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No, the typical small business startup is the worker who invests his life savings in the startup, and maybe mortgages his home. Once that is done, his future is inextricably linked to the small business, and if it fails, there is no way to get his original investment back out. Unless, as you say, he can resell the light bulbs. There are plenty of vacant buildings and offices to attest to the worthlessness of the wreckage of a failed business.
The downside of risk is of much greater magnitude than the upside. For a great majority of people, losing $100K would mean permanent poverty and a ruined life, but the gain of $100K is just a better car.
the small business person that "invested" 100K hoping only to make 100K over a long period of time is a fool. Ex - someone's entire goal is to "be their own boss", so they make less as a business person than they were making for someone else. That's great for them, so long as that investment generates enough income to pay their personal bills. But let's not decry their ignorance.
This is one of the reasons I was pulling my hair out when Trump announced that he was abolishing the Death Tax and cutting income taxes on the surface when actually introducing new hidden taxes (like limiting deductions from Mortgages and state/local taxes.)
At least in theory, I see the fairest system of taxes would be a low income tax and a high death tax to compensate for the low income tax revenues. Low income taxes incentivize people to work harder and earn more since they get to keep more of it. Inheritance is what you receive because you got lucky and was born into a rich family.
Of course, in a perfect world, we would not have taxes period. But taxes are a necessary evil and I would target inheritance first before even touching income if I were president.
YES, this. This country treats wealth very, very well. It treats income very poorly.
Sorry - nobody needs 2 yachts, I don't care how hard your dad worked.
Who are you to determine what someone else "needs"? Are you certain that someone else wouldn't think you have "too many" of some particular item? What, precisely, is the harm caused by someone owning two yachts instead of one?
At the same time, total compensation has gone up much faster than wages. Wages are the largest slice of the total compensation pie, but employer-paid health insurance has been increasing rapidly over the past 20 years. What is happening is that employers are directing compensation increases into increasing health insurance premiums rather than into wages, and employees are better off for it, as health insurance is funded with pre-tax dollars.
In the past several years, with the economy booming and employment going up, we still are not seeing much evidence of broad-based wage inflation. Most economists point to formerly discouraged workers coming back into the workforce. At some point, we will see wage inflation.
I'm circling back around to read the comments and this is a very good point. However, while the coverage that an employee gets is much more expensive for the employer to pay out than it was 20 years ago, the coverage (including much more $ that the employee has to pay for deductibles and out of pocket expenses) is almost always inferior to what it was 20 years ago. Health insurance is a farce nowadays. Every year it seems the coverage gets worse for more money. Time and time again, everyone that I've spoken to has this exact experience.
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Originally Posted by GeoffD
I love this "tax man steals 1/2 your income" nonsense.
Colorado so 4.63% flat state income tax. 7.65% in payroll taxes. You have to be making pretty big money to be at a 20% effective Federal income tax rate. I'd peg you at more like 10%. You don't pay anything remotely approaching 50% of your income in taxes. With this post content, I'd be shocked if it was more than 25%.
You also have add Social Security and Medicare (which equal 7.65 percent), property taxes (which in some areas can be many thousands of dollars a year on even a modest home), car taxes, sales tax, and a higher tax rate for some unprotected classes of people, such as a single filer who has to pay a much higher rate a married couple on the same income. It can add up quickly.
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But taxes are a necessary evil and I would target inheritance first before even touching income if I were president.
