you expect this can of worms when you make this post?
Actually I do enjoy seeing good comments and feedback on posts, it keeps us all on our game, and makes us all pause for just a second before we hit that “publish” button.
Look forward to a continued relationship with you and your sites.
George
Ajit I believe that you can apply for a refund - there is an ad that runs frequently on Canadian T.V. about people who get hit with “with-holding tax” in Vegas. Try contacting them. You must declared your income tax status prior to making a profit in the States.
If you work through any of the big U.S corporations. like C.J. , Target etc always fill out the tax form by entering 000000000 (9 zeros) where it asks for tax information.
HI Dan,
I appreciate the article, because this is one of the biggest advantages of having a home-based business.
When I ask people, “What is your biggest expense?” Most reply, mortgage or rent…..
NO, It is your taxes. But the sad truth is no one is taught how to work taxes to their advantage. We have been educated go to school and get a job for a reason.
Income tax is the highest percentage of tax, then it is capital gains, then passive income.
Do you know Warren Buffet only makes something like $80,000 a year, there is a clue
Another thing that was an eye opener for me, was most accountants know nothing about
home-based business taxes. If you are interested I can give you some great ones, that specialize in home-based business.
Knowledge=Money
Wishing you the best,
Jeff Faldalen
Hi Dan,
Thanks for the great topic. Loving the comments and links. Waking up is hard to do. The powers that be have been at this scheme for a very long time.
Hey Mike: you don’t want the millions of Americans asking for a hand out? When they had jobs they were tax payers and they weren’t asking for a handout. They’re supposed to ask churches and charities? Millions of Americans have lost they’re jobs, have taken pay cuts and are paying more for food, gas, just about everything. Seems like their “extra” income for charities and the like just isn’t what it used to be…
Has anyone checked out what NAFTA has been doing for us lately. Or maybe consider that corporate giant GE builds our nuke plants. See nukefree.org for latest news on that. Consider what we’ll do when our next catastrophe hits.
So you don’t like all these corporations raking in big bucks tax free. Our laws, by way of the Constitution and Supreme Court green light it all the way. How? The corporations buy their way in through their highly paid corporate lobbyists. In 2010 GE spent $39,000,000 on lobbying and the top 10 corporations spent over $117,000,000 to protect their interests. Check out http://www.opensecrets.org/news/ and see how much of their “tax free” profits they spent to maintain control of their special interests. Oh, and on the same page you’ll see a piece about our corporately financed election campaigns..
Campaign finance is just another instrument of manipulation corporations and their supporters use to control, abuse and dumb down our country - and it’s totally legal. check out http://www.truth-out.org/zach-carter-campaign-cash-tea-party-vows-to-block-campaign-finance-reform64814
Health insurance corporations, Wall Street and the banksters are major contributors to campaign finance. Got money? Get your it your way. So you don’t want health care reform? Costs too much? You’re footing the bill by way of your health insurance premiums to support their tax free profit system, their lobbyists and their bought and paid for politicians. check out http://www.acrreform.org/
Follow the money - not all the misinformation no one ever takes the time to fact check.
As we keep fooling ourselves into thinking it’s going to get better the rich are only getting richer. Take a look at how the top 5% holds more than half this country’s wealth: http://www.epi.org/economic_snapshots/entry/top_5_holds_more_than_half_of_the_countrys_wealth/
While we can rightfully complain about our middle class tax problems the biggest debt problem looms large in congress. Here’s an article that debunks some of the economic talking points going on in DC. You know, cut spending vs increase taxes? http://robertreich.org/post/4031113622
I like democracy in government. I don’t like corporate control and corruption.
They were probably hoping we would all stay in a deep sleep. I’m glad we’re waking up to what’s going on in plain sight.
One guy said they want to destroy the middle class? Why would they want to destroy the middle class? Or increase the gap between the rich and the poor? I have not heard of one single economic theory that says that’s a good idea. Someone here needs to read a high school economics textbook, if you can’t afford college.
Hello,
This is one of those times that I really like Canada. Register a business, lots of right-offs and the tax works out to about 25 - 30% of income.
Thank you.
*******DAN, THIS IS FOR YOUR INFO, NOT NECESSARILY FOR THIS BLOG *******
if you’re serious about keeping any of the money you’re smart enough to make now & in the future read this:
http://www.sovereignman.com/expat/singapore-cutting-taxes-again?a_aid=CRX
(FYI, super affiliate Ewen Chia is from Singapore. I’ve seen sovereignman.com appear on
Ryan Deiss’s Facebook screen captures. Kevin Wilke has been ‘experimenting’ with
living/working in Brazil. Mere coincidences… Yeah, Right! )
Other places are CUTTING taxes to promote growth, wealth & entrepreneurship.
US governments at all levels (muni/state/fed) are broke-ass, spendthrift, debt addicts and your money is their next “hit”.
You’re a tax cow to be milked. Only about 50% of Americans actually pay any fed taxes (net) now, so they have to be screwed extra hard.
You can spend the rest of your life grabbing your ankles for the IRS and giving ’til it hurts, or you can investigate other options.
Whatever you do… do it legally or your tax Gestapo will fuck you over in ways you wouldn’t even think were possible.
Guys, Look at this article about the federal reserve and how it’s the biggest Ponzi Scheme this world has ever seen and designed to strip the wealth from the citizens of this country.
http://theeconomiccollapseblog.com/archives/19-reasons-why-the-federal-reserve-is-at-the-heart-of-our-economic-problems
Cheers,
Jan
As an internet marketer and tired of all the attacks on small business…I have taken up gold mining during 4-5 months of the year. This is my retirement as I dig it up out of the ground it is very valuable mineral. I’m not talking about a little panning either…I’m talking about finding high grade deposits of gold and mining it with large equipment on Gov. land or partnering with a land owner.
You guys think the attacks on small business is bad, just research all the attacks against small scale miners. They don’t want anyone making a living off the land PERIOD! From loggers to miners to ranchers, etc.
Though I still have my gold for back up…I just love internet marketing…its like mining, but on the internet instead!
Good article Dan!
Sorry Kevin. I agree with Harry although much of the spending in this administration I don’t agree with. My personal opinion I think income taxes are legalized theft. Isn’t it odd the Government wants
people to believe paying taxes is patriotic. If you’re against taxes you aren’t patriotic. I’m surprised no one has mentioned the Fair Tax that is drawing more and more support as people find out about it. Look it up and judge it yourself. No American should have any part of their income stolen from them whether it be business profits the poor or the rich. Concerning the middle class, my Dad predicted 30 years ago that this country would some day only have two classes of people, the rich and the poor. It seems he was right on. Revolution? It could happen, Yeh. I’ve exercised my right to Freedom of Speech. I commend Dan for speaking out whether you agree with him or not.