Here's a young entrepreneur who will be taxed to death by Obama...

[Manedwolf]

$250,000 gross? OOPS! TAX HIM!

Obama's plan will destroy his dreams. I hope people realize that. Oh, yeah, he was also homeschooled. That'll get banned. Can't show up the substandard public welfare state indoctrination schools.

NASHUA – At the age of 12, when other kids are usually moving from lemonade stands to paper routes, Josh Heinzl started an online business selling Lego pieces and sets.

That was in 2005. Just two years later, in 2007, the business posted gross revenues of $250,000. This year, Heinzl, now 15, has parlayed that success into the opening of Josh's Toys & Games in Nashua's Pheasant Lane Mall.

The store features mostly educational games and building sets, as well as a large section devoted to Lego.

Heinzl's interest in Lego started when he was 10 when he joined a FIRST Lego League team. FIRST Lego teams build robots that have to complete tasks during competitions.

The robots are built entirely out of Lego, so Heinzl found himself buying sets and only needing one or two pieces. Instead of hording the extra pieces, he decided to try to sell them online.

Through this process he also found some "interesting buying leads," he said, which enabled him to get hard-to-find Lego sets, and soon his online business was humming. Instead of setting up his own Web site, Heinzl sold his products on established sites like eBay and others devoted to Lego sales.

In 2006, when he was 13, Heinzl signed on with Lego, which is based in Denmark, as an independent toy dealer.

Standing at the cash register in his new store earlier this month, Heinzl said the secret to his success is that he charges less than anybody else -- and he has the ability to find all things Lego.

"If you want any set ever made, I can get it," he told a customer who'd come into the store looking for an older model Star Wars set.

Around the store are other examples of Heinzl's passion for Lego. Behind the cash register is a piece of Lego artwork. It's a recreation in Lego of a picture of a sea turtle Heinzl took while scuba diving. He also has a life-size caricature of himself that he has "Lego-ized," which took him 35 hours to build, he said.
Oct. 27, 2008 toys 200px (SUZANNE BATES)

Jonathan Heinzl built some models for his brother's toy store. (SUZANNE BATES)

Because of Heinzl's varied interests, his mother, Mary Heinzl, said she decided to home-school him. Starting his own business has already taught him many of the lessons schools are trying to teach their students, she said.

Writing his own business plan, doing the accounting, hiring three employees (a manager, assistant manager and salesperson) for his store, doing inventory and shipping for his business, it's like a giant independent study project.

Heinzl's family has gotten behind him in his latest effort. His mother and father helped with the start-up, and his brother, Jonathan, built some of the models in the store and gave his older brother advice on what toys and games to buy.

But, said Mary Heinzl, Josh has done most of the work.

"I don't think most companies even know he's 15," she said. "They send the products and he pays the bills."

When asked where he got his entrepreneurial spirit, Heinzl said he just saw a need and figured he could fill it.

"I realized if there's an opportunity there, you have to take it," he said.

With his first store just getting off the ground -- it had its grand opening Oct. 10 -- Heinzl is already looking to the future. He said he hopes to eventually open more stores around the state.

"I want to ride this to the top," he said.

http://unionleader.com/article.aspx?articleId=9cd9694f-3029-49a8-9ef8-0ebe3e8fc8bd

[roo_ster]

Well, obviously that sort of thing must be quashed.  Get him into a public school, post haste!

We can't go about minting sawed-off robber barons willy-nilly!

[K Frame]

I thought Obama was talking about raising taxes on the people who earn $250,000 a year, not businesses that gross $250,000 a year.

[El Tejon]

Most small businesses file an individuals.

And boy do we get whacked!

If we could only get rid of the AMT we would be just fine.

[Standing Wolf]

"I realized if there's an opportunity there, you have to take it," he said.

If there's an opportunity for leftist extremists to advanced the cause of statism...

[K Frame]

"Most small businesses file an individuals."

Which is, as far as I'm concerned, one of the stupidest things you can do when it's so cheap to incorporate and that provides an incredible amount of protection to the invidual.

[roo_ster]

"Most small businesses file an individuals."

Which is, as far as I'm concerned, one of the stupidest things you can do when it's so cheap to incorporate and that provides an incredible amount of protection to the invidual.

They are not stupid, they are making the best decision, given the laws, regs, incentives, etc.

Their business is most likely incorporated as an S-corp.  All the profit goes to the owner who files as an individual.  Some also do C-corps, but they can be more work/overhead than many small businessmen want to take on, tax & reg-wise.  Also, with a 35% tax on corporations, the business has to have a larger gross or profit to justify using a C-corp versus the simpler S-corp.

Most offer limited protection to the individual owner.  Most lenders will require the individual to sign on the dotted line and take responsibility for the loan.  Don't believe everything you hear when the "Incorporate in Nevada!" commercial spools.

[MrRezister]

He's an evil greedy capitalist.  The country will be better off if we spread his wealth around.

That'll teach him!

[K Frame]

I have no clue what the "incorporate in Nevada" laws are.

I do, however, know what the "incorporate a small business in Pennsylvania" laws are, having been part of it four times in the past 15 years. I wouldn't undertake a small business venture without it.

Yes, I do believe it's stupid to not incorporate a business that has public access. Incorporation gives the individual owners separation and protection protection against lawsuits filed by, say, someone who is injured while on the business premises.

Yes, most lenders will require owner personal surety against loans taken out in the corporation's name. That's not the point of incorporation.

Whether or not the tax benefits are better or worse are something best determined by an accountant.

[cassandra and sara's daddy]

in my experience i take a bath tax wise if i incorporate. i might avoid it to a degree if i were to greatly complicater my accounting procedures. ie pay some other sob

[buzz_knox]

Yes, I do believe it's stupid to not incorporate a business that has public access. Incorporation gives the individual owners separation and protection protection against lawsuits filed by, say, someone who is injured while on the business premises.

That protection is limited when dealing with sole proprietorships, as piercing the corporate veil is rather simple in such cases.  Incorporation then is basically for tax purposes.

[Perd Hapley]

The kid IS an enemy of the revolution.  I say, take the swine's money, and give it to the working class!!

[K Frame]

That protection is limited when dealing with sole proprietorships, as piercing the corporate veil is rather simple in such cases.  Incorporation then is basically for tax purposes.

OK, I'll have to take your word on that, as none of the businesses in which I was involved was a sole proprietorship.

[Racehorse]

The kid IS an enemy of the revolution.  I say, take the swine's money, and give it to the working class!!

I like how you used the red text there. Very apropos.

[Manedwolf]

The kid IS an enemy of the revolution.  I say, take the swine's money, and give it to the working class!!

Error. You meant NONworking class.

[roo_ster]

in my experience i take a bath tax wise if i incorporate. i might avoid it to a degree if i were to greatly complicater my accounting procedures. ie pay some other sob

A buddy of mine inherited a trailer park from his dad, who had no will (but lawyer and accountant relationships).  He has managed it fine and is looking for a buyer.  Along the way he has had a crash course in law, accounting, taxes, etc.  He says, "I live my life according to the IRS code for corporations, now."

It is somewhat tongue-in-cheek, but he certainly has had to change the way he does a lot of things.

[Jamisjockey]

If his gross is 250k, even as a sole proprietorship, his net should be somewhat less after business and personal deductions.
However, if he has employees, uncle obama will likely mandate that he provide health insurance for them.  He might as well raise his taxes.

[Perd Hapley]

I like how you used the red text there. Very apropos.

Yes indeedy.   

[cassandra and sara's daddy]

A buddy of mine inherited a trailer park from his dad, who had no will (but lawyer and accountant relationships).  He has managed it fine and is looking for a buyer.  Along the way he has had a crash course in law, accounting, taxes, etc.  He says, "I live my life according to the IRS code for corporations, now."

It is somewhat tongue-in-cheek, but he certainly has had to change the way he does a lot of things.

i loathe the irs but no longer fear them i survived 3 personal and 3 buisness audits. only one of the buisness ones was intense. after the third personal audit i got the judge to make em lay off. i went off the books for 14 years didn't file and nothing bad happened when i resurfaced.

[De Selby]

How much additional tax money would Obama's plan take out of this kid's account, as opposed to the current taxation schemes?

[Monkeyleg]

Shootinstudent, that would depend upon any number of variables: how his business is structured (C corp, S corp, sole proprietorship); his revenues, costs and profits; and, of course, what Obama's tax plan will eventually be.

I'll do well over $250,000 in sales this year, but won't have but a portion of that as real income for myself. Back when I operated as a sole proprietorship I did alright tax-wise, until I made "too much" money. I found myself owning $32,000 to the IRS for one year, when my actual income was around $50,000.

The nice thing about C corps is that taxes on profits can be reduced a bit by operating loss or profit carry-forwards or carry-backs.

[Headless Thompson Gunner]

How much additional tax money would Obama's plan take out of this kid's account, as opposed to the current taxation schemes?

Do you really believe that the unicorns and fairies tax plan Obama is campaigning on is going to resemble what he actually implements once elected?

[De Selby]

Do you really believe that the unicorns and fairies tax plan Obama is campaigning on is going to resemble what he actually implements once elected?

Okay, if Obama's tax plan won't resemble the plan as presented, how can we make all these dire predictions about what's going to happen to this small business?

I'd think there would be at least a clear cut threat to small businesses to justify the claim that this or any other small business will be "taxed to death" under Obama.

Monkeyleg,

That would seem to be a good indictment of the current taxation scheme, which, as far as I can tell, John McCain more or less wants to make permanent.  How would Obama's tax plan have made things worse for your business, in your view?

[Monkeyleg]

Shootinstudent, I don't know that I'd call carrybacks and carryforwards a "scheme." They're just part of the screwed up tax system we've developed. If my corp shows a loss this year, I can't get back in corporate taxes any more than I paid in. If the company shows a profit next year, taxes on that profit can be reduced by using some of the excess loss from this year. It's one of the few good reasons to incorporate as an individual.

I won't personally be affected by Obama's further manipulations of the tax code because I don't qualify as "rich." In the year I was talking about, though (1990), I owed $32,000 in personal taxes for the first quarter alone. Considering that I'd actually paid myself the equivalent of $50,000 or so for the entire year, $32K was a huge tax liability. The only thing that saved me was incorporating on April 1st.

Imagine, though, what my liability would have been had I not incorporated. By Obama's standards, I would have been very rich, and that tax liability would have been much more than $32K.

Let's assume that I, like many business owners, had a good reason to continue as a sole proprietorship in 1990. That was the year I hired my first full-time employee. Prior to that I'd been using freelancers. When I added up the cost of using freelance assistants, I decided it would be somewhat more cost effective to have a full-time employee. I use the word "somewhat" because the cost difference wasn't that great, but having someone full-time took some of the burden off of me.

If I'd been taxed at a higher rate, I doubt I would have hired that assistant. Nor would I have purchased much of the new equipment that I did, which was made by employees of another company. The chain reaction.

As I look forward now, I can see how my present business will likely be affected by Obama's tax plan. Many of the items I sell are "toys," non-essentials. I've already felt the effects of the market's downturn on my sales. If those making over $250,000 a year have to hold back on hiring a new employee, that's a loss of a potential new customer for me. Even if the "rich" guy hires a new employee, but at a lower wage than he was previously willing to pay, that's a loss of a potential new customer for me.

So, even though I'm not "rich," I'll be affected, as will many, many other small business owners. The term "trickle down" has been given a negative connotation, but the fact is that money, like water, does not flow uphill.

[Perd Hapley]

shootinstudent,

I see you've tuned out the campaign noise in the past few weeks.  Since then, we've had a big flap over a guy named Joe the Plumber.  And some excerpts of radio interviews that dropped a couple of days ago.  Check those things out, and then you might see why we feel Obama's economic program is going to be so ugly.