Can we talk about a Maximum Wage?

[haele]

41. If you have a machine shop you are putting money into, the money for the business is a deduction

Look, the only feasible maximum wage "plan" in this country is to return the tax levels to pre-1980 levels and tweak from there as to what is and is not to be considered taxable income in a progressive manner. Even with tweaking, it's not going to hurt most small businesses and employers; it didn't hurt them before. When I was growing up and beginning my working career, small businesses thrived with all sorts of regulations and an income tax upper limit of 71% (1970) - and there were scads of small businesses, investment opportunities, and corporate/service operations opening up all over the country - businesses that lasted for years so long as the business owner didn't run it into the ground.

I ran a small side business off the kitchen table for two years before I called it quits in 2000. I filed only personal income taxes, like many small businesses. While I may have made a couple thousand a year, I spent a couple thousand a year on my business, and while I only filed personal income taxes, I didn't make enough after costson my personal business to have shown enough of a return in income/profit to have it affect my normal taxes based off Wages/Reservist Pay income in the slightest.
If I had made more than what it cost me to run my business, I might have seen my taxes go up some; but I would have also had to have had my income go up an equivalent amount.

But for my primary job, I've worked out of a shop when I was running ship electronic installations. I've had to crunch numbers for both the costs of the job, and the cost of shop support and general/administrative costs. Shop Equipment, Inventory, Office Supplies, Rents, Payroll and Consulting costs, Insurance, Regulatory Compliance, State and Local Taxes and Fees, Accounts Receivable and Payable movement, Depreciation costs - all equally tax-deductible for a private businessperson.

If you own a small business, whether or not you pay taxes on it as part of your income tax or under an incorporation, you really need to take some accounting and finance courses so you don't screw up your personal taxes and "blame the government" because you're being taxed out of existence.

Or you can admit that most bad things that happen in small businesses that aren't the government's fault but the market's fault or the businessman's fault. 75% or so of all small businesses will normally fail or be gobbled up by competitors within the first five years.
Small business owners are usually their own worse enemies, especially those who are using their business as a personal ATM and a profit generator instead of coaxing the business along and taking a real financial hit for several years before the business can establish and compete. The focus of the small business owner should not be to make a profit, but to grow the business - and that's a major component of the business strategy that is evident in pretty much every successful small businesses.
Even with a focus on growth, most small businesses still face being doomed by poor location, over-saturation or a lack in their market and market segments, or just starting up at the wrong time or season.

My home business was basically killed over-saturation of like businesses in the local market and by the internet. Graphics Design is a really tough business anyway, and while it was something I loved and was talented enough at that I had a few customers, it would never be able to pay the mortgage, whereas my job as an installation PM could. I saw what was happening, weighed my options, and bailed before my business became a money pit.

As a side, now that I'm getting closer to retirement and the kidlet - who can't hold down a retail job but enjoys doing lots of artsy-craftsy stuff - has expressed an interest, I've been thinking of starting a small store front manufacturing co-op (farmer's market jewelry, ceramics/enameling and other knick-nacks) business.
I'm pretty sure that being in a semi-depressed immigrant neighborhood, I can also rent storage and work space to other home crafters and artists if she flakes out - I've seen a lot of very talented women who are stuck at home who might want to get some extra income.
The space rental, utilities, equipment and equipment maintenance, and cleaning/toxic storage and handling will be the greatest costs; and all of those are tax-deductible, whether you incorporate or run it as a personal business using a 1040 to pay your taxes.
I've got my degree in business and program management, and I know about the EPA, OSHA, and other local business regulations (working shipyards so long has really given me an insight on how they work) so I'm thinking while I'm still gainfully employed and bringing home a livable wage income, I might be able to make a go out of it if the family (husband especially) can also help.

That is, so long as I don't expect we will personally make a lot of money the first five or six years, and hope just to be close to breaking even. However, if it takes off and I make gobs of money - paying taxes is no big deal. Taxes end up paying for the infrastructure that helps me grow my business, and even if I had to pay 50% - 70% to the government because "I got rich", that's the cost of doing business in a fair, level playing field where my customers have a chance to pay for my goods because they're not going to be spending every additional dollar to survive.

Anyway, to get back to the point, a "Maximum Wage" tax policy would not adversely affect a small business owner who has a legitimate business plan and strategy, and a good accountant and has reasonable expectations of profit and costs. Unless, of course, s/he is running a management/life coach firm out of a back "office" of the family Mc-Mansion, earning hundreds of thousands of dollars of income in fees and stock, while trying to deduct the Lamborghini, the 45 ft yacht, gym and spa membership, maid service, shopping trips to Neiman Marcus, and the home mortgage payment as "business deductions". That person would be affected by income tax levels back to the levels of the 1960's.

And yes, I met a couple of those when I did a little small business sales survey work for MCI back in the 90's.
Coastal San Diego is full of little "small business" management and development firms like that; people who make millions of dollars as "go betweens" for rich idiots.

The other thing that most of these "Overtaxed" Free Market advocates overlook is that without government regulation to keep things fair and on the "up and up", the Free Market becomes little more than a Plutocratic dream where the gap between wealth and the average worker keeps growing.
If you want all the money going to those 85 individuals who will own all access to goods and services - and write the rules for their own benefit, you aren't going to have any small businesspeople who can start their businesses without paying a Mafia-like shakedown to whatever Monopoly owns all the rights to starting a business in that region. Talk about centralization of power.
Monopolies control their own pricing, can lie with impunity, stifle innovation and stomp on any competition that may arise. There is no choice in a total free-market system.

And that's why the idea of "Maximum Wages" and allowing for high Maximum Wage Income rates - to allow money to circulate throughout all the markets and population instead of having it collect at the top levels of income and pray they will allow it to trickle down enough to keep the inevitable revolution from starting.

Starving, homeless people have no qualms killing or destroying if there's a chance they might get food and shelter. And it doesn't matter if "it's their own fault" they didn't have bootstraps or it was their choice not to use the ones they might have had. So it behooves those who have much to ensure there aren't a lot of starving or homeless that want. Which means either a government steps in (equitable taxation to provide services), or you just kill the lot of them like feral animals (which is a function of organized crime - turn the desperate poor into drug addicts, prostitutes, soldiers, or mules, then kill them or let them die when they stop providing revenue to the gang).

Haele