Posted on 01/31/2014 10:52:55 AM PST by GarthVader
Eight different taxes. That’s what I had to compute every time I wrote a paycheck back when I was running a small business on the side. Eight taxes: •Federal income tax •State income tax •Federal unemployment tax •State unemployment tax •Medicare – employer’s portion •Medicare – employee’s portion •FICA – employer’s portion •FICA – employee’s portion
At least I “only” had to send the payments to four different government agencies.
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Yes, the governments provided some nice hefty books. The IRS provided a 67 page two column guide. My state’s employer guide was only 59 pages. Keep in mind that these were just for the purpose of computing and delivering withholding taxes. The (sole proprietorship) business itself had its own tax guides – for income, FICA, Medicare, and sales taxes.
I think I spent more time dealing with government paperwork/payments than my part time employee spent working for the business. I definitely would have better off doing the work myself, save that I wanted to do the experiment. Jobless people take note.
For full time business owners with full time employees, this overhead is a smaller fraction of doing business, but it is still a significant headache. A big corporation like Wal-Mart can hire specialists to handle payroll headaches. The really big ones can optimize the process and even have their own specialized software designed. For a Mom and Pop business, or a small startup, these headaches occupy the owner(s). Keep this in mind all ye anti-Wal-Mart/buy local lefties. All this government-imposed overhead gives the big corporations an advantage over locally owned businesses.
And in the case of computing payroll taxes, it is all very unnecessary!
(Excerpt) Read more at financeandfreedom.org ...
Your suggestion is a good one for dealing with the current system. But we could do better.
The Fair Tax has much to be said for it, but I doubt it can be passed any time soon. The proposal I linked to has the possibility of bipartisan support — rather useful when the other side controls the presidency.
Hmmm. Not that I ever did something like the following, but how about this: I ask someone if they would consider doing certain tasks, such as raking mowing and clearing gutters, and in return they can borrow a specified debit card and use x-amount on the card and return it the next day. The debit card is limited in how much it has in the account so it is in little danger of being misused, and if the person borrowing it misuses it in any way then they will never again get the opportunity to repeat their actions and word will spread about their unreliability.
No contracts are signed, no "employment" is established, and both parties come away with experiences for the better. Kind of like the way a couple of friends worked out how to not-sell a firearm some years ago...
Until they get caught not paying taxes and tell the IRS they were your employee.
Guess who gets to pay all the taxes then?
I agree with your point but am a bit jaded. The govt will ALWAYS side with the ‘employee’ or at least in 99.99% of cases.
The contract protects you because if you don’t have one then the “employee” can make any claim. Plus they are tracking every single dollar.
Oh I agree its a crappy solution but the best I could come up with. Next try to get $5 million in liability insurance and tell them you work with sensitive data.
Well, good to know, but any claim made must be substantiated. No written contract, no proof. Even the courts say that an oral contract is only worth the paper it is written on.
A debit card is usually placed under one name. If someone else uses it, say a family member (or friend/acquaintance) any transactions will take place on the card bearing that name and no others, so any tracking will only show that and nothing else. Give it to a niece to run to the store to buy some milk (and herself a bottle of pop) and the transaction is still tracked only to that one name, so I think anyone with a bit of common sense will know that they can not realistically call that "employment".
Years ago when I had to deposit payroll taxes, I was able to make that deposit at 3:59 in the afternoon on the date they were due. Now after our gubmint decreed we need to deposit them electronically at super fast lightning speed, my deposit needs to be transmitted 2-3 days early for “processing”.
Still not “income”. Same as if I allowed a niece to borrow a vehicle for a set period of time (to go to the store) in order to pick up that milk (and her bottle of pop) in exchange for using the debit card for the groceries. Closest definition would be a form of barter, and since the debit card would be the means to purchase the necessary item(s), which would not be in her name, no income can be claimed. Same as in the other example.
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