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Give small business owners a free, two year ride on taxes

    Anyone who has ever started a business knows what it takes to endure the process. Entrepreneurs know the diffi culties with start-up costs, making weekly payrolls and fi nding good employees who share their vision and work ethic. They know all about accounts payable (especially with predatory credit terms) and accounts receivable (especially with slow-to-pay clients). They know too well the expression, “cash fl ow is king.”
    Even the best of business plans don’t account for daunting, 80-hour workweeks in the beginning. There’s a small-business philosophy, “Pay yourself first,” which is almost never done. Sleepless nights ensue, as the angst awaiting payments from those who owe you money is unbearable. Sweat equity, requiring the company owners (and their families) to “do whatever it takes,” is a tangible investment.
    State and federal offi cials associated with small-business regulations, taxes and loans are often people who have never launched a company. They know not the struggles involved. Whenever anyone asks me how to get started, the first words from my mouth are usually, don’t do it unless you have the perseverance required. Know thyself, I say. Most small businesses fail within the first two years, even in good economic times, which America hasn’t seen since the 1990s.
    Why should state and federal governments tax small-business start-ups anything in the first two years? Suppose a person forms a limited liability company (LLC) and employs at least two legitimate, taxpaying workers. I think that owner should be allowed to write zero taxes owed on income tax forms. Yes, if the person neither accepts government subsidies nor collects unemployment checks, he/she should owe nothing. It should not matter if the business owner reports an adjusted gross income of $25,000 or $1 million during the fi rst two years.
Before filing papers, no company existed. So I ask: Why should the risk taker be taxed at all during the incubator years?
DAVID LUCIER
Niskayuna
The writer is owner and general manager of PAL Turbine Services, LLC.