Smile if you pay more taxes


Unquestionably, there is progress. The average American now pays out twice as much in taxes as he formerly got in wages. – H. L. Mencken (1880 – 1956)

I recently became bit despondent about the state of my business. I felt like I was taking one step forwards, and one step back: every time I earned a little bit more, I was taxed a little bit more. I wondered how the government thought I could ever make it if I just worked to fill thier coffers, leaving little for me and my family to get by on.

So I went to discuss this issue with my accountant. I explained the situation, and asked him what he thought. He said “May you be blessed that your tax rate only continues to go up.” Thanks. He explained: “A higher tax rate means that you are earning more. It is always worth it to earn more, and pay more taxes.”

That theoretically makes sense, but here’s something I’d like to throw out to other small business owners: a growing business tends to bring along with it a growing amount of work. If your business continues to grow, you will probably need to hire people to help out with the workload. More workers means more expenses. So what you end up with is a growing income and growing expenses, and after all is said and done, and you’ve calculated your profit, you may find that you’re just running on the small business treadmill. And the taxes certainly don’t help.

Or do I have it all shockingly wrong, and I should be smiling while I write out the checks?