The Coronavirus Delays
Small Business Tax Compliance Burdens
& Crony Capitalism
Small Business Tax Compliance Burdens
& Crony Capitalism
For this year the filing deadline for individual tax returns has been extended from April 15th to July 15th. However, this isn’t a reduction of the tax compliance burden. It’s only a delay in having to comply with a burden created by the complexity of the federal income tax code. It’s also a very clear example of Crony Capitalism at its worst.
SCORE is a 501(c)(3) nonprofit organization and a resource partner of the U.S. Small Business Administration (SBA). According to its website, SCORE’s volunteers assisted in the creation of almost 20,000 new businesses in 2019. They surveyed small businesses regarding the effect tax compliance has on them. In an article entitled “Tax Reform’s Impact on Small Business”, the following data from that survey was reported:
- 34% take over 40 hours a year preparing federal tax info
- 18% take between 21-40 hours preparing federal tax info
- 15% spend more than $10,000 in hard costs in attempting to comply with the tax code
- 16% spend between $5,000-$10,000 in hard costs
- 35% said federal tax policies will have a negative effect on their businesses in 2020
The present income tax code presents a real and totally unnecessary burden for small businesses and for all the rest of us. Why is it still not only tolerated but endorsed by the Ruling Class?
Crony Capitalism & The Explanation For The Complexity
Crony capitalism is when government and big business work together to get special benefits which aren’t available to anyone else. This can happen at the local level for example when large contributors get zoning approvals denied to others. It also happens at the national level and explains why there are so many very well paid lobbyists in the Washington, D.C. area.
However, the basic truth of Crony Capitalism is the wealthy and the larger companies benefit from it, and the rest of us pay for it.
Will there still be Crony Capitalism under The FAIRtax? Unfortunately, probably so. The income/payroll tax system is only one form of Crony Capitalism, but it’s a valuable one. The reason it’s so valuable is most of the Crony Capitalism taking place is hidden from all but a few of us. It’s “hidden in plain sight” in provisions of the federal income tax code but, like the rest of the tax code, it’s very hard for all but a very select few to comprehend.
You’ll hear occasional outcries in the press about special privileges some businesses get through Crony Capitalism, but for the most part, no one even realizes it’s going on.
How It Is Done
Tax professionals obviously get paid for helping their clients comply with the income/payroll tax law. However, some of their largest fees are earned by helping their clients pay less federal taxes than most other companies pay. These professionals work for large companies and wealthy people, because only they can afford the hefty fees.
There is a very remunerative game played between the writers of the income tax code and these tax professionals. The writers of the law are generally the staff of the House Ways & Means Committee and the Senate Finance Committee. Another fact not often revealed is often many of the provisions of the income tax code are “suggested” and even actually drafted by the same tax professionals who will then use the new provisions to assist their clients.
Once the new provisions become law, then the tax professionals find a way to ensure their clients pay less federal income taxes than other similarly situated companies who don’t pay for their advice.
If the tax professionals are successful, then the IRS demands the law be changed to prevent those companies, or others like them, from getting the tax advantage. The destructive game starts all over again and the income tax code becomes even more complex.
Another little-known fact is many of the staff members writing the new even more complex laws will soon be employed by the very tax professionals they were seeking to stop from exploiting the income tax code. Who better to find ways to take advantage of the new legal provisions than the people who wrote them?
The more difficult a law is to understand, the more the wealthy and large businesses are willing to pay for one of the few people who supposedly can understand it. This is why a relatively small group of people are so interested in making the federal income tax code more and more complicated.
Why do big businesses tolerate such complex laws? Because they:
- Can afford to pay for the professional help needed to navigate them
- Can save a lot in federal income taxes other companies will have to pay
- Know smaller companies can’t afford the same professional help
- Believe they will receive a benefit not available to others
These increasingly complex laws apply to all businesses, large and small, which makes it more difficult for all but the wealthiest to comply. The Crony Capitalists oppose The FAIRtax because the one thing they fear the most is transparency.
Under the FAIRtax, all American businesses and individuals, regardless of size or wealth, will be subject to the same rules.
If The FAIRtax was law, Crony Capitalists and their Congressional allies would have to appropriate money in the open. They could no longer hide it in the corrupt and incomprehensible income tax code.
The FAIRtax eliminates the lucrative “shake-down” on all of us by the people who truly believe in the Crony Capitalism definition of “Golden Rule”. Those who have the gold obtain even more gold from others who have less, and then share it with the politicians and bureaucrats who make it all happen.
If you are ready to take back our control of government from a small group of corrupt people and regain the ability for all to prosper, then go to our Homepage by clicking here and sign up to Get-Updates
Demand Congress to pass The FAIRtax—the only “Fair tax”!
The author George Bernard Shaw said these words in a play he wrote, You see things; and you say “Why?” But I dream things that never were; and I say “Why not?”
Isn’t it time for us to ask, “Why not?”
President Trump, “Embrace The FAIRtax, the only real tax reform! Stand up to the Swamp. They will oppose you anyway because they see you as a threat. What have you got to lose?”
The truth is the truth! Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future: “If you want a picture of the future, imagine a boot stamping on a human face—forever.”
Thank you for staying FAIRtax strong!
Yours In Liberty! Yours In Freedom!
Chairman, Americans For Fair Taxation
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