Sell it and buy another one. That is why I called it "over consumptive" behavior. If they loose net $20K/year who cares, half came from the governments pocket. IMO, it is stupid, I'd rather put half the money in the bank, assuming I couldn't figure out some other profitable business use for it.
Tax policy does have a very big impact on small businesses. I can plow most my profits back into growing a business, and the wealth that accumulates is not taxed until I sell the business. In theory of course, the government claims that by growing my business, I'm creating jobs for other people, hence I deserve this deferred tax break.
So for lots of small business owners, their business itself is like a giant IRA. They grow it largely tax free during their working careers, and cash out when they want to retire. Only then do they pay tax, and currently, not much at that given it is LTCG. But, we deserve it, being the John Gaults of America! |
