An Opinion On “ROI: How to Avoid Paying Income Taxes”
January 31st, 2012
Ms Bendel’s comment is totally uninformed – at least in regard to the ranks of entrepreneurs who are engaged in technical and professional businesses that are watched, reported, and audited sometimes to near-extinction. Entrepreneurial tax cheating (at the sub-megabuck level, at least) is a myth propagated by intoxicated 9-to-fivers late in the happy-hour and encouraged by lefty political cant that argues taxes are never high enough and then annually repeated at budget time by tax agencies in government whose budgets gain from the extra staffing this false concept claims to justify.
I have studied small entrepreneurs at length and have seen that few, if any in the above categories have any opportunity or inclination to under-report business income. More often they say they OVERPAY taxes in various categories because it is cheaper to do than than to account for the small items paid out of pocket, and the large items that require a team building activities of tax experts to sort out.
What many entrepreneurs face is the certainty of probing, picayune and idiosyncratic tax audits every couple of years by the IRS — consuming enough time to likely assure loss of a significant portion of the year’s earnings – or next year’s.
I have heard the same accusation aimed at small shopkeepers, itinerant trades, etc. Possibly there may be some creative accounting in those marginally distinctive business retail categories where a fair fraction of the businesses fail every year for lack of profit, but not my area of experience. A key distinction is that most entrepreneurs are trying to grow their business into something better and bigger. They are fighting the clocks of personal career span, old age, and evolving markets, and most in that position really can’t be bothered with messing around stealing pennies on the dollar when they really want to generate more business and pay MORE taxes as the necessary consequence.
Would be very interesting, and instructive, to compare the tax avoidance results for the million or so (often struggling) actuak entrepreneurs in the US with those of our 20 million illegal immigrants (also struggling) and the businesses that employ them.
Recommended: employee motivation, language skills.
Entry Filed under: Business