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To: Mark Adams who wrote (3139)	10/17/2001 3:37:04 PM
From: GraceZ	Read Replies (1) \| Respond to of 24758

A lot of my clients structure their businesses as corporations for the primary purpose of reducing their personal liability rather than the tax savings. In a country with so many lawyers, this is something you have to constantly think about. The tax savings is sometimes severely limited by the added accounting expense, I know whenever I explored this option for my own business it was a dollar swap. The issue isn't so much that people set up corporations to avoid personal taxes but that small closely held businesses are taxed excessively, so the corporate structure protects you from that somewhat. What people enjoy in the way of tax free compensation as an employee hasn't been available to sole proprietors until very recently. ie. tax free medical insurance, disability insurance, etc. and it was only recently that sole proprietors were allowed to deduct half the social security payments. Before these changes, the effective rate of taxation on sole proprietors was close to 60%....try getting ahead with that kind of overhead.

To: Mark Adams who wrote (3139)	10/17/2001 3:57:53 PM
From: frankw1900	Read Replies (1) \| Respond to of 24758

What do you mean by a 'wealth tax'? Tax on $ in the bank? Real property? Financial instruments? I think they're all lousy because they reduce the possibility of income/investment which might come from the wealth. And they coerce folk to do silly things to hide their wealth and worse, make folk on fixed incomes poor. A manufacturers' sales tax, such as they had in Canada for a long time, has the same effect. Used to drive me nuts - they were taxing me on the cost of equipment and I hadn't made dime one with it.... Taxes seem to be a necessary evil. Why make it worse with mania for taxing everything? Tax a surplus - net income. Nobody gets too bitter about that.