I've come around on this issue over the past several years. As a self-employed artist, it hurts me like hell to wait and wait for a client to pay, and then have to deduct 25% of that hard-earned, much-needed cash right off the top to feed into Uncle's gaping maw. In effect, for every four hours I work I only get paid for three. If there were no income tax, every hour I worked would be an hour I got paid for. That fact alone makes the HR25 an attractive proposition. When you deduct the costs of tax prep, bookkeeping, and records maintenance (and why do I have to pay to keep the IRS's records for them, anyway?), it sounds even better.
I will be very surprised if HR25 goes anywhere anytime soon, but I'm beginning to hope that it or something like it will eventually pass. Never mind the financial relief — the relief I feel from no longer having the IRS hold a loaded gun to my temple would be worth it.
Yea, this way you could just wait and wait for a client to pay an additional 30% you'd have to send (off the top) "to feed into Uncle's gaping maw".
You say but wait I won't have income tax to pay...no you won't you'll have a new 30% sales tax to pay on some things you've never had to pay tax on before.
Even the article, claiming reduced prices by 22% says it comes out the same...so how could YOU reduce your prices, collect and remit a new tax, pay sales taxes yourself AND maintain your current lifestyle?
Hey, I`m self employed as well and you don`t even want to know the kind of tax hell I go through every year. Matter of fact I just finished up 2 weeks ago after making a few mistakes on my deductions, I had to file 2 amendments which probably shorted out the IRS computers. They sent back the money I paid them, I sent it back, then they claimed I owed them 40 grand which almost literally gave me a heart attck. Then I hired an accountant to straighten everything out, gave him power of attorney, and I had to get copies of all the checks I ever wrote them through 2003, and I still haven`t heard back from them and we are now into month 5. Just imagine what kind of hell it`s going to be like if Kerry wins!
Next year will begin to push to enactment. First we have to re-elect the President who will gladly sign it.
As a self-employed artist, have you been selling your stuff directly to the client?
If so, you are responsible for being registered with your state- if sales taxes apply-and COLLECTING sales taxes from your buyer on every piece you sell. AND KEEPING RECORDS.
If you are selling thru a gallery, sort of like consignment, then the gallery is processing the sales taxes when they handle the transaction for you.
If you are selling direct and not collecting sales tax and passing it on to the state, you may have a serious violation on your hands. Check with your CPA.
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