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Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

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Re: Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

#41

Post by srdev »

splat wrote: post #34
srdev wrote: post #26

Earlier quoted context omitted.

I'm conflicted on the idea of leaving the country as a solution. Its not enough to simply live and work in another country -- you're still liable for taxes. You have to fully expatriate and renounce your citizenship. This is often very difficult and time-consuming to do, and near-impossible if you're not in a skilled line of work.

Even if you do, your total assets are taxed. If you're rich enough, you'll lose ~35% of what you have if you decide to expatriate.

Ah, I was using the term incorrectly. I meant that one must renounce their citizenship in their birth country to be completely free of taxation. Expatriation can be hard. Renouncing birth citizenship extremely difficult if not impossible in some situations (catch-22s, etc)

Re: Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

#42

Post by lurker14 »

JayWilmont wrote: post #28
anamax wrote: post #10

Earlier quoted context omitted.

> The policy of forcing a decision for laid off people between 1) sitting around doing nothing (i.e. "looking for a job") and being eligible for free money vs. 2) trying to start something There was no such policy - there was no such "decision". The standards for "looking for a job" are/were low enough that one could be trying to start something at the same time. (I know - that's what I did.) While we like to talk ab…

There is such a policy, at least in New York State. Any time spent on "self-employment" activities reduces the amount of unemployment insurance money you receive.

all activities, or activities with associated revenue streams?

Re: Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

#43

Post by nirvana »

krschultz wrote: post #17
fredBuddemeyer wrote: post #6

genius. who needs voluntary transactions live venture capital or angels, what have they ever done? instead lets take money from everyone (if they don't like it we can lock them in a cage) and then give it to others who we decide are worthy.

Other option for people who don't like it: leave the country. You wouldn't know it listening to most people complaining but unemployment insurance was not something implemented in 2008, it goes back to the 1930s. That should have been plenty of warning for you to find a place with a tax rate and entitlement system to your liking. Sorry, there aren't a lot of options in the 1st world without taxes and entitlments, but…

I think "like it or leave it" isn't really a useful response, and it takes the discussion into the realm of politics. I'm not going to debate the politics, but since I did "leave it", I thought it might be enlightening to share a bit of my experience. (Leaving the USA had nothing to do with unemployment insurance.)

It is not difficult to find first world situations that don't involve burdensome taxes or regulations. One strategy would be to domicile your business in a country that doesn't tax worldwide corporate income, only local income. Believe it or not, most countries meet this criteria. Banking in a second country and living in a third, where the latter doesn't tax your worldwide income (like the USA does, but again, the US is the exception rather than the rule) would result in you effectively living tax free. (A US citizen, owing for their worldwide income would have to pay taxes on the amount earned above the living-aboard exemption.)

Further, even if we decided that we wanted to bring our business back into the USA, the USA does not want us to be located here... because at some of our founders are not US citizens and the hassle and cost of importing a foreign entrepreneur to the USA is much higher than it is for many other competitive countries.[1] There are first world countries that, believe it or not, are welcoming to entrepreneurs who want to relocate there.

So, while I'm not going to go into specifics because if I did, the possible combinations are more than could be discussed here, I can say with first hand experience that there are many, many options for doing this.

[1] Just coming in for a short term stay was more ordeal than I like to put up with, and more than we've experienced with any other country.

Re: Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

#44

Post by roc »

clarkevans wrote: post #38
chopsueyar wrote: post #36

Earlier quoted context omitted.

If you fire an employee, why do you pay unemployment? I would understand if you laid them off, but firing? Also, if you are paying for their unemployment, why is unemployment being deducted from their paycheck too?

In most states it's quite difficult to prove that you fired for cause -- performance is quite subjective. Typically the employee needs to do something dramatic & harmful for you to deny unemployment.

It's pretty easy to document poor performance. Any McJob employer can swing it and their margins are almost certainly lower than anything involving knowledge workers.

I understand that no-one likes to do the business-overhead side of things in small businesses. But either the costs of paying (undue) unemployment aren't that big of a problem, or the employer has no-one to blame but themselves for not documenting cause.

Re: Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

#45

Post by gwright »

chopsueyar wrote: post #36
philiphodgen wrote: post #32

1. I run a business. Therefore I make jobs. Or don't. 2. If I fire an employee, a portion of the cost of that person's unemployment claims is charged back to me. The employer. It isn't government largesse that funds unemployment claims. It's me. 3. Will this program be yet another potential cost to me? Hard to tell from the PR and press-gab. We'll have to see the law and how it is implemented. Devil in the details, e…

If you fire an employee, why do you pay unemployment? I would understand if you laid them off, but firing? Also, if you are paying for their unemployment, why is unemployment being deducted from their paycheck too?

I don't think people are being careful about the terminology here. Firing could mean terminating employment because someone is no longer needed (what you are calling 'laid off') but it can also mean terminating employment because they broke some rules or laws (i.e. didn't show up for work, harrased co-workers, etc).

If you are fired "with cause" (i.e. you did something wrong) you aren't eligible for unemployment. If you quit you are not eligible for unemployment. Only if you are fired "without cause" are you eligible for unemployment payments.

Re: Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

#46

Post by nirvana »

yellowbkpk wrote: post #9
fredBuddemeyer wrote: post #6

genius. who needs voluntary transactions live venture capital or angels, what have they ever done? instead lets take money from everyone (if they don't like it we can lock them in a cage) and then give it to others who we decide are worthy.

Outside of Silicon Valley (and a few other hot spots maybe) "voluntary transactions" aren't happening, so the government feels the need to step in.

I think it is a salient point that one of the reasons these "voluntary transactions" are not happening in the rest of the country is because the government has already stepped in.

I would be an angel investor, if the SEC would let me. It is silly that I could blow $20k on a bad stock investment, but can't put it into a tiny startup.

The regulatory burden and the prohibition on "non accredited investors" quells a lot of support the entreprenurial community could use.

Interestingly, you sometimes read stories about immigrants who came to the USA, built small businesses, and then helped later immigrants with investments and loans... resulting in thriving communities (the korean grocer community in LA is an example I heard about.) They wouldn't have been able to do this if they had been following SEC rules!

Re: Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

#47

Post by ctdonath »

philiphodgen wrote: post #32

1. I run a business. Therefore I make jobs. Or don't. 2. If I fire an employee, a portion of the cost of that person's unemployment claims is charged back to me. The employer. It isn't government largesse that funds unemployment claims. It's me. 3. Will this program be yet another potential cost to me? Hard to tell from the PR and press-gab. We'll have to see the law and how it is implemented. Devil in the details, e…

"2. If I fire an employee, a portion of the cost of that person's unemployment claims is charged back to me."

Can you elaborate on this? It's something I've long heard and failed to grok. How can an employer, as normal business practice, have to still pay a fired employee any amount?

Re: Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

#48

Post by nirvana »

srdev wrote: post #41
splat wrote: post #34

Earlier quoted context omitted.

Even if you do, your total assets are taxed. If you're rich enough, you'll lose ~35% of what you have if you decide to expatriate.

Ah, I was using the term incorrectly. I meant that one must renounce their citizenship in their birth country to be completely free of taxation. Expatriation can be hard. Renouncing birth citizenship extremely difficult if not impossible in some situations (catch-22s, etc)

For US citizens, to renounce you need to prove that you've paid all income taxes over the previous 5 years, pay an excise taxes on all assets being taken out of the country (which I think is %1-2%) and -- here's the kicker-- get permission of the federal government to be allowed to renounce your citizenship. If they think your earning power is significant enough, they can deny you by claiming your "renouncing to avoid taxes".

However, if you live outside the USA full time, I believe that the personal exemption on income is around $80,000. So even if you're making millions, if you pay yourself $80k or less, you can avoid income taxes in the US on your worldwide income.

Thus, holding stock in a startup that is appreciating avoids taxation, however, if you ever sell that stock, then you'd be realizing the gain and run into the issue.

PS - of course you're right that some countries simply won't allow you to renounce, and that might even end up being the case for some US citizens. I'm just giving the information I've been able to gather on this topic, not really disagreeing with you.

Re: Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

#49

Post by clarkevans »

roc wrote: post #44
clarkevans wrote: post #38

Earlier quoted context omitted.

In most states it's quite difficult to prove that you fired for cause -- performance is quite subjective. Typically the employee needs to do something dramatic & harmful for you to deny unemployment.

It's pretty easy to document poor performance. Any McJob employer can swing it and their margins are almost certainly lower than anything involving knowledge workers. I understand that no-one likes to do the business-overhead side of things in small businesses. But either the costs of paying (undue) unemployment aren't that big of a problem, or the employer has no-one to blame but themselves for not documenting cause…

There's a big difference between McJob and software development. If someone doesn't handle N customers, fails to show up on time, or has several documented customer relationship issues: it is clear cut. You have to give the employee several opportunities, etc.

If you have an equivalent recipe for a marginally performing software developer that doesn't cost more to implement than just paying the unemployment : I'd love to hear it.

Also consider team morale. Waiting for several phases of failure to "document" your case is a great way to lose your top performers and lose a customer. I think it's less expensive just to fire -- ideally /w severance in exchange for unemployment, if your state permits it.

Re: Obama's job aid plan - $10,000 to $13,000 in assistance for entrepreneurship

#50

Post by nknight »

lurker14 wrote: post #42
JayWilmont wrote: post #28

Earlier quoted context omitted.

There is such a policy, at least in New York State. Any time spent on "self-employment" activities reduces the amount of unemployment insurance money you receive.

all activities, or activities with associated revenue streams?

There are precedents for it being all activities. Particularly anything you're doing that would be in line with your usual profession, whether you're getting paid for it or not.

The rules vary by state, though.

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