September 23, 2010

Does Your Head Hurt?

Be thankful that many portions of the health insurance bill take effect today.  Why it is being so hotly contested when there are so many benefits for so many, I just don't understand.  See, I suffer from a pre-existing condition, as do you.   It is known as naivety.  Think about it.

When someone says "small business," what comes to mind?  A "mom and pop" business?  Lemonade stand; home-based business; or, as the SBA defines it-- a business with less than 500 employees?  Surely, these owners/entrepreneurs deserve a tax break, right?  So, what about entities whose receipts are in the millions?  Those who have over 40 thousand employees?  Never gave it any thought, right? 

Well, boys and girls, I learned that there is no legal definition of a small business and that multi-million corporations can be "small businesses".  How is that, Missy?  All depends on your tax structure.  See, the reason why you and I aren't rich, can't afford to follow our dreams, etc., is because: 1) we don't have accountants who know the tax code inside out and 2) we don't have friends in high places.

These are considered small businesses:  Bechtel; Chicago Tribune; Price Waterhouse Coopers; Pres. Obama; Sen. McCain's wife, among others.  All are structured as an S Corporation.  You can click on the link and read the definition.  Philip Anschutz owns a portion of  multiple soccer teams, including the LA Galaxy, Chicago Fire, Houston Dynamo, San Jose Earthquakes, New York / New Jersey Metro Stars, and the Kansas City Wizards. In addition, Anschutz owns stakes in the LA Lakers, LA Kings, and venues including the Staples Center, The O2 Arena (London), and the Home Depot Center. Anschutz also invests in family films such as The Chronicles of Narnia.  He is a small business owner.

Now, I'm not against anyone making money; however, I do have a problem when my legislators pontificate about how small business owners will be hurt if the Bush tax cuts are allowed to expire.  They ARE NOT talking about the small business owners that we had in mind.  And, to add insult to injury, the tax laws are structured so that these businesses (who can afford to pay their taxes, mind you) are allowed to defer their taxes for 10 to 20 years or pay no taxes at all.  Excuse many of us, the little people, have run afoul of IRS because of a simple mistake, the inability to pay the tax due. Were you allowed to defer your payments?  Given a pass? I know that I wasn't.  I was given a payment plan. Missed the due date and had my account wiped out in one fell swoop. Checks bounced everywhere.

I would still be wallowing in my ignorance and partially buying the party line if I hadn't watched Countdown last night. I searched frantically for the transcript to post because I knew you wouldn't believe little ol' naive me.  Read it for yourself:  Big Business Turns Small for Tax Purposes.  And, if it's too much to read, watch the clip:

Is your head hurting?

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