Thursday, October 16, 2008

Very Small Business

Apparently there are small businesses and then there are very small businesses. Maybe we should have a new category called Tiny Business or something like that. A lot of businesses start out as Family businesses. The Husband generally does the work he knows how to do and the Wife answers the phone, makes appointments and manages the books. Then they take on an employee. This is where it gets complicated. Payroll taxes, workman's compensation insurance, accountant fees, etc. This is where many otherwise law abiding American citizens become crooks. They pay the employee off the books. If they become a "small business" they can put the employees on the books and hire the accountant to help them file the income tax forms they need. Our complicated tax system leads many otherwise honest people down the road of crime. I normally advise people to work for others as long as they can rather than try to start their own business. Once you commit one crime it's easier to commit the next. The only difference is degree. As much as large corporations are apparently in need of regulation, tiny businesses are in need of exemptions. They should not have to be responsible for collecting taxes for free for the government; nor should they be liable for being the weapon of last resort against illegal immigrants. Most "tiny" businesses fail within 3 years. Those that survive and grow can eventually shoulder more responsibility but while they are "tiny" they need protection more than regulation.

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