The Beginning Of The End
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Start A Business? In The United States? Are You Kidding Me?

Many of you have decided that you are going to attempt to start a business in the United States today.  Many of you are still convinced that this is "the land of opportunity" and that starting a business is fairly easy.  Are you sure about that?  Are you certain that you have considered all of the headaches involved?  Are you sure that you are ready to handle the thousands of regulations that apply to your business and the mountains of paperwork mandated by various levels of government?  Are you prepared to deal with entrenched unions, predatory lawyers and rabid environmentalists?  The truth is that the business environment has never been this toxic in all of U.S. history.  So even if you are able to start a viable business that can compete with the monolithic global corporations that dominate our economy, you still might not be able to make it.  In the end, thousands upon thousands of businesses across America have been doomed to failure by ridiculous regulations, mountains of paperwork, health insurance costs, predatory lawsuits or corrupt government officials.  So do you really think that you can beat the odds?

Historically, small businesses have been the driving force behind America's economic growth.  But today, we have made the business environment so complicated that small business owners are being completely smothered by red tape.

The following are 10 areas that anyone wishing to start a small business had better think about before moving forward.  When you really stop and think about it, the fact that anyone out there is still attempting to start small businesses in America today is absolutely amazing.

#1 Regulations

If you plan to start a business in America today, you better get a hold of a good lawyer.  In fact, if you want to be safe, you better get a small army of lawyers.  You are going to need an expert on the federal regulations that apply to your business, you are going to need an expert on the state regulations that apply to your business and you are going to need an expert on the local regulations that apply to your business.

There are going to literally be thousands of regulations that apply to any business started inside the United States today.  There is no way that you will ever be able to learn them all.  Not only that, but the truth is that your lawyers will only be aware of a small fraction of them.

Do you know what the Federal Register is?  The Federal Register is the primary source of regulations for U.S. government agencies.  In 1936, the number of pages in the Federal Register was about 2,600.  Today, the Federal Register is over 80,000 pages long.  That is just one example of how bad things have gotten.

So what do you do?  Well, just do your best to try to learn about the major regulations that apply to your business and pray that you don't end up violating some important regulation that you are not even aware of.

#2 Paperwork

Do you know what paperwork the federal government expects you to fill out?  Do you know what paperwork the state government expects you to fill out?  Do you know what paperwork the city or the county expect you to fill out?  Do you know what paperwork you will be required to fill out when hiring a new employee?

The truth is that the paperwork burden on small businesses has multiplied in recent years.  Many small business owners are so swamped with paperwork that they barely have time to conduct their actual businesses.

For example, the U.S. Food and Drug Administration is projecting that the food service industry will have to spend an additional 14 million hours every single year just to comply with a new federal regulation that mandates that all vending machine operators and chain restaurants must label all products that they sell with a calorie count in a location visible to the consumer.

14 million hours just to comply with one ridiculous regulation?  Yes, that is how bizarre things have gotten in America in 2010.

#3 Fees And Fines

Many small business creators in America are absolutely horrified to learn of the fees and fines that they must pay before they can ever even open their doors.  Much of the time it is revenue-starved local governments that are the biggest culprits.

For example, a reader of this column named Gene recently shared his regulatory horror story with us....

Started a new business this year in AZ. Paid over $10,000 in fees for permitting, $10,000 in fee for elec hookup, $10,000 in fees for gas hook up and an extra $200 fee per month just for the “privilige” of having gas. Adding up all the fees to start our business, I don’t think we would do it again. We are now just getting to the point that we are making our bills each month, and so we are not taking a paycheck, and don’t anticipate one for at least another year. Our family has been in business for ourselves for decades,and we know what we are doing, but the rising fees caught us off guard. Cities, municipalities, counties and states are raising all fees at astronomical rates to help offset the slump in their real estate income (since banks apparently don’t have to pay real estate taxes)…I’m telling you every business person I know is on their last leg.

#4 Taxes

The United States has one of the most (if not the most) repressive business taxation scheme in the world.  As a small business owner, do you know what taxes you will be expected to pay?  It is not just federal income taxes and state income taxes that you will be paying.  In a previous article, I detailed the various forms of taxes that Americans pay each year and most of them apply to small businesses as well....

Accounts Receivable Taxes

Building Permit Taxes

Capital Gains Taxes

CDL license Taxes

Cigarette Taxes

Corporate Income Taxes

Court Fines (indirect taxes)

Dog License Taxes

Federal Income Taxes

Federal Unemployment Taxes (FUTA)

Fishing License Taxes

Food License Taxes

Fuel permit taxes

Gasoline Taxes

Gift Taxes

Hunting License Taxes

Inheritance Taxes

Inventory tax IRS Interest Charges (tax on top of tax)

IRS Penalties (tax on top of tax)

Liquor Taxes

Local Income Taxes

Luxury Taxes

Marriage License Taxes

Medicare Taxes

Payroll Taxes

Property Taxes

Real Estate Taxes

Recreational Vehicle Taxes

Road Toll Booth Taxes

Road Usage Taxes (Truckers)

Sales Taxes

Self-Employment Taxes

School Taxes

Septic Permit Taxes

Service Charge Taxes

Social Security Taxes

State Income Taxes

State Unemployment Taxes (SUTA)

Telephone federal excise taxes

Telephone federal universal service fee taxes

Telephone federal, state and local surcharge taxes

Telephone minimum usage surcharge taxes

Telephone recurring and non-recurring charges taxes

Telephone state and local taxes

Telephone usage charge taxes

Toll Bridge Taxes

Toll Tunnel Taxes

Traffic Fines (indirect taxation)

Trailer registration taxes

Utility Taxes

Vehicle License Registration Taxes

Vehicle Sales Taxes

Watercraft registration Taxes

Well Permit Taxes

Workers Compensation Taxes

#5 Health Insurance

Do you know if you will be required to provide health insurance for your new employees?  Have you familiarized yourself with the new 2,409 page health care law enough to be able to set up a health insurance program?

As a result of the new health care law, health insurance premiums for employees are shooting through the roof.  Are you going to be able to afford them?  Would it be better to have fewer employees and work each of them harder so that you won't have to provide health coverage for as many people?

Will you be able to compete with the companies in your industry that have received waivers from having to comply with the new health care law?

In the United States, our system places the burden of providing health care on to the backs of employers.  So are you ready to handle that burden?

#6 Pensions

Will the employees of your new business need pensions?  Do you know how to set up a 401K program?  Do you know what defined benefit plans are?

You can literally sit through an entire law school course on pension law and still understand virtually nothing about the subject.  The truth is that if you plan to provide your employees with some kind of pension program you had better hire someone who can at least pretend that they know what they are talking about to set it up for you.

#7 Foreign Competition

Especially if you are creating a small business that does manufacturing, you are going to have to deal with foreign competition.

So are you going to be able to compete with the companies in your industry that pay their workers on the other side of the world less than a tenth of what you are paying to your American workers?

On the other side of the world, companies often don't have to worry about unions, worker's comp, health benefits, retirement benefits, nightmarish environmental regulations, crushing taxes or miles of paperwork and red tape.

Are you certain that you can compete against that?

#8 Lawsuits

The more successful you become, the more inviting of a target you are going to be for predatory lawsuits.  The truth is that the courtrooms of America are packed with thousands of them, and the lawyers that bring them are hardly ever held accountable.

All of your hard work can go down the drain in a single moment.  There are hordes of lawyers out there that make their living by filing lawsuits against small to mid-size businesses.

The truth is that if you are running a small business, you are probably doing something wrong.

Just hope and pray that a predatory lawyer does not find out.

#9 Environmentalists

Protecting the environment is a good thing.  Unfortunately, there are many radical "environmentalist" groups that consider it to be a bad thing that humans even breathe because it produces carbon dioxide.

When Audi ran their now famous "Green Police" commercial during the Super Bowl last year, most Americans laughed it off and thought that nothing like that could ever happen in America.  Well, it turns out that it is happening in America.

Not only are government environmental regulations totally nightmarish at this point, but there are a growing number of radical environmentalist groups that are running around the country filing lawsuits against whoever they feel like.

#10 The Federal Government

Are you prepared for a federal government that can literally change all the rules at any time?

Many businesses across America are frozen in their tracks at this point because they don't know what Obama and the U.S. Congress are going to do next.

The truth is that things are getting really bizarre in this country.  For example, federal agents recently raided an Amish farm at 5 A.M. in the morning because they were selling "unauthorized" raw milk.

If federal agents will raid an Amish farmer at 5 AM in the morning over some raw milk, do you think that they are going to have any mercy on your small business when the time comes?

The America that once embraced "free enterprise" and the entrepreneurial spirit is dead and gone.

Now we are a country filled with bureaucrats and red tape from sea to shining sea.

Is it any wonder why we can't compete with the rest of the world?

Is it any wonder why so many millions of Americans are unemployed and can't find jobs?

In an attempt to "solve" our problems we just keep passing more "reform" which means even more rules and regulations for our businesses to follow.

Just as they are doing on an individual level, the government is attempting to watch, track and control everything that our businesses are doing.

Everywhere you look in American society today, the government is gradually tightening the steel-fisted grip that is has around everyone and everything.  Pretty soon you won't even be able to sneeze without the government telling you how to do it correctly.

Is that really the kind of society that we all want to live in?

What a nightmare.

Do you have a horror story from starting a business in America that you would like to share?  If so, please feel free to post it in the comments section below....

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  • http://jamesjomeara.blogspot.com James O’Meara

    You’re just looking for excuses. None of this red tape matters. Taxes cuts for the rich will solve everything! Larry Kudlow says so! Green shoots!

  • Greg Pinelli

    I’ve had a business for 35 years..I’m a landscape contractor in California..and we are very good at what we do. We are actually licensed and follow every rule and guideline..we must be incredibly stupid.
    Anyone starting any kind of construction business that doesn’t have a pipeline to government subsidies is buying into one of the biggest headaches you can imagine. Almost any business that competes with illegal, undocumented workers is already 35-45% behind in every bid they make..in every job they complete.
    We haven’t even talked about State..Federal..and County/City requirements and fees. I get a laugh when the Federal Government talks about job hiring credits..It would take..and you are certainly free to do the math yourself..about a $40,000 credit for me to break EVEN with an untrained, new employee…and that’s assuming he/she isn’t simply angling for a Worker’s Comp injury or Unemployment Insurance…Welcome to MY world!

  • dw

    You’re kidding me right. If not the US, where? dumbass.

  • Dano

    I owned a small biz for 17 years. Sold it and could not be happier. My greatest worry was never my competition, it was ALWAYS my government. I have no idea how many rules and laws I broke over the years because there were too many to keep up with. I do know at one time I was almost put out of business by a union-endorsed law at the state level that barely failed. All these idiots in government who have never had to make a payroll should never be allowed the power to legislate over those of us who have…

  • Erick

    I owned an independent Mortgage brokerage from 2000 to 2010. The regulations and fees in my last year of business exploded dramatically to the point that with the difficult real estate market in our small town I had to close the doors. It would have cost me $4,000 in new fees and rebonding due to the new regulations. After this I was simply wanting to have some sort of part time job by selling home grown garden veggies at our local farmers market. I found out I have to register with our state and bne inspected as a state approved food producer!! Add to that $100′s of dollars in fees! Cannot even sell your surplus without your government being involved regulating you and putting their hands in your pocket. Now I am wondering what I can do without a buracratic messs tangling my life up…..

  • Gary2

    The hardest part is the rigged system the big corporations have in place to limit competition.

    Of course their are people like me who want to tax you hard-that is the price for living in America where you have the opportunity to even start a business.

    That said there are some really stupid laws and regulations.

  • Bruce

    rabid environmentalists!!!!!!!!!!!
    You got that right these Eco Nazi have killed more jobs overall then all other groups combined.

  • nosilverspoon

    “We the people” are not THAT stupid. The Black Market nightmare the Feds have caused is just getting started [hell, NYS already lost 41 mil in cigarette taxes in one year due to Native Americans under-cutting prices!] Everything this article states will only lead to a criminal mindset for even ‘honest’ people….

  • http://www.planorperish.com/ Gutter Economist

    I managed a manufacturing company in California with a waste water collection tank. A state government employee drilled a hole through the bottom of this tank and took a soil sample – to see if this tank was leaking!!!

  • Michelle

    That is why people keep their businesses small, hire workers under the table or illegals, and “fly under the radar” – because it’s nearly impossible to follow the “rules” and still make a profit.

    Having to pay employees’ medical “insurance” is ridiculous. Employees need to take care of their own selves in this matter. It used to be that companies could negotiate lower rates for group policies, and the employee would save money on health insurance that way. Then they stared figuring it in to their salaries. Now it’s required and the rates naturally go up.

    Anything required will rise in price due to the necessity of it. But health insurance is not necessary, it’s a “luxury” or a waste of money to a person who takes good care of themselves and eats healthy and keeps their weight down, etc.

    People got so scared of being left out – not having insurance…save the money from the premiums and you can afford to go to the doctor when you are sick, pay cash, and invest in something that will give you more than the false sense of security you get from “health insurance” which is really “sickness insurance” and how about “life insurance” which is actually “death insurance”.

    Regulating all this just makes it so the free market can’t work, and prices go up instead of down, while quality goes down instead of up…

    Go to TOLFA.us and take the online freedom academy’s lessons for a look at how the entitlements everyone wants has destroyed the ability of people to do business here.

  • Nickelthrower

    Greetings,

    Having had (and lost) a few businesses in my time I can say that the author is dead on with his view on regulations and taxes. As a matter of fact, it was regulations and taxes which killed my previous business as the cost, in both time and money, of compliance was just too much.

    My doors were open to the public and even though my clients sat in a chair across from me and there was pretty much no way on earth anything unusual might happen, I was required to carry a “high risk” 1 Million Dollar liability policy. If someone tripped over their own shoelaces in my parking lot I could potentially be held liable.
    That insurance was $300 a month with a $25,000 deductible.

    I could not make any sense of the 44,000 pages of tax law so I had to hire an accountant. Next, because there were only five of us, we got the crappiest deals for health care. Oh yeah, electricity, internet, phone and other services are more expensive for a business. I paid a premium for all of those things.

    Frankly, I could not compete with my competitors, many of whom worked out of their homes even though no residential neighborhood I know of is zoned for the kind of work I do (commercial post production audio). They didn’t have to claim their income or pay taxes either – being legit took me out after eight years as my competitors could undercut me by 50%.

    I think lots of businesses are still being started but they are underground.

  • david

    officially FDIC reported that for the year of 2010, there were total of 151 banks failed! but the Government keeps saying things are getting better for America! LOL Who the hell wants to open a business in USA? I would rather take my money, dream . . . . .elsewhere my friends! The author is right and this country will be heading to third world country before your eyes, and you know something,Greed of Elites brought us down!

  • Elizabeth

    Owned a business for 10 years. Closed it last year for most of the reasons you listed above. Every year became a bigger accounting nightmare and it was fees, fees, fees constantly. It wasn’t worth the hassle so I closed my doors. Never looked back and will never own a business in the US again.

  • flubadub

    After paying all their taxes and fees and complying with every senseless regulation mom and pop will now face the biggest hurdle; competing with the franchises. Will their little restaurant, hotel, corner grocery, hardware or auto parts store be able to compete with the huge advertising budgets or economies of scale for purchasing that the franchised international chains enjoy? You’ll never see a 30 second $2.5 million superbowl ad for Ma and Pa’s homestyle burgers.

  • Richard Allen

    I dunno where you are getting your info, but here in my neck of queens in NYC businesses are opening up left and right….but none of them speak English.

  • http://computerforensicssalary.net/ Computer ForensicsSalary

    The only business I would think of starting would be something under the table, like small engine repair or making quilts. Or start a website or 2.

  • Clyde Ankle

    You know, the regulation is implemented on a sliding scale. The local babysitter or drug dealer faces little regulation or oversight. The level of regulation and paperwork increases as the size of the business increases. A small business can prosper below the radar by staying small. If the business does prosper, hopefully the increased profits can offset the addtional paperwork, expense and hassle.

  • http://ciaoant1@gmail.com ciaoant1

    Hitler parody video – Hitler as a CEO
    http://www.youtube.com/watch?v=uq0OKWmP5kA

  • Libertarian jerry

    And,after you survive the 1st ten years in business by working 10-12 hour days 6 or 7 days a week,disciplining yourself to live frugally and finally make it to where you are a success and can spend the fruits of your labor that you worked so hard to create, somebody from the government will come around and tell you that you have to”pay your fair share” and will demand half or more of your profits. This is called Socialism. And this is one of the many reasons why Socialism is a gutter philosophy and should be wiped off the face of the earth.

  • Dave Meekhof

    Can’t find a job? Does that mean you can not work? What, your skills and abilities have been striped from you? This article suggests that the only path forward, self employment, is a doomsday scenario. IT IS THE ONLY PATH FORWARD! We need to buck up America. If the political structure blocks the way, then go around. Millions of Americans are doing it. They/we have to eat. We were here before them. Do what made this Country great in the first place. If the politicians starve, well maybe they’ll need to come to you for a real job.

  • happy face

    America is a great place to start a business. Look how well this web site is doing. Apparently selling hot dogs at the end of the world party is paying off.

    There will always be a place where hard work and determination and clear vision can make it. This site just ran out of any fresh dire predictions and wants to stomp on something that is good about this country.

  • gentile

    Clear example of how corporations prevent people from creating new competition

  • Cary

    In Soviet Russia the agrarian libertarians gave the establishment absolute hell with their incessant crop growing and illegally free trading second economies. I see that is where we are headed.

  • El Pollo de Oro

    Michael T. Snyder is absolutely right: running a business in this country is an uphill battle all the way. And here’s where the news gets even worse: you can’t afford to have your own business in The Banana Republic of America (formerly the USA), but you can’t afford not to. Either way, you’re screwed.

    Whether you’re blue collar or white collar, the employment situation in the BRA is horrendous. There is one job opening for every five unemployed Americans, many jobs don’t pay a living wage, college graduates with masters degrees are applying for entry-level jobs at the dollar store—and even if you have a job, you can easily lose it to downsizing, outsourcing, or layoffs for the sake of layoffs. Even companies that are making huge profits will lay off their best workers in a heartbeat just for the sake of laying them off. So given how little job security there is in the BRA in 2010, it’s no wonder that talented Americans say, “Screw working for someone else. I’m going to start my own business and be my own boss.” But as Michael articulated, being self-employed is harder than ever here.

    And #5 is a real biggie given how dysfunctional the BRA’s rotten health care system is. Leave a dead-end job to start your own business in the Netherlands, and you’ll still have access to affordable health care; leave a dead-end job to start your own business in the BRA, and you’ll have the “pleasure” of paying sky-high premiums that add a lot to your overhead (that, on top of the IRS as well as state and local revenue agencies constantly pointing a loaded gun at your head). I’ve been self-employed in the BRA for many years, and I like American health insurance companies about as much as I like rapists, terrorists, child molesters and black widow spiders. In other words, I truly hate their miserable guts. And the reality is that neither the Democraps nor the Republikkkans will give us true health insurance reform because both parties are in bed with the corrupt insurance industry. For that reason and others, I consider both parties enemies of small business owners like myself.

    The BRA is anti-worker and anti-entrepreneur at the same time—a very toxic combination in a rotting, decaying Third World basketcase of a country. So I repeat: you can’t afford to have your own business in The Banana Republic of America, and you can’t afford not to. You’re screwed if you start your own business here and screwed if you don’t.

  • mondobeyondo

    It does make you wonder, if the U.S. government is intentionally trying to kill the entrepreneurial spirit which made us such a great country.

    Guess it’s time to look for a government job…there should be a census every year, instead of every 10 years. Everyone would have guaranteed employment!

  • mondobeyondo

    Well, apparently a hot dog stand is not a bad start, come to think of it. The USA does make great hamburgers. World famous, in fact! Just look at McDonalds, Burger King, Wendy’s, etc. No doubt, In-N-Out Burger is looking to make inroads in Thailand. America is good at making burgers. It’s about the only thing we do well these days, it seems.

    And since most Americans are now so broke they can’t pay attention, maybe White Castle can find a new market in Dubai.

  • Owen

    Think prison planet and ask yourself why. Check out what the Bible has to say about our day and age.

  • zack

    Well we started a business in the United States precisely because it’s becoming such a terrible place to do business in. We help Americans move to Asia to start their own business, find a job and achieve prosperity. Visit http://www.pathtoasia.com/ for more information.

  • Julian

    You wanted a great stupid “revenge” war against the “ugly” muslim in Irak and Afghanistan after 9/11 a completely inside job (with israel help)
    Now you pay the bill and it’s just the beginning…

  • Michael2

    I am still reeling from the idea that the FED apparently has the power make the American tax payer financially responsible for the BAILOUTS of the usual suspects, i.e. the foreign governments, outlaw corporations and the other assorted, scallywags, and hooligans. I guess the taxation without representation clause is moot, null and void too.

    Nonetheless though, I too use to dream of a business of my own over the years but as I researched and gained real life employment experience, I realized just how far out of my grasp that really was. I have an associate degree for Contr. Tech. and I am close to a bachelor’s degree for Project Management so I know first hand that most of the observations in several previous comments and in this article are all to true. What my experience has taught me is now the business is either in pitching a business idea, invention, etc. to one of the giant corporations (and pray they just don’t out right steal your idea) or you go to work for one of the giant oligarchs and hope to get rewarded for efforts and talents.

    In fact because of this anti-entrepreneurial and labor exploitive corporate climate I am going to try and teach some type of vocational course. My angle is to try and have some of the growing mountain of student loan debt forgiven. It seems it has all boiled down to me fighting for government and corporate crumbs and scraps that happen to fall off their overly bountiful banquet tables. I am in shock given all that is going on in America that the ideal of a strong, free and healthy democracy persists in American culture. We are much freer than many countries I realize but our government(s)(Local, State and Federal) seem increasingly more like some of the totalitarian regimes we denounce than we can bare to acknowledge or discuss.

  • Mr Carpenter

    Perhaps there are solutions.

    One solution would be to walk away before the powers that be completely close the gates. (This partially happened under Bush II and is getting progressively worse). Like the East Germans, closing the borders eventually will be more for keeping people IN rather than keeping people OUT.

    The other solution is much harder, and that is to re-adjust the thinking.

    Hmmm, how can I put this so that the powers that be won’t turn on my for inciting illegal activities later? (Because we all know in our heart of hearts that we’re being spied on by giant computers crawling the web and looking at every email we write, every blog we write and probably listening in to every phone call we make).

    In case it has escaped your attention, the Constitution is only good for those very few people in power – for the rest of us, it is a dead document. We are, for all intents and purposes, no longer citizens of a free republic but subjects of combined corporate-government world (which is called fascism).

    Anyway, so the point I was going to make is that in other nations such as the soviet dis-union and eastern europe behind the iron curtain as well as most OTHER sorts of banana “republics” a black market economy is pretty much the only way to succeed. This is also true in Greece, and the powers that be have truly attempted to destroy that. It may be that it is impossible to have this in future with “card-currency” instead of paper fiat currency. “Mark of the beast”? Probably.

  • http://www.danielrevelationbiblestudies.com Robert Stout

    Your absolutely right my friends at Economic Collapse!!! My friend who has a small business in home foreclosures, now is filing for bankruptcy because of all the taxes and red tape and slow pay of the banks!!! Every time he turns around they slap him with something new and cannot keep his head above water!! He has been drowning for months to hold on, but can no longer fight them!!! This is what American has come too!!! All the government currently do is too lie to the public. God Almighty is going to call them to account here real soon!!! All this evil will stop with God!!!

  • mondobeyondo

    I’ve got my epiphany!

    I’m going to set up a hot dog stand at a downtown corner… broiled jalapeno slices, onions, garlic and mustard, with onion rings on top. Maybe even some fried green tomatoes, for some “authentic” U.S. Southern flavor. (Hey, Taco Hell says they’re “authentic” Mexican food, right? Ha!) Yeah, that’ll work. Latin Americans are gonna love Southern U.S. cooking! Pecan pie, blackeyed peas, pigs’ feet, and so forth.

    Think I’ll call it “Frank-N-Furter”, as a little nod to the “Rocky Horror Picture Show”.

    Oh never mind, I think that term is copyrighted. Ugh!

    Guess I’ll call it “Sabor de Mexico”. Just get out of the USA with its restrictive rules and regulations… I could set up a couple franchises in Guadalajara, a couple in Acapulco and Cancun (gonna need the tourist dollars!) – and if that goes well, maybe a couple restaurants in Mexico City! Yeah, that’ll do. I could be a millionaire in a couple years! (that’s one million pesos! *sigh*)

    (Psst. Don’t steal my idea)

  • Barry

    Its not a surprise that the monied interests and big business would buy the kinds of laws that make it difficult for small businesses to compete, they hate competition…always have always will…don’t blame the government…its only a tool….blame the greed and wrecklessness of monopoly capitalism at its finest!!

  • El Pollo de Oro

    I forgot to mention that there is another tax on top of all the taxes that Michael T. Snyder mentions in #4: use taxes. What are use taxes? They are state or municipal taxes for mail-order purchases (including online) where sales taxes are not charged. Let’s say you live in Pennsylvania but are purchasing items online from a business in another state; sales taxes are not deducted. Now, states are being very aggressive about going after businesses for use taxes. New York State is one of the most aggressive.

    Michael mentions cigarette taxes, and Philadelphia’s revenue department recently sent out threatening letters requiring all businesses in the city to fill out and return forms stating whether you do or don’t sell tobacco—and if you didn’t return the form before the deadline, a tobacco tax account would be automatically set up (even if you had nothing to do with tobacco sales). Yeah, anything to make life more difficult for small businesses.

    But if you have a small business that is struggling, don’t expect any bailouts. In The Banana Republic of America, bailouts are only for The White Shoe Boys of Wall Street. Small businesses are on their own in this Third World horror show.

    By the way, anyone who is delusional enough to believe that all the fatcat Republikkans who won in November really are born-again libertarians newly committed to small, limited government should give me a call. I have a bridge I would like to sell you. No, make that three bridges. Oh, and you’re welcome to pay cash (Swiss francs are greatly appreciated).

  • http://www.planorperish.com/ Gutter Economist

    Before you flush the American Dream down the toilet, you might get a second opinion here:

    http://www.startupnation.com/

  • The Beast

    So all the regulation is made like this so people would find no other way than becoming slaves to these big-corporations. And as these corporations keep downsizing, such opportunity is also becoming more slim. Thus it’s save to say that if the government has a rational mind, their intention is to reduce the population by making them die in misery. Or maybe because the government simply doesn’t have any rational faculty in them.

  • Peter Honan

    What you are saying is happening in Australia
    There are over 2 million regulations here and growing.
    The old 80/20 rule applies. 80% of the people dont think for them selves and need the government to control their lives.

    About the only business in Australia not completing regulated into oblivion is lawn mowing.

  • Matt

    Gary, why do you think you have a right to the results of my hard work? MY HARD WORK YOU FOOL! And what did you do to make yourself entitled to just simply taking the money I EARNED WITH MY TIME AND EFFORT?! What did you do? What effort or time did you put in? NONE YOU DUMB*SS! NONE! FREAKING NONE! You just made yourself a God in your own mind and declared it right and just to STEAL THE RESULT OF MY HARD WORK, TIME, AND EFFORT! THAT IS STEALING PLAIN AND SIMPLE AND THAT IS HOW WARS START. Ever hear of the AMERICAN REVOLUTION YOU DUMB*ASS??? When the next civil war starts here, you had better choose sides wisely.

  • Ted

    Pfsst….bitch, bitch, bitch, that’s all we Americans do. Brazil for example is booming and guess what, the people and businesses are taxed and regulated twice as much as the U.S.

    Hell, they even have it setup to where importing workers from outside the country is next to impossible, they have almost zero unemployment and their work ethic is blasé to boot.

    I can’t wait until gov is reduced to almost nothing and I get the hear what the next reason is thats making our lives impossible.

  • Theo

    @ Richard Allen. Keep in mind that many businesses in big cities are fronts for illegal activity. I come across them regularly.

  • bk

    The government already teaches us how to sneeze; it has a program that teaches young children to sneeze in the crook of their arm.

  • Greg Pinelli

    I have no idea if dw and Dave Meekhof have ever really run a business or are just terminally naive. The climate in California for a legit business is extremely difficult..I’m not saying that it can’t be done BUT…
    1. You had better have a set of steel stones my friend…because you are going to run into severe obstacles…smartass blog type responses will cover the payroll or the income gap….
    2. You’d better pick a much friendlier State than California…
    3. IF you are willing to run under the radar…black market and cash only..you MAY be able to survive..until you get caught…

    The point of the article and many of the responses I’ve read isn’t that you CAN’T start a successful business..it’s that the odds are enormously against you lasting..and by lasting I mean 5 years or more…
    I have 35 years in my business and make a living..think that’s easy? Try it sometime.

  • Rob

    I write not to criticize but to make honest inquiry. I have read often differing version of what you post, “The United States has one of the most (if not the most) repressive business taxation scheme in the world.”

    But then we hear everybody going on about how the taxes and “socialism” in Europe is awful, with high tax rates, guaranteed vacations, etc. So, what is the truth of it? Is it that personal not business taxes or regulations are worse there? Do you know of any good comparisons or studies?

    And while I think of course we should do away with unnecessary regulation that stifles businesses, I do not want to hear the story that our regulations are the worst compared to China, India, etc., third world or developing countries whose workers earn a dollar or so a day. That is a ludicrous comparison and those who write these articles ought to be take to task for it, if true.

    These countries are emerging from a sort of medieval society and lack even a 19th century American regulatory framework which is folly. How would you like China’s lack of regulation poisoning the food supply on a massive scale here, like, for instance, the bad milk sold in NYC in the 1850s or so, (the manufacturers put plaster and paint to make it appear white) causing the death of over 8,000 (yes, thousand) infants in a few days or weeks. While backward regulatory framework may be good for a few in business, the populace still needs to be protected, from an unregulated business world.

  • Richard Allen

    @Theo:

    True but unless you speak a second language there are no jobs being created for us English only Americans

  • Gary2

    Matt-requiring you to pay your fair share is not stealing, it is simply your dues for living in this country. Don’t like it? try any other developed country and you will be begging for our lower taxes.

    What business do you do? Underwater basket weaving? You sound like a basket case.

  • snark

    One way to fix at least part of the system is to run for political office at the local level. Just being on the ballot and NOT being the incumbent could be all it takes to win. At least in my area, I can’t tell you how many times I go to vote and only one candidate is running and they have been in office for YEARS. These politicians need to be reminded that they work for VOTERS rather than the other way around.

  • M.Lilja

    Baloney! My wife and I have been in business in the US for over 20 years employing between 4 and 12 people. The government is not a problem, regulations are not a problem, taxes are not a problem. What a load of crap and a complete waste of time this blog is.

  • comnenus

    @rob:

    It’s hard to be a government drone, isn’t it?

    The lack of regulation and the constant elimination of low class made America great. Those who drank tainted milk mostly came from the lower class, if you might recall.

    Sorry. One can’t have the cake and eat it too. There has to be some tradeoffs, or it will be Communism.

  • EDpeak

    “Baloney! My wife and I have been in business in the US for over 20 years employing between 4 and 12 people. The government is not a problem, regulations are not a problem, taxes are not a problem. ”

    I agree, I was ready to call bullsh*t on this “there are environmentalists runnign around ready to sue anything they ‘feel like’ nonense. It’s all the fashion (thanks to Wall Street, right wing think tanks getting donains from mega-millionaires and billionaires etc) to complain about ‘regulations and taxes’. What they really mean: “won’t don’t think Americans have the right to protect themselves against toxins, and we want our taxes, which are ALREADY lower than the middle class’ to be even lower” As Warren Buffett correctly points, out, billionaires like him pay a LOWER rate than their own secretaries, so forget “flat” tax, we already have worse than flat, we have Regressive tax.

    Just the other day you complained about poisons in our food and water and air..guess what? The 99% of environmental group out there are honest hard working fellow American citizens trying to do something about exactly those problems. You can’t have it both ways. The vast majority of env groups are responsible, working for protecting We The People from poisoning by Corporations.. Smog, chemicals in kids toys and food, chemicals and poisons in our food that they don’t even put on the labels.

    The right-wing propaganda that told us Acid Rain was fake, that told us Ozone Hole is fake, that tells us global warming is ‘fake’ (never mind that CO2 is at 389ppm and used to be at 280ppm before industrial revolution, never mind that ocean acidificadtion is not a prediction but Already happened and is 30% higher in acidity thanks to our massive co2 increase and some of that taken up by oceans, forming carbonic acid) they will continue to paint every attempt to responsibly protect the children, the public, the environmemnt (if it reduces profits by one dollar or one cent) as some Evil Commie Plot by Crazed Environmental Radicals (TM). Anyone going along with that dishonest portrayal, should be ashamed..how can you look at children in the eye?

  • S

    There’s nothing wrong with taxes. We should be striving for good living standards for ALL AMERICANS, not how easy it is for CERTAIN AMERICANS who wants to make money from operating a business.

  • Tim

    Healthcare is the biggest problem. Without universal healthcare we will not be able to compete. Tea baggers and republicans wany free health care paid by employers. They simply will hire less people. Thanks republicans.

    It is not the health reform it is lack of it.

  • Gary2

    MATT-you are a dolt:

    As far as your “it is their money in the first place”. Bullshit. That income group has not experienced recession. They owe this country for creating the conditions that allowed them to earn and keep their income, as well as to live in a safe and clean environment with laws, law enforcement, and courts that protect them.

    If there is going to be shared sacrifice to reign in the national debt, those that have benefited the most from the economy need to sacrifice the most to correct the problems.

  • Donald MacPherson

    Anyone who wants to run a business that hires employees is committing a form of economic suicide. With local, state and federal governments strapped for cash, the fantasy is that small businesses will furnish the cash necessary to keep those government workers in a job.
    Business owners wind up paying for the privilege of running a business and that gravy train has hit the wall.
    In Germany, corporations pay taxes and have workers on the Board. Here, major corporations pay no taxes, move operations out of the country and let small businesses pay the freight.

  • Bert Miller

    Actually you can easily start a business. There are virtually no environmental regulations, and the ones there ar,e are weak and mostly unenforced. In China where business is booming 97% of workers are in unions. Here – where the economy has been failing, unions are rare now and weak. Most corporations pay no tax at all. If you don’t want to deal with employees, don’t hire any. Don’t use anyone else’s labor. Do what you can do yourself and charge customers for it. Nothing complicated about it. No regulations at all. If you want to hire other people just refuse to pay them any benefits – no health insurance, no pension, no nothing. There is NO LAW against that here. With conservative politicians in charge of the U.S. economy people are so desperate for jobs they will wotk for anything and won’t even dare ask for benefits. The article is really just a bunch of mush. Most of it untrue.

  • http://elisedavidson.co.cc/ Elise Davidson

    Before you flush the American Dream down the toilet, you might get a second opinion here: http://www.startupnation.com/

  • Charley James

    This illogical Socialist Keynesian highway leads to the shadowy tip of reality: you’re on a through route to the land of the collectivist, the communitarian, and the socialists…Go as far as you like on this road to serfdom. Its limits are only those of mind itself. Ladies and Gentlemen, you’re entering the wondrous dimension of imaginative collectivist accounting. Next stop….The Former American Super State –
    L I B T A R D I A –

    No thanks! YUK! I moved me, myself and my endeavors offshore years ago and have no desire or inclination of ever returning to the despotic Police State that makes my skin crawl every time I visit. America is Bankster occupied territory and operates like a feudal State through what amounts to pledging.

  • Charley James

    This illogical Socialist Keynesian highway leads to the shadowy tip of reality: you’re on a through route to the land of the collectivist, the communitarian, and the socialists…Go as far as you like on this road to serfdom. Its limits are only those of mind itself. Ladies and Gentlemen, you’re entering the wondrous dimension of imaginative collectivist accounting. Next stop….The Former American Super State –
    L I B T A R D I A –

    No thanks! YUK! I moved me, myself and my endeavors offshore years ago and have no desire or inclination of ever returning to the despotic Police State that makes my skin crawl every time I visit. America is Bankster occupied territory and operates like a feudal State through what amounts to pledging.

  • India boy

    All ye Americans – come to India and start a business.

    Our governments are too buys fighting among themselves – we do not give a hoots ass to legal issues as a civil case hearing will take about 10 years to come up.. No health insurance required, taxes are ok but not for small businesses. Infact until you do not cross over 25,000 USD in revenues per year, you do not even have to bother registering your business for taxes..

    Even if you do cross – no body cares, until you make millions…

    And when you DO make millions in India – you can bribe your way out of everything.

  • Lacc

    Hi,
    I am able to compare two worlds as I have lived and worked in the US and now I live in Hungary. Let me tell you what difference there is. We work, then from my salary the government takes 32% for social security and welfare and other taxes. Our VAT for goods is 27% we pay after our purchases. Our gasoline costs $8 per gallon our water costs $3 per 1000 liters where in San Diego for example $1,65/1000 liter. Companies let it be small or large get taxed for everything. They also pay social costs after the employees, so you can imagine why companies don’t legally hire people. Trust me guys you are in great place… even compared to EUrope. There are companies close to the government that get benefits and suprise they win all the big money contracts. I think it would be easier to make life in the US.

  • Kelly

    Yes, if you think America is packed with business reactions, then look at many of the Western European “socialist” countries that liberals praise. Once you decide to start a business venture over there, it will make the American set of regulations look like waves in a kiddie pool compared to the EU tsunami.

    Even in the U.S., you can be better off by moving out of high-regulation states like California to the lower-regulation libertarian areas. Unfortunately, we have an indoctrinated generation coming of age who is pro-big-government (and voted for Obama in 2008 by a much larger margin than the population at large). Ideally I’d support someone like Ron Paul or Gary Johnson for President (identifying as a libertarian myself), but if we have to settle for Romney that will be better than more of Obama (who enacted one of the most crushing laws for American people and businesses alike, Obamacare; I think that health care reform would’ve been better tackled by trying to lower the costs so health insurance would indeed not be an essential).

  • Urbane_Gorilla

    All developed countries have the same issues. If you want a harder environment, try Germany or Britain….If you want to open a business without a lot of those issues, I suggest Botswana or Nairobi..

    BTW, as you go about your daily travels, maybe stop at a Chinese restaurant, download that new app by the Israeli startup in Silicon valley, call your English designer about a faux wall finish, then stop and get gas from the Pakistani owned independent station and pick up your dry cleaning from the Chinese owned cleaners, ask yourself “why is it foreigners refuse to come here to and businesses?”

    What a silly article! LMAO!

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