I advised my Business Management Consultant clients to avoid business partnerships: they tend to be messy and frequently end in litigation. Imagine my chagrin when I realized that I had at least seven partners in my own business; they were very demanding, required a great deal of my time, contributed nothing and took more money out of my business than I did.
Who were these "stealth partners" that had slid, uninvited, into my business? They first came into focus when my accountant showed me how much money the various governments had extracted from my business during the previous year.
First of course were the Feds. I collected income and social security tax from my employees for the Feds and deposited it in a Federal Reserve Bank. The rules for depositing were so confusing that I deposited the withheld money ever payday in order to avoid fines. Of course I matched the employee’s contribution into social security, made quarterly reports, prepared W2's and a reconciliation report at the end of the year. I also contributed to a Federal Unemployment Compensation Fund and filed a quarterly report. The Department of Commerce also selected me to submit a monthly report on sales and a complicated report on the goods and services I had used.
Then we had the state crowd. Once again I withheld income tax and submitted it with quarterly reports, summarizing my monthly deposits. We also withheld state sales tax and submitted the tax with a monthly report. The state also had an Unemployment Compensation Fund that I contributed to with yet another quarterly report.
Last we have the locals. In my case I had a County, two Townships, a Borough and a City to contend with. They required the collection of a variety of income taxes, work privilege taxes and mercantile taxes, all submitted with quarterly reports and year-end summaries. I had stores in three locations, employees who lived in various locations and some employees who worked in all thee stores. Record keeping was a nightmare. Keeping data and completing the one hundred plus reports per year consumed a lot of my sixteen-hour workdays.
All of these agencies loved to send what I called Yellow Flyers. Paraphrasing, they said things like "Three year ago you did not submit your third quarter report in a timely fashion and are therefore subject to fine. If you do not submit payment by the close of business yesterday we will seize your monetary resources, put your family in jail and shoot your dog". That might be a slight exaggeration but let me tell you they sure scared the tar out of my wife. It's no solace that they were never correct. It would have helped if they had just once said "Sorry for all the work and anxiety we caused".
This may sound like whining I know that I should consider myself fortunate that I live in a country where I could start my own business. However, I did not get in to business to work for governments. There has to be an easier way for government to collect their money. I once suggested that retailers collect one big sales tax, throw it in a pot and let the bureau "cats" fight for their share. While they are fighting among themselves the business people would be free to do what they do best; provide goods, services and jobs.
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