Tuesday, August 28, 2012

Taxes, Schmaxes

Let me begin by saying that I have nothing against paying taxes. I know that the taxes I pay go for services that I appreciate: police, roads, education, libraries, etc. You’ve heard it all before.

The owners of our farm have discussed turning our farm ownership from a partnership to a limited liability corporation. I don’t know much about the differences between the two, but I’ve heard that we would be at an advantage to do so. This discussion has been going on for several years. Today, I asked what was keeping the owners from completing the process.

In a word, taxes. Apparently, the State of Maryland believes that it’s entitled to a large chunk of change when businesses change their legal designation. Rumor has it that the cost runs at about one percent of the total value of the business. I suppose that large businesses that have substantial income can afford such things. After taking a very close look at our books today, I discovered that our farm wouldn't be able to afford to stay in business if we changed our designation. We simply don't have it.

So, Maryland, how can you justify such high taxes? What benefit will we – or the people of this state – gain from them? Especially in this economy, it seems that the state should be trying to help businesses succeed. Sure, charge a reasonable processing fee. Even the government has its expenses. But allow businesses to make smart financial choices without the state greedily consuming more than the businesses would gain.

I’m getting my information second and third hand, so I may be missing a big piece of the puzzle. I’m happy to consider such information should I become aware of it. In the meantime, I’m going to start paying more attention to how our elected officials approach small businesses. I have a lot to learn about both politics in Maryland and being part of a small business. I hope the learning curve isn’t too steep for me.

No comments:

Post a Comment