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Comment by nodesocket | Hacker News Reader

> It's a tax cut for billionaires bought and paid for by the GOP donor class

I am a small business owner setup as a LLC single member company and the new cap will be a positive for me. It will reduce my tax burden allowing me to buy more software from companies, hire, expand, increase advertising spending, etc. I am a very real case, and there are lots of other small business owners like me who are certainly not billionaires. In fact most bay area tech company employees make more than I do. I find it somewhat hypocritical that employees at Google and Facebook that are making 200K+ are complaining about tax reform.

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There is nothing hypocritical about opposing a tax 'reform' plan that adds $1.5 TRILLION to the deficit, doubly so if this bill raises my taxes. If my tax burden goes up to pay for government programs, than I am generally (but not unconditionally) okay with that. But if my tax burden goes up so that billionaires and corporations can get a tax cut while also negatively impacting the financial health of our country, than it would be absurd not to strongly oppose the reform bill.

Instead of supporting this irresponsible piece of legislation, how about getting in touch with your local representatives and let them know that you believe that the tax burden on small businesses needs to be addressed, but that this particular piece of legislation is not the way to do it.

Money that you spend on buying software, hiring etc isn’t generally taxable anyway. A business is generally taxed on income, not revenue.

You also have to ask, where is the money coming from? In this case, it would appear to be through radically increasing the deficit. There will ultimately be consequences to that (for instance, in a few years, as the US’s credit rating comes under pressure, increased repayments may have to be met with increases on income tax, which you will pay).

> Money that you spend on buying software, hiring etc isn’t generally taxable anyway. A business is generally taxed on income, not revenue.

But reducing my quarterly and annual tax liabilies allows me to spend more on these things because there is more cash for the business at the end of the day.

This assumes that you need to take out a constant amount of after-tax profit, which may be the case for some types of small business. However, it would be possible, and perhaps more appropriate, to introduce some form of tax credit to deal with that; this would be far, far cheaper.

It’s hard to overemphasise how expensive the proposed plans are. You’re looking at adding over a trillion to the deficit. Bush’s tax cuts are estimated to have cost about 1.5 trillion... for his entire term (plus a trillion or so make in Obama’s term when he was forced to extend most of them).

If you're growing your company based on cash-flow you're slowly strangling your company to death.

If it's profitable, leverage it. You don't have to go nuts and borrow millions, but if you can generate a better return on debt than the interest rate, which shouldn't be too hard given today's interest rates, you can build your business faster.

If you're aggressively expanding your company you'll be channelling any profits back into it, so you're going to barely break-even from a tax perspective and your tax payments will be negligible.

If you're doing this and not seeing the right tax benefits already, get a better accountant.

I've seen this "get a better accountant" argument posted on HN quite a bit. But, aren't liberals outraged about the tax loopholes for the "weathly"? We shouldn't need the loopholes, just reduce the rates.

No, not in this case. It’s very deliberate that companies pay tax on profit, not revenue; it’s not really a loophole. This gives the company an incentive to put the money into growth rather than taking profit and paying dividends, especially when it’s smallish.

You could theoretically have a system where companies pay tax on revenue, but realistically it’d cause massive upheaval and greatly disincentivise starting new businesses and growing current ones.

No. Hiring competent accountants to help you run your company more efficiently is good. What people have an issue with is when the ultra-rich hire accountants who specialize in tax avoidance.

You should pay your fair share of tax. You shouldn't pay way more tax than you need to just because you're doing your own accounting badly or because your accountant is a moron.

A good accountant will do a lot more than deal with taxes. They'll point out how you can better finance your operation, how you can capitalize on assets you have to save on interest costs.

Managing cash-flow, expenses and accounts receivable is a very important job. If nobody's paying attention to this you can run your company aground without even knowing it.

So what I mean is if your accountant can't handle basic tax code, your accountant needs to be fired and replaced because you're probably getting killed in other departments as well.

Interestingly this was the premise behind Brownback's tax plan in Kansas:

Small businesses were being held back by their tax burden. They wanted to invest more capital in their businesses, to scale up and hire more people. They had untapped opportunities in the market that they could not pursue because they didn't have the money that they would have if their taxes were lower.

Here's how that worked out: http://thehill.com/homenews/state-watch/336684-kansas-legisl...

  Ratings agencies downgraded Kansas's bonds, forcing the 
  state to pay more in borrowing costs. Funding for state 
  school programs fell, and the Kansas Supreme Court ruled 
  the state government was not adequately funding schools. 
  Earlier this year, legislators grappled with a budget 
  deficit of almost $900 million.

  In 2016, voters kicked out a handful of anti-tax 
  Republicans, in favor of challengers who backed higher 
  taxes, despite Brownback's opposition.

> Small businesses were being held back by their tax burden.

It's never taxes on profits that holds small businesses back. It's all the annoying things you need to do to employ people[1]. Best thing the government could do for small businesses is provide healthcare and decent pensions for workers. Which would be two fewer things for a business owner to worry about. Having the state employment agency handle payroll would also really really help. (For a small business payroll is a big headache always)

[1] Also important is lack of access to capital and uneven income.

What would be really great is if there were no income or payroll taxes. If you want to work for someone or hire someone you, just exchange money for labor. It would be so liberating. Maybe start income tax at $1 million like the old days and just let us lower income people get to work.

>Best thing the government could do for small businesses is provide healthcare and decent pensions for workers.

The lack of these things is a competitive advantage for larger companies with the resources to negotiate these benefits in behalf of their employees

Maybe, but by the way, if you live in a state that provides state services using state taxes, your state-and-local taxes will no longer be deductible.

So the GOP bill comes off as a "fuck you" to a lot of us, since they kinda want to double-tax us for which state we live in.

Coincidentally those states often vote blue.

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