Tuesday, May 14, 2013

The Difference Between Texas & New York In Helping Small Business

 Law Prof Josh Blackman takes a critical look at a New York Times article on the libertarian nature of Texas as to regulations on such things as business regulations in Texas. The article has the recent West Texas explosion working in the background. See “Antipathy Toward Regulations” After West, Texas Explosion

I though he made an interesting person observation at the end.

I have a somewhat related comparison between living in New York and Texas, which has suited me quite well. Recently, I had to file the state franchise taxes for the LLC I incorporated in Texas this year. The process was absolutely painless. The website not only walked me through the process–no need to buy any software–but told me that based on my paltry revenues in 2012, I was below the “no-tax-due threshold.” In other words, I owed nothing. This small vignette stands in stark contrast to my previous experiences with corporate taxes. When I was in college, I incorporated a business in New York to provide web design services. My first year in business, I think I paid more in taxes and tax-preparation fees than I earned in revenue. In the second year, it about evened out. By the third year, I said forget it, it wasn’t worth paying all the taxes. I would operate as a sole proprietor  I shut down the corporation (at some cost). These are the costs that are hidden with regulatory burdens–the company that simply ceases to exist. This was an early foray into shrugging.

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