Wednesday, December 3, 2008

Money & Business

Risky Business by Matt Bandyk

Why I Actually Agree With Mark Cuban

September 17, 2008 05:09 PM ET | Matthew Bandyk | Permanent Link | Print

On my post from last week, Mark Cuban (and yes, I know it's really him and not some commenter calling himself "mark cuban") makes the case that the benefits of getting rid of taxes on small businesses outweigh the possible drawbacks:

It comes down to this, would you rather have small busineses worry about what to do with their 26th employee or not start the business because they cant afford to deal with all the tax burdens.
....
No proposal is perfect. But creating a decision point at 25 employees is a far better scenario than stifling innovation and entrepreneurship before it can get started

I agree that just because a proposal is imperfect is no reason to oppose it. I also think that cutting these taxes is better than the status quo, so I am not a supporter of doing nothing. But I can't help wondering if there is a way to make the proposal a little bit closer to perfect. That's why I mentioned in my initial post on this subject a perhaps better alternative: no taxes for businesses in their first year of operation. That would eliminate the disincentive to entrepreneurs to take risks and start businesses, but without the potential for different disincentives down the road.

So what do you think, Mr. Cuban (and everyone else): Lift taxes for new small businesses?

Another question—why is neither Barack Obama nor John McCain talking about this?

Tags: small business | taxes | government intervention

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Reader Comments

Allowing certain small business start-ups and their employees to opt out of paying anything for Social Security and Medicare is nuts. It's profoundly unfair to people already in business or working elsewhere and short-changes the employees on earning credits to qualify for a future SS pension.

Cuban might be right about income taxes, but he is not right about payroll taxes.

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About Risky Business

Matt Bandyk, a reporter for U.S. News, explores capitalism from where it all begins, with the entrepreneur, whose risk taking and experimentation provide the roots from which the rest of the economy grows. As much courage as it takes to create one's own business, even the entrepreneur needs some help, and this blog will look at news, trends, and practical advice for starting and running a small business.

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