This is a good one. Pelosi is trying to sell the health reform bill as something helpful to the economy. lol She’s like that sales person who will swear to the patron dying on the sales floor that this juicer will fix the problem. lol Or the idiot on the radio talking about how calcium supplements will prevent cancer – but you have to take his special coral calcium, you can’t just take Tums. Oh what? You’re not worried about Cancer? Everyone in your family dies of heart disease? Well – it just so happens that my coral calcium will prevent heart disease – yes – it’s a heart-health supplement actually.

We all know, and it has been said over and over again, that our economy needs something new, a jolt.  And I believe that this legislation will unleash tremendous entrepreneurial power into our economy. — Pelosi

This reminds me of a skit by that Canadian comedy group – The Kids in the Hall:

The car won’t start, so the ‘husband’ gets out and kicks the tire. He looks to the ‘wife’, now in the driver’s seat. “Try it now.” Nothing. He opens the hood, “Try it now.” Nothing. He closes the hood. “Try it now.” Nothing.

He ends up changing the tire, and I forget what else, everything but fix the damn engine, but it’s about the same as Pelosi’s logic when it comes to economics. Nothing about passing a bill that forces companies to provide health insurance if they have more than 50 employees will stimulate entrepreneurship.

*sigh*

It’s just ridiculous. This is something around a 10% increase (probably more) in employee costs. That might not seem like much to a foolish congresswoman who’s never had to earn a living, but when you realize that a successful business is usually functioning on a profit margin of single percentage points, and that most entrepreneurial ventures fail, and that the ones that do succeed do so only after several years of losing money – you’ll understand how difficult these fancy new taxes will make it to do the things our economy needs us to do: innovate, risk, and invest.

The only entrepreneurial powers this will unleash are new solutions to keep your staff under 50 members.

Hey Noisy Dove, can you tell me the differences in business taxes in Michigan and say, Deleware and California? Why do so many companies incorporate in Deleware?

The state corporate income tax rates go as follows: Michigan 4.59, Delaware 8.7, California 8.84, as of 2008. Just one of the many reasons so many companies incorporate in Delaware is that the state doesn’t apply its state corporate income tax on corporations unless they are actually doing business in DE. The only taxes DE assesses on corporations not doing business in the state are a tax on the initial incorporation and a low yearly franchise tax. DE also has no state sales or personal property tax.

Besides taxes, the main reason DE is such an attractive state to incorporate in is the state’s large body of business-friendly business laws. If you’re smart and specify in your contracts where arbitration will occur, any lawsuits against your corp. will be settled by a Chancery Court with appointed judges – rather than elected judges or a jury court. So the decisions are well written (easy to follow) and rational (less affected by trends and political wind), based on a friendly and detailed set of laws with a long history providing numerous examples of precedence. In other words, if you’re corporation is getting sued, get sued under Delaware laws.

Laws about how DE corporations are to be administrated are simple and unrestrictive. For example, one person can function as the only share holder, director, and officer. Different kinds of businesses can exist under one corp. Shareholders can act in writing rather than holding shareholder meetings. The board of directors can include people who are not shareholders. And you don’t have to keep corporate records.

DE makes a good income from all these incorporations, so the system for incorporating is kept state-of-the-art and simple. So, bottom line, so many people incorporate in DE because it’s simpler, faster, safer, and cheaper (more profitable) than other states.

A friend of Noisy Dove had a good story to tell this week.  Enjoy..

I was talking with my employer this week about his feelings as one of the top 1% of Americans who would be surtaxed to pay for Obamacare. He began by saying he was fortunate enough that he could afford it, meaning in the grand scheme of his finances the surtax wouldn’t be a big deal to him.

He went on to state, however, what he didn’t like was some politician giving that money to some guy who didn’t care enough to work for it. He suggested a better use of that money would be to let him and others like him invest it in the economy – everyone in the 1% has to invest a certain amount in the American economy each year or have that amount surtaxed.

He then called George W. Bush a moderate. Helping me back up from off the floor, he explained that Bush’s bailouts for the auto and bank industries were bad moves for American innovation. Like all creatures, companies and their business models must die. The current auto and bank companies had their chance and after making trillions upon trillions of dollars, they finally blew it. They needed to be allowed to die so that new companies with new people and new business models could prosper. It’s the way of life; one thing must die so that another may live.

While the old dogs are suffocating beneath their debt, those newcomers could gain significant ground to take the field. Those newcomers are young bucks like us scraping to touch the American dream. Letting the old dogs live isn’t helping to spread the wealth. Letting them die so we can pick their bones does, though.