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Editorial: Paying Doesn't Pay |
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by Dan Veaner
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Friday, 17 August 2007 |
 This week I told someone I am a political independent of the old school, who wants to keep the Republicans out of my bedroom, and the Democrats out of my wallet. I have also been learning something about payroll, which is the most startling way to see in one fell swoop how much we earn that we don't keep. And all the startling added expenses the government requires of a business just to pay people. And how complicated the government makes it.
I naively thought I could do a Google search and find a step by step checklist on how to do payroll. Instead I found that the only simple way to do it is to outsource it to a payroll company! So that's another expense whether you are paying one person or a thousand. That just doesn't seem right to me, being the do-it-yourself kind of guy that I am.
If you go to the Internal Revenue Department's Web site you get a pretty clear idea of what the feds consider a clear idea. To say it is clear as mud would be an understatement. Even their 'One Stop' page where you would expect a simple outline along with the resources that, admittedly, I am glad they have posted there. There are more forms and laws and requirements than noodles on a dish of spaghetti. And this only takes care of the federal requirements, it doesn't even begin to tackle state or local ones.
For someone who pretty much gives the baby sitter a couple of dollars in cash, this comes as a shock. A business has to withhold taxes from employees (I'm OK with that), keep track of when to pay the government its share, what forms to fill out, plus buy workman's compensation insurance (I'm for that -- my great uncle was a pioneer in the development of workman's comp law, but it does seem a bit silly in a business where two people spend most of their time sitting down).
And the acronyms! How does the government come up with this stuff???!!! I believe that the Department Of Commerce has a USDOCAD (United States Department of Commerce Acronym Division) that employs thousands of government workers to create and categorize acronyms. The irony is that they then have to pay all those employees, which means that someone in the government has to figure out how to do it.
All of this is just to pay someone. It doesn't include the corporation tax, property taxes, sales tax, or even thumb tacks!
This won't be new to a lot of people, but it is worth saying from time to time, that Americans ought to be able to keep their hard earned cash, or as much of it as possible. It is hard enough to earn a living in this day and age, and while we read about major corporations losing millions or billions and not seeming to notice, a few dollars is a lot for most small businesses. For the first year our business was open I told people we were working for Blue Cross/Blue Shield. Once we got over that hump I found out we were working for the federal and state governments. And here I thought we were working for ourselves!
So I guess I'm becoming a fierce independent with strong Libertarian leanings. But in the meantime I have an appointment with my accounting firm tomorrow to get a quick and dirty tutorial on payroll.
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v3i31
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