Do politicians never learn? California, like many other states, just passed a law mandating online companies (like Amazon.com) collect state sales tax if their “presence” in the state includes affiliate marketers.
The Supreme Court has already ruled that a state can’t mandate collection of sales tax unless a company is physically within its boundaries. So, whenever a state passes some silly law that says an online affiliate constitutes a corporation’s physical presence, Amazon tells all those poor affiliates that they can’t be affiliates anymore.
So what happens to the state? NO MORE INCOME TAXES FROM THE REVENUE ON AFFILIATE SALES!
California, which has about the worst budget deficit in the country, just shut down 25,000 sources of income tax. Why do you think so many companies are leaving California? Why have California and other liberal states lost population over the last few decades?
Because you can’t do business in California without the government as an unwanted partner. An overbearing, micromanaging, ignorant partner to boot. (A State Board of Equalization? Really? I’m just saying.)
I’ve written about this often, but the stupidity of politicians is truly mind-boggling.
It’s like when the federal government passed a special 10% surtax on any recreational boats over $100,000. What happened? The boat manufacturing business lost 20,000 jobs. With that loss of income tax, the government ended up losing money.
When a government gets too greedy, the economy goes underground. Look at Greece. 30% of its economy is “off the books”. When taxes get too high people find some way around them or just move somewhere else.
So why do governments do it? Because of the way government does accounting. Say that in your state 10 million cartons of cigarettes are sold per month. If you raise taxes by $1.00 a carton, the state gets an extra $10 million a month, right? WRONG!
People quit smoking. The politicians even say that’s why they’re doing it, to make people quit smoking (for their own good, of course, that’s why they’re called sin taxes). Or people start smoking pipes, or buy their cigarettes in the next state, or on the black market. The government KNOWS that will happen.
If that’s the case, why do they figure on collecting $10 million/month? It’s called “static accounting”. They don’t take human nature into account.
As a small business person, you know if you triple your prices you’re NOT going to triple your revenue. Why? Because people quit buying if the price is too high. If you start counting on that income you are going to be in for a rude awakening. It’s called the law of diminishing returns.
It’s the same thing with taxes only politicians are just too damn stupid to figure it out. They all just pat each other on the back and start spending the money they think they’re going to get.
This week President Obama stated that businesses don’t like added regulations “because it eats into their profits”. Well, duh! How does the government think it makes money? Through JOBS. Through BUSINESS. And the government is doing everything it can to ruin both while complaining of those ‘greedy businessmen” and companies “hoarding” cash.
Let me ask you something, would you go to Las Vegas and gamble your money if the pit boss changed the rules every 10 minutes? I don’t think so.
I don’t know about you, but I am so tired of hearing about greedy businessmen during the last 2 years. How about a few news stories on greedy governments?
Further reading:
The silly California law (PDF)
Amazon ends deal with 25,000 California websites
[Update Oct. 7, 2011]
Amazon has worked out a deal with the California legislature to hold off for a year while Amazon tries to prod the federal government to come up with a nationwide solution regarding online sales taxes (yeah, good luck with that). Amazon then sent emails to former California affiliates asking them to re-up..
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It used to be “home away from home”. But if you have a home office, what do you do if you occasionally need a real office?
Let’s face it, there are a few drawbacks to running a business from your home office – having your home address on business cards, having meetings with clients at your house, and sometimes it just gets lonely.
What do you do if you sometimes need a real office or want to interact with other entrepreneurs? How about a real office that costs as little as $100/month?
It’s called co-working. That’s where you lease part of a communal office that provides a desk, conference area, Internet access, business mailing address, or even a receptionist for a daily or monthly fee.
A recent article from Florida Trend talks about the co-working facilities in my state.
Depending on the location and package, co-workers will have access to a conference table with other co-workers or their own desk for the day, for as little as $100 a month. High-speed internet access and coffee are standard amenities; for extra fees, co-workers can add a receptionist and mailing address.
These shared offices generally have added business services like web design or marketing assistance to help pay the bills.
Do a Google search for ‘coworking’ or ‘shared office space’ in your area. You might be surprised..
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Just a quick security checklist for all small business offices and office computers…
- A hardware firewall (router) protecting all business computers – can be upgraded to a SMB security device for larger offices
- Encrypted Wi-Fi Network
- Employee Training
- Don’t download or install software
- Limit use of USB drives
- Don’t divulge passwords
The following should be on all business computers…
- Secure Profile Login
- Security Suite
- Should cover all types of malware and optionally include secure web browsing (software checks for known malware sites)
- Subscription valid and virus database updated daily
- Full computer scan at least weekly
- Updated Software
- A good tool for this is Secunia (http://secunia.com/)
- Data Backup System
The following should also be on all business laptops and smartphones although they can also be on office computers if susceptible to theft…
- File Encryption – like TrueCrypt (http://www.truecrypt.org/)
- Password Software protecting all passwords with a master password – like LastPass (http://lastpass.com) or RoboForm (http://www.roboform.com/)
- Optional: LoJack (http://www.absolute.com/en/lojackforlaptops/) or other tracking software
- Optional: BIOS password
This is just a minimum. There are other options like disabling USB ports on employee computers, restricting employees to Limited User accounts, restricting Internet access, requiring re-login to Windows after a screensaver kicks in, etc.
How does your business stack up?.
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Connecticut is not quite there yet, but they’re considering it. They’re the latest in a growing number of states attempting to force Amazon.com and other large Internet retailers to collect state sales tax due to a “nexus” in their states composed of affiliate marketers.
Connecticut, like several other states, is trying to find its way around a 1992 U.S. Supreme Court decision that held a state cannot force businesses to collect sales taxes unless they have a physical presence within that state.
So, the poor Connectcuttian(?) sitting in his home office that puts an affiliate link on his web site means that Amazon has a physical presence in their state? Continue reading .
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Lots of you are looking at starting a home office, especially with the latest recession. We’ll look at the three main components of a home office – the space, the furniture and the technology.
You can start small and expand later or outfit your home office with the latest and greatest – the main idea is a functional and comfortable work environment.
Home Office Space
Unless you live alone, you really want your home office to be in a separate room – with a door that can be closed. It keeps out noise and distractions, allows for privacy and is easier to write off on your taxes.
A spare bedroom or small den should work fine. It should also be well lit with several lamps (one for the desk) rather than a bright overhead light. The consensus today is a light and airy decor rather than the dark oak paneling of yore.
If you don’t have a spare room, at least try to outline an office space. Use a corner of the family room. Have a couple of lamps to light the space. Consider a folding screen to block off the area.
Home Office Furniture
Office supply stores will have “office suites”, often for $1000 or more. They’re worth checking out even if you can’t afford one just to see how they’re laid out. If you have to piecemeal your office here’s what you need. Continue reading .
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With the end of the year coming up it’s time to review what has happened last year and what will happen next year.
Harvard Business School asks CEO’s to write a memo to their Board each year summarizing lessons learned and plans for the new year. For a home office or small business owner you may not have a Board of Directors, but the principle remains the same.
So, what I recommend is writing a memo to yourself.
I’ve taken the liberty of modifying the list from Harvard, so here are the five things I recommend you actually write down in a memo…
1. Lessons learned in the past year
It’s okay if strategies or tactics didn’t work out as long as you realize why they didn’t work and correct it in the future. By the same token, write down what did work.
2. Top priorities for the next year
You should have 3 – 5 goals for the next year. Don’t add a new goal during the year unless it is replacing one has been completed.
3. Set parameters for those goals
Actually create a timeline for your objectives with earliest and latest completion dates and the top and bottom limits you want to spend to achieve them.
4. Lay out strategies
Sure, your goal is to make more money, but how? Create a new product, expand your mail list, improve customer service?
5. Review your memo regularly
Don’t just write it and forget it. Drag it out every month and see where you are. Are you on schedule? If one is near completion, what’s next?
There’s all sorts of gurus and coaches out there that will tell you to write your goals down. Why? Because it works! It only takes a few minutes and is well worth your time..
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