Small Business Person *not* Making $200,000 Per Year
I am a small business person now. I have my own consulting practice and two clients. I live comfortably and make enough money, although I could always use more. I make nowhere near $200,000 per year in realized income. If I did, I really wouldn’t mind sharing more of my income with the federal government, as long as they were using it wisely.
Realizing or showing a $200,000 personal income usually means you’re spending too much. Your fixed expenses are high. Maybe you’re living in a million dollar home with a big mortgage. Maybe you have an expensive car you’re paying for. Something is causing you to spend a lot of money. Because I know that if you don’t need to realize a high income you won’t. You can put as much as $42,000 year year in a 401k. You can hold money in your business if it is a corporation (and pay corporate taxes on it), unless you have a subchapter S corp. Even still, you have so many business expense choices to keep you from realizing an income as high as $200,000.
The real killer to the small business person is administration time, the stuff we don’t know, and the stuff that could change. If you want to do me a favor, get rid of the complexity so that I don’t have to spend so much time working on my business administration and trying to figure out what the tax laws really say. Do I really need to put an attorney on retainer or use a tax accountant? I cannot possibly afford either’s fees, so I have to do it myself. And that takes time away from billing my client and making more money for my business. This brings down my income much more than a tax increase would.
So to the politicians who say that the small business guy making $200,000 can’t afford a tax increase, you’re probably right. But it’s his own fault that he can’t afford it. Otherwise he wouldn’t be realizing that much income. The vast majority of small business people, though, make nowhere near this. Some are by choice but most are because they are struggling to get by.
If you really want to help the small business person, the ones who provide most jobs to the economy, make it easier for us to do business.