Robert Reich, who is now a professor at UC Berkeley used to be Secretary of Labor under President Clinton, has an idea he calls Tax Jujitsu or the Peoples Tax Cut.
Jujitsu: a method developed in Japan of defending oneself without the use of weapons by using the strength and weight of an adversary to disable him.
Here’s the idea:
Democrats should propose eliminating payroll taxes on the first $20,000 of income, and making up the revenue loss by applying payroll taxes to incomes above $250,000. Read all about it here:
I actually like some things about this idea, but here’s my question:
Would that apply to teenagers who own a micro business? In other words, would business owners benefit too, or only people working for an employer?
Business owners (including teenagers) have to pay 15.3% of their profits to Social Security and Medicare (it’s called self-employment tax. Read more about it at TeensAndTaxes.com).
Wouldn’t it be great if a teenager could start a micro business and know it would be self-employment-tax free up to $20,000!
Wow! Now, THAT would stimulate the economy! We’d find kids starting businesses like crazy. Maybe their parents would start a business too! Maybe these businesses would grow and hire employees, putting more people to work.
Or better yet, maybe these businesses would hire owners of other people who own their own business like webmasters, freelancers and independent contractors. This would spread like wildfire and really get the economy back to health!
I can dream can’t I?