Authored by William Robert Barber
Tax credits for small businesses… hmm, sounds like a positive; of course the benefits of such credits apply only to those small businesses that pay taxes on a percentage of their profits. However, the overwhelming majorities of small businesses do not make a profit vis-à-vis their business; instead, adhering to the standard of Generally Accepted Accounting Principles (GAAP), most of these small businesses do not make a profit. Their gross profits are expressed as deduction under the line item “cost of business”. Small business owners report and pay taxes on their federal, and (where applicable) state, city, and county personal income statement. No tax credits allowed…
Certainly, there is a minority of small businesses that actually report profits. The Obama administration is offering — under certain restrictions, terms, and conditions — tax credits for these businesses. How very nice: the companies that need no tax deduction because they actually are profitable have a shot at receiving some tax credits. And here I thought the object of the tax code in America was founded on a sham of sensibility and fairness.
By far the largest employer in America is the small business owner; he or she must risk capital and variant resources in order to create an entrepreneurial opportunity. Most of these entrepreneurs fail. Suffering the loss of capital as well as resource, they lost their shot at good fortune. A few, very few, beat the odds by establishing a profitable business and thrive. Naturally, whether it can do so over a measured period of time, is another question of risk.
Business in the best of times is tough; in the worst of times it is almost impossible to harvest a living wage, much less demonstrate profitability. If the dynamics of entrepreneurial engagement was not challenging enough, the competition of much larger adversaries are enough to bury the most tenacious of risk takers. Big business has all the capital and resource advantages over small business and for the most part benefits from the unflinching support of governments. This is an economic factual, a truism, a conundrum for the small business advocates. If one considers that it is small business that sustains the overwhelming number of the employed, one would presume that government would acquiesce directly to the needs.
One would think that government would understand and directly aid and assist small businesses by significantly reducing their tax encumbrances, administrative & regulatory burden, and leave this dynamic segment of America alone. But it just can’t seem to do the simple and obvious; instead, government dances around the required with nonsensical rhetoric about tax credits and promises of loosening up bank lending standards. In other words, this current government’s ideas and action solutions, like the many that preceded it, just get in the way…
The Obamas of the world cry out that insurance companies, health service entities, and oil/gasoline distributors are making excessive profits. Of course no politicians can define excessive profits; besides, does it not follow that excessive profits must mean excessive taxes?
A little less than half of the taxpaying public pays no individual federal income taxes; 1% suffers the single largest percentage of our nation’s individual income taxes… How’s this for fairness?
From time to time I do wonder why we have Ivy League institutions. Considering the legislation passed by congresses over these many years since 1789 and considering the incompetence of regulators within the SEC, and the stupidity of financially enhancing Freddie and Fannie’s authority so to fulfill compliance with HUD directives, why did all these politicians attend Harvard, Princeton, or Yale?
Well, then there is the situation in Arizona. Imagine the audacity of a state acting because the federal government will not? When the federal government picks and chooses which laws to enforce, there is definitely going to be friction and in this particular, the willful discombobulating of facts. The coupling of the two federal government perversions of what is lawful will always result in a dysfunction of our system of governess. Either change the law or enforce it; anything other then applying one or the other will abate lawfulness.