There's a lot of talk about unemployment these days (as though it hasn't always been a topic.) They say that we have an increase in the Gross Domestic Product without hiring new employees. This means the existing employees are working more efficiently. It's the unemployed that concern this writing.
Too often, in the effort to protect the American public from businesses, we prevent them from going into business. I would like to see the government make it easier for people to establish home-based businesses. The type of thing I'm talking about is the service that someone does from his or her own home or small shop. I believe that this is a good way to help people at the lowest economic levels of society to work toward bettering themselves.
The changes that need to be made are simple. First, the IRS must create a simple packet just for the low-end, home business. Tax laws are typically too complex for the average person. By the time someone has paid an expert to figure the taxes, any profit from the home-based business is gone. If the IRS can create a simple packet that involves a contract, the expense can be reduced.
The person wishing to start a business could go to the IRS, sign a contract, and receive a kit. The kit should include all the needed forms in an easy to read format. After three months, the taxpayer returns the kit along with any taxes owed. If the person follows the instructions on a daily basis, he or she will know how much tax they owe at each step and will be able to save that out of the amount they take in. Failure to return the kit after three months, taxable income or no, would still be a crime with a fine-based penalty.
Having this standard tax packet will save money for the IRS as well. Having the paperwork all the same, handling will be streamlined which reduces processing costs. Since states will also need to create such packets for taxes, it will cut handlings costs for them as well.
Another benefit is that the simple forms will remove many deductions. Only the most simple and obvious deductions will fit on the form. This means a larger portion of income will be paid as taxes. Some might say that this is unfair to low-end taxpayers, but the tradeoffs balance this. Though they may not be able to deduct as much at this level, they are also not paying tax advisors to find every little nickel. The option to pay a tax professional would still be available it the taxpayer feels it's a better deal, but the simple packet would focus on ease of use.
The next step is at the more local level. Municipal governments must make a similar packet for meeting any local regulations. Again, the instructions have to be simple. This encourages people to establish businesses that result in municipal revenue, through fees and taxes, in the long run. Standardized form packets again streamline handling by municipal workers, as with the taxes above, thereby reducing costs.
Another item needed is a limited form of insurance. Whether from the government or from the insurance industry, there needs to be a form of liability insurance with a low cap for damages. With proper contracts, liability would be limited to direct damages or faulty materials and workmanship anyway. Hopefully our Small Business Administration can help small business people with these things.
There are plenty of programs in existence today to help people start small businesses. The Small Business Administration can help if they are properly funded. We need to make this a priority so that the average American can pull him or herself up with the dignity that befits them. If we put in a real effort, unemployment is less of an issue for everyone.