Saturday, January 03, 2009

Financial Stringencies and Govt. Anti Self-Employment Tax Regime

Dayjob busy-ness has not so far been directly affected
by the oppressive financial climate
but peoples' ability to pay for their work on time has been hit and hard.

Government policies of taxing the self employed on the basis
of invoices delivered rather than only on actual
payments received, hits self employed businesses like a double whammy - no
cash received for making tax payments yet still fully liable to pay tax on time
for invoices delivered, even when they are not actually paid.

There is a mechanism for recouping tax if the customer fails to pay
because of bankruptcy but that is so slow and cumbersome that any
self employed business which depends on that for fair taxation
would itself risk bankruptcy during the process.

True the ballot box provides an occasional chance to see
other policies at work instead of the current nonsensical ones.
But those who benefit from the state's interventions have no
incentive to change the status quo. Radical change is therefore
only likely when so many depend on the state's welfare
that the state itself cannot cope and the whole thing implodes a
bit like the Madoff con that the media is commenting on.

At least then the new phoenix state could radically change policies.

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