Summary of 2011 Tax Hikes

Where are tax rates going in 2011? If you guessed “up”, you’re absolutely correct. If Congress doesn’t do anything about the Bush tax cuts which are slated to expire in 2011 here’s what happens.

The estate tax, 0% this year, will go to 55% on assets above a million dollars. Now, your estate has already been taxed. You’ve paid income taxes, property taxes, dividend taxes, capital gains taxes and you’re sitting on what’s left over and the government still wants over half of what you own when you die.

George Steinbrenner’s heirs saved $500 million dollars – that’s $500 million they wouldn’t have if George had died 6 months later.

The income tax rates, which Democrats keep insisting are “tax breaks for the wealthiest Americans” will change as follows:

• 10% goes to 15% – If you pay a 10% tax rate you are not one the “wealthiest Americans” and your tax rate is going up 50%!
• 25% goes to 28% – a 12% increase
• 28% goes to 31% – a 10.7% increase
• 33% goes to 36% – a 9% increase
• 35% goes to 39.6% – a 13% increase

Because most small business owners in America pay personal income tax rates on their business profits, this affects your bottom line. And that’s just for starters… Read more.
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Obamacare Adds A Flood Of 1099′s

This got my attention. In a column by Deroy Murdoch he explained one of the many consequences of Obamacare. More paperwork for us small business owners.

Specifically, ANY vendor you spend more than $600 a year on will require an IRS form 1099 starting in 2012. Whether it’s a graphics artist or Best Buy, it doesn’t matter.

According to Rep. Dan Lungren (R, Calif.)

They will have additional accounting costs that will consume time and money,” Lungren tells [Murdoch]. “They will be required to keep a running tab with every vendor, all the way from restaurants to anything they buy — a piece of equipment, an airline ticket, or a hotel room. And when they reach the $600 threshold, they will be required to file 1099s for each of those vendors.

What is Home Depot going to do with the million 1099′s it receives from all those contractors out there?

Lungren also points out that small business owners will likely do more business with big box stores rather than local businesses to alleviate the paperwork.

My question is what the hell does this have to do with health care? Now we’re starting to find out what was in those 2600 pages.

You know what else is in there?

Atop this, the Galen Institute’s Grace-Marie Turner reports that Obamacare will require employers to evaluate their health plans’ affordability by calculating each employee’s household income, not just that worker’s individual wages. This likely will involve, at a minimum, collecting income declarations from every staff member.

You’ll also have to find out whether they have an 18-26 year old at home and whether they need health care from your company.

Can the government be a bigger pain in the ass of small businesses?

“YES, WE CAN”.
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Government vs. Small Business

I try to give solid advice to budding entrepreneurs looking to start an online business. But every so often I am going to drag out the soap box, stand on it and shout, like a bearded radical inciting the citizens in the town square.

First of all, the U.S. Government, especially now, is NOT a friend of small business. It is turning into the most anti-capitalist, anti-profit, anti-business government I’ve ever seen.

I’m not even going to how we got into the current economic crises, but the links below will give you an idea…

2000 – The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities

The Clinton administration has turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation’s banks.

2004 – Ex-SEC Official Blames Agency for Blow-Up

[An SEC] rule change in 2004 led to the failure of Lehman Brothers, Bear Stearns, and Merrill Lynch.

The SEC allowed five firms — the three that have collapsed plus Goldman Sachs and Morgan Stanley — to more than double the leverage they were allowed to keep on their balance sheets and remove discounts that had been applied to the assets they had been required to keep to protect them from defaults.

2008 – Barney’s Rubble

Mr. [Congressman Barney] Frank was publicly arguing for an increase in the size of their [Fannie Mae & Freddy Mac's] combined $1.4 trillion portfolios right up to the day they were bailed out. Even now, after he’s been proven wrong about a taxpayer guarantee, he opposes Treasury’s planned reduction in the size of the portfolios starting in 2010…

The resulting economic crises has put the government in control of investment banks, insurance companies, auto companies and over half of the home mortgages in America.

The government strong-armed Bank of America into paying 18 billion dollars too much for Merrill Lynch, told major banks they WOULD participate in TARP whether they wanted to or not, and short-changed Chrysler bondholders in favor of the UAW, then complained the bondholders were being greedy.

Next step – health care. A lot has happened since I wrote about the health care plan last month. An estimated 1.5 trillion dollars over 10 years, perhaps now whittled down to only a trillion, to “fix” something that over 70% of Americans are satisfied with.

Read more.
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Small Business Health Savings Accounts

With all the hullabaloo over the new Obama health care proposals, there’s one health insurance solution for U.S. small business owners that is often overlooked – Health Savings Accounts.

Health Savings Accounts are a savings account, similar to an IRA, combined with a high deductible health plan. Passed by Congress in 2003 and in effect as of January 1, 2004, it allows both you and any employees signed up to be the decision makers in both health care and retirement planning.

There are two books I’ve read called Health Savings Accounts For Small Businesses and Individuals by Madison Groves and The New Health Insurance Solution by Paul Zane Pilzer that lay everything out, but here are the highlights… Read more.
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US Health Care Proposal – Help or Hurt Small Business?

The latest news coming from Capitol Hill does not look good for American small businesses. Why? The proposed health care bill, while still being worked out, has some interesting provisions.

First, who’s going to pay for the estimated 1.5 trillion dollars over the next 10 years?

Businesses with less more than 25 employees will be mandated to pay for their workers’ health care or pay $750 per full time and $375 per part time employee to the government.

That”s before the government figures out that won’t pay for their mandate. Then, they may follow Massachusetts’ lead and drop the mandate to small businesses with 10 or more employees.

What does that mean?

Read more.
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