Politics, Taxes, and Your Business in 2010

Political partisanship seems to have grown into a national pastime over the last decade. But no matter which side of the fence you roam, if you’re a business owner, you’re likely wary of the trends shaping up in government. Taxes, they are a coming.

From 2009 through 2010 the federal government has hired, or will hire, more than 10,000 new auditors, collectors and criminal investigators. These new employees will make sure that business owners, among others pay their fair share. Fair, that sounds good, right? Well, if you’re a business owner who’s ever been audited, “fair” may not be the first thing that comes to mind. Starting in February 2010, the IRS will launch employment tax audits of 5,000 random returns.

Increased tax revenue is needed to pay for the government’s pet projects: Cap and Trade, Health Care Reform and more. And although the President has hit a few roadblocks recently, he, along with the leaders of Congress don’t seem the types to simply back down in the face of public opinion. For instance, even if Cap and Trade doesn’t go through, an equally “effective” alternative would probably take its place in the form of a tax on emissions. This would cost less for the government to employ. No matter which is implemented, they’ll both result in higher costs for doing business. A similar scenario will most likely play out with Health Care Reform. No matter what version passes, you, the business owner, will probably end up footing a big part of the bill. Can you afford that at a time like this? Even if you’re thrown a crumb for hiring a new employee, does a small break on your taxes offset the expense for hiring a full-time employee? That represents one of the few crumbs being promised small business by the current administration.

What can you do about it? Well, this is America. Your voice can be heard if you scream loud enough, and long enough. If you feel that you represent the backbone of the American economy, and that higher taxes threaten your very existence, consider screaming. But why, you ask... why should I waste my time? It won’t matter what I tell my local congressman or senator. A largely ineffective stimulus package was passed... another is likely on the way in some shape or form... my state and local taxes are on the rise... what can I really accomplish by yelling at my government?

A lot, actually. Recent elections in the Northeast demonstrate that your voice, even in the form of your vote, do a lot. The message that Americans will not stand idly by while the government tries to tighten its grip seems to be resonating with at least a few politicians. Consider California where a bi-partisan commission recently recommended a tax overhaul that included slashing individual, business, and sales taxes. This may not be a direct response to the recent elections but it does show that at least some in government understand how to help, not hurt, American business. If you shout loud enough, maybe more of your elected representatives will get the message.

And if they don’t, you can always just kick ‘em out.