Monday, February 2, 2009
Tax Cuts for Small Business
Much economic discussion in the last few weeks has centered on tax cuts and the stimulus package. Conservatives have decried the tax cuts for people who pay no taxes; even though, low income wage earners pay into Social Security. This tax cut would also help the small business person, especially, sole proprietors.
I am a sole proprietor. Many years I owe no income tax, but always have to pay the full amount of my Social Security contribution, both the employer's contribution and the employee's. In a bad year, this is a real burden. If the Congress wanted to really help the smallest of businesses, then they would do more than give a $500 dollar tax rebate.
For any sole proprietor paying no income tax, but incurring a Social Security contribution over $1000.00, a rebate of half their Social Security tax would be a boost. This money would not be saved, but put immediately into the economy. In my case, I would buy a new computer.
If Republics really wanted to help small business, they would support this rebate. If someone starting a small business knew that the Social Security contribution would not be any worse than that of a wage earner if they had large expenses or a bad year, then more might venture into business. Those small businesses suffering by the downturn would also find relief, perhaps enough to survive this bad economy. All in all, this would be a real tax cut for small business.
Photo by stickwithjosh