How Congress Screws the Small Business Owner 

Class, income, wealth envy is a cancer on society.

Well, of course they do. Big businesses have always lobbied to make it more difficult for smaller businesses to even join the market. Washing dc is filled with 3 things. Contractors, lobbyists, and lawyers. There's no Americans in washington.

Imagine a bum jaking you everyday for 34% now put a suit on him whats the differance its theft

No taxation without representation

Buy the building for cash. Then all you have to pay regularly IS the tax. If you borrow, you pay more because you pay interest and finance fees. Anything you do other than pay cash for the building, you will pay more because you outsource some level of the process. Likewise: If you rent, you end up paying for the property taxes - don't think that the landlord will lose money on your rented the building. He will add the property tax to the monthly rent - plus he'll add profit.

This caller is just trying to avoid paying taxes...

I've never understood why people think paying $60k to save $20k is smart. Even the math doesn't work!!

why did we break away from England?

Can he change how he organizes his business if whatever class he is in puts him in that tax bracket? I agree that this tax issue is stupid, especially when there are businesses that make millions or billions in profits but pay no federal taxes. This is what people are talking about when they complain the wealthy don’t pay their fair share, and that some pay a lower tax rate than regular people thanks to all the loopholes despite making 100x the median income. Even though this sucks, at least if you are paying taxes you are making money and not losing it. Small victories.

Could they not take the money they saved open another business or real estate trust and finance it through that and pay rent from the original company to themselves and rent is 100% deductible, it makes sense if he wants the building now

Why don't conservatives understand the difference between theft and extortion.... calling taxes theft doesn't make any sense the government threatens you if you don't "voluntarily" give them your money it's a different crime and the first step of wisdom is calling things by their name.

"The government totally sucks." -Tenacious D

TLDR; it's the 'opportunity cost' missing out by not using leverage (debt), not exactly just tax saving, that make the difference. well, since Dave is strictly not using debt in his finance, so he missed out the leverage and that turn in to tax saving benefit that he didn't care to think about. - gotta emphasize the situation that the caller doesn't have $1,000,000 to buy a property in the first place. he has to save for it, and thinking of using loan for 'tax saving' - let's assume he has $200,000 to spare every year, and his tax rate for this portion is 30% to make it simple. - by trying to just save $200,000 a year, he'd have to pay $60,000 each year in tax of that portion. So his net saving is 140,000 a year ** so he'd need 7+ year to save up for the property - for the course of 6 years (5+1) he pays 360,000 in tax - and he lost about $187,000 in property appreciation because he doesn't own it. - that is $547k in the opportunity cost. and saving a couple more years, he can buy the building out right. === on the taking a loan scenario. - by taking out a loan at 20% down payment ($200,000) and aiming to pay it off in 5 years - his total interest payment for the 5 years is roughly $150,000 - since this property is for his business (think of it as a warehouse), he can do cost segregate, and early depreciation + bonus. the number is vary base on the property, but let's use 30% of property value can be deduct right away. - so in the the first year he has $300,000 of deduction. (while paying $200,000 for the down payment) - in the course of 6 years, his total cost would be; 150k interenst, 224k tax (after deduction). and he would capture the 187k appreciation of the property. - total cost to own this building become just roughly $187k (versus 600k in the save to pay for cash scenerio) - havent calculate the part that if it's a warehouse he needs for the business and having to rent a one. that gives even more advantage for taking out a loan. of course, risk profile is very different between the two. he take a lot more risk if he take out the loan, and that's where Dave likes to pay cash for everything.

1st people with up to around 20Million are not Rich in the sense of "tax the rich".

Congress refuses to fix section 174 expensing for software development.

please add the consideration of marginal tax rates - it is sloppy to overlook that - just like everyone else seems to.

I never thought I would say this but this guy really needs to talk to Grant Cardone. Dave is stuck in that chair too much

The difference is the he could borrow now and start that depreciation now rather than in 4 years

Wouldn't the tax break come at the purchase of the building? Say you save $600,000 a year and that gets taxed but later when you purchase the building with cash don't you get to write off that $3,000,000 purchase? Then in that year you'd likely show a loss meaning you'd pay no taxes that year as well as get a credit?

Second

So let me get this straight, you make a million, and you cant reinvest in youur company before you pay 300 000 in tax first,

How many taxpayer dollars did Dave get to build his new facility a few years ago?

Making 5 million a year is not a small business!

Whining again... poor victim