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Does taxation have a negative effect on small businesses? Essay sample

Taxation Essay sample

Taxation is a guarantee of common welfare. This part of our bills comes to building infrastructure and providing social benefits. However, taxes often collide with our own financial interests. While individuals rarely suffer from extra taxes, business owners are expected to give a generous part of their income to the federal budget. Even small businesses are obliged to pay a pack of taxes, which prevents companies from expanding and creating new workplaces.


According to the Affordable Care Act, companies with more than 50 employees have to provide health care insurance to their workers. Avoidance will drag penalty so that small companies often lay off full-time employees. Giving workers paychecks also will not save businesses from extra spending. Business owners shall put the withheld sum of money into a federal tax collection account. Small companies with self-employed owners shall also pay a collection of taxes. Here we have self-employment tax plus federal income tax, Social Security, Medicare, and federal unemployment taxes. Even businesses that start as family-owned operations shall pay an estate tax. For this reason, more than two-thirds of these businesses do not pass to the next generations.