When listening to the debates and watching videos of politicians talking about business owners etc. today I came accross a video of Barak Obama stating that his tax plan would only increase taxes on corporations from 36% to 39%.  At first glance I thought, heck that isn’t so bad.  But then it hit me…. WHAT THE CRAP?!?!?!  A business owner has to pay 39% taxes? This has nothing to do with Barak Obama or his political stance, I am upset about the amount of taxation going on here.  40%?!?!?!?!  How could that be fair for ANYONE.  If I was paying 40% taxes (which by the way when you add up all the taxes I pay for the year with all the taxes that are imposed to me additionally such as gasoline tax, sales tax, taxes on imported goods, environental taxes etc. I probably do pay close to that) I would be outraged.  Why should a business owner be any different.

I have owned my own business before (when I was 12 I washed cars for people and made $6 a car) but since I was 12 and made less than the minimum tax level for the year I was not required to pay anything.  (I think I made about $500 that summer/year).  Not only does the business have to pay its corporate taxes, but the business owner then has to pay taxes when he/she is paid.  That is double taxation and in a bad way.  If I was to own my business today with the taxes as high as they are I would have to think twice about a number of things.  What is my incentive to:

a. start a new company

b. grow my company

c. make a good profit for my company

Thinking from my business background and education (business minor in college at BYU) I thought to myself, business owners only have a few options available when it comes to an exit strategy – sell, go public, etc.  Well, if taxes are 36% or any large number, I would try to make sure my business NEVER made a profit.  How would I do that?  I would reinvest EVERYTHING I could into the business i.e. advertising, marketing programs, sales incentives etc. to make the business grow.  That way I would pay no taxes.  My payoff would come not every year with massive taxation each year, but I would get my big payday one time when I sold the company.  Then I would get hit with a one time massive taxation and invest all of my funds into bonds and other VERY low tax liability investments – here is a quote from Bonds and Taxes – How to Benefit from Tax-Free Income – By Ken Little, about.com:

“Municipal Bonds – Municipals or munis are free of federal income tax and if you buy them in the state where you live, are free of state and local taxes. These are sometimes called “triple free.”

I for one beleive that high taxation offers less incentive for people to start new businesses and is a poor economic policy to promote growth, jobs and the spirit of entreprenurism in the US.  Anyway, this is a bit of a rant, but please think about it.  If you wanted to start your own business and 40% of your profit was taxed would you feel happy about it?  I am tired of working for 4 months of the year just to pay my taxes.  I would much rather work a few months less each year and spend more time with my family.

The bailout is simply a bad policy that is a political stunt to try and help in the upcoming elections.  Is it really a good policy to take bad debt from an institution and tack it on to the debt of each American?  Sure this bandaid may help the economy stabalize a month or two faster (its about to get worse before it gets better, dont expect huge gains this year in the market, housing prices etc.).
The fact of the matter is by bailing out the economy today, all we have done is increased the amount of fake money in circulation which will compound the underlying problems with our monetary policy.  If you want to be truly free we have to cut spending by our government (and get rid of a large amount of it), lower taxes (we will have lots of extra money when we get rid of it) and focus on the future of America.  A bandaid today when we need a heart transplant really wont get us that far in the long run.  We need to make major changes.

All I can say is this… Can I play a 5 minute clip from an old cartoon I used to watch?  Is anyone out therelistening?

Click on the link below to watch:

CLICK HERE TO WATCH – Is congress allowed to watch cartoons?