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It may be because I am currently dealing with a tax error that's causing a nightmare from a previous startup, but I feel like the government keeps saying to me

by hzlz 17y ago

It may be because I am currently dealing with a tax error that's causing a nightmare from a previous startup, but I feel like the government keeps saying to me through all these complicated tax rules and increases, "Please don't do another startup. Please don't build things for people or create jobs. Yeah, we'll let you, but we'll make your life a huge annoyance if you try." I like to hack and I like building things for customers, but last week I spent most of the week filling out government forms. Another 3.8% on investment income (plus the proposed 5% cap gains increase for a total of 8.8%) won't kill me, but it's starting to feel like the straw the broke the camel's back. I'll probably do the next startup. At the same time, I angel invest in 3-4 companies a year. I like to find kids who were like me at some university labs, invest in their ideas, and what them create cool companies. I may give that up. Since this isn't a political forum, I won't say which side I'm for. But I will say that I'm angry at both sides for the $1T giveaway to the investment bankers and now to the way the CBO numbers have been gamed. (tmp acct, b/c I don't want to discuss my tax issues under the regular acct)

tptacek 17y ago
How is the government asking you not to create jobs? I'm unclear on that.
- hzlz 17y ago
  I build startups. So far, pretty small, but I've created 16 jobs so far in my career (approximately--it's hard to track what happens to your org after acquisition). I'm proud of that. I also angel invest. Thus far, those companies aren't that old, but my marginal contribution is worth at least several jobs. When they make it a hassle to create startups and to invest, I spend less time building startups and more time chilling at home. When they make it more expensive, I do less angel investing. It's hard to quantify--I can't tell you how much impact it has on me personally (though it definitely has some). But when instead of looking at me individually, you look at the expected values across aggregates, economists show real, substantial effects. And, time many, many hours I've wasted on forms, letters, arguments, etc recently are all time that could have been spent coding or with customers.
  - tptacek 17y ago
    Can you offer some insight into the recent forms, letters, and arguments? I'm wondering what I have to look forward to.
    - hzlz 17y ago
      First, this is not a "woe is me" tale. My life is pretty good. If I do less is startups, I've done pretty well. We're very far from socialism. This one was actually pretty simple. An acquirer filed a 1099 in the incorrect category. We submitted an amended one, but the IRS wants to tax at teh higher rate. And, with giants penalties and interest. You basically have to a) pay the amount they incorrectly claim you owe plus the interest and penalties up-front. Then beg for your money back and b) pay lawyers to try to get them to actually respond. Once the IRS has your money, it's pretty much impossible to contact them and argue. The actual form we filled out, the 843, is pretty simple. [As an unrelated point, if you're in CA, the current cap gains rate is 15% federal + 9.3 CA income + 1% CA mental health=25.3%. If if goes to the proposed 20% federal + 3.8% medicare + 9.3% CA income + 1% CA mental mental health=34.1%, that's a 34% increase on the taxes on startups in the course of a year... Granted, I care more about the hassle, but it's made me think.]
      - tptacek 17y ago
        Thanks!

by hzlz 17y ago

tptacek 17y ago

How is the government asking you not to create jobs? I'm unclear on that.

hzlz 17y ago
I build startups. So far, pretty small, but I've created 16 jobs so far in my career (approximately--it's hard to track what happens to your org after acquisition). I'm proud of that. I also angel invest. Thus far, those companies aren't that old, but my marginal contribution is worth at least several jobs. When they make it a hassle to create startups and to invest, I spend less time building startups and more time chilling at home. When they make it more expensive, I do less angel investing. It's hard to quantify--I can't tell you how much impact it has on me personally (though it definitely has some). But when instead of looking at me individually, you look at the expected values across aggregates, economists show real, substantial effects. And, time many, many hours I've wasted on forms, letters, arguments, etc recently are all time that could have been spent coding or with customers.
- tptacek 17y ago
  Can you offer some insight into the recent forms, letters, and arguments? I'm wondering what I have to look forward to.
  - hzlz 17y ago
    First, this is not a "woe is me" tale. My life is pretty good. If I do less is startups, I've done pretty well. We're very far from socialism. This one was actually pretty simple. An acquirer filed a 1099 in the incorrect category. We submitted an amended one, but the IRS wants to tax at teh higher rate. And, with giants penalties and interest. You basically have to a) pay the amount they incorrectly claim you owe plus the interest and penalties up-front. Then beg for your money back and b) pay lawyers to try to get them to actually respond. Once the IRS has your money, it's pretty much impossible to contact them and argue. The actual form we filled out, the 843, is pretty simple. [As an unrelated point, if you're in CA, the current cap gains rate is 15% federal + 9.3 CA income + 1% CA mental health=25.3%. If if goes to the proposed 20% federal + 3.8% medicare + 9.3% CA income + 1% CA mental mental health=34.1%, that's a 34% increase on the taxes on startups in the course of a year... Granted, I care more about the hassle, but it's made me think.]
    - tptacek 17y ago
      Thanks!