Heather0: >> I actually met with several business owners this morning and their discussion was whether or not there would be any reason to continue to be business owners. They all currently GROSS over $250,000. They all "bring home" less than $60,000 (and all were in business with their spouses, so that is household income to them). Even if they could get their "optimal" cost of sale and overhead to 26% each (max), if they have to pay 40% tax on top of that then that would only leave them $24,000/yr to live off of.
I'm hoping that your reference to ">$250,000" isn't an indirect reference to Obama's tax plan? If yes, then those several business owners have sadly been misinformed because the key number for them is the "<$60,0000" NOT the $250,000. That's one way Obama's opponents keep trying to confuse people to vote against their own interests. It's one thing to debate the issues and discuss whose ideas are better but it's another to intentionally aid people in misunderstanding what the other party has proposed. Your friends sounds just a misinformed as Joe the Plumber ( <http://www.huffingtonpost.com/2008/10/16/joe-the-plumber-is-it-see_n_135211 .html> http://www.huffingtonpost.com/2008/10/16/joe-the-plumber-is-it-see_n_135211. html) Taxes are calculated on TAXABLE INCOME (something closer to NET) not on GROSS. According to Obama's plan <http://www.washingtonpost.com/wp-dyn/content/story/2008/06/09/ST20080609009 50.html> http://www.washingtonpost.com/wp-dyn/content/story/2008/06/09/ST200806090095 0.html your friends would likely be paying ~3.6% less in taxes after his new plan goes into effect, assuming it does; not always certain given congress. That's also assuming that each of your friend's spouses makes about half of $60,000, or ~$30,000 each. >From the 2008 Tax schedule that would put your friends in a 15% tax bracket: <http://taxes.about.com/od/2008taxes/qt/2008_tax_rates.htm> http://taxes.about.com/od/2008taxes/qt/2008_tax_rates.htm; ignoring the 3% tax savings their comes out to taxes of ~$9000/year and take home of ~$51,000; much better than $24,000. So if your friends are trying to decide to continue their business or not based on believing that they will only be able to make $24,000 off of $60,000 in take home and $250,000 in gross sales then they are planning to make a huge life decision on really faulty data. FWIW. -Mike Schinkel http://mikeschinkel.com P.S. All that said, I can't follow your assumptions or your math. Where does the 26% cost of sales come in? Cost of sales would be subtracted from the gross before the "bring home" income. Maybe you could clarify? _____ From: [email protected] [mailto:[EMAIL PROTECTED] On Behalf Of HeatherO Sent: Monday, October 20, 2008 2:26 PM To: [email protected] Subject: [Coworking] Re: Impact of Financial Crisis on Coworking We work with a LOT of small businesses, and here are my thoughts/expectations (for what that is worth:)! our space isn't open yet). We have a huge technology contingent in our area (near research triangle park), and layoffs are prevalent this time of year every year (we haven't seen higher numbers than in years past at this point). When layoffs do occur, many choose to go the "consulting" route which would certainly be a plus for coworking space. Most people don't necessarily CHOOSE that route (out of fear of losing that "stability of a paycheck"), although everyone that I know that has been laid off and made the decision to go that route (as opposed to just doing it "until they get a real job") has made far more money. We have seen a lot of people start small businesses in the past few years (and in the past 2 yrs 100% of the businesses that we have worked with were women owned by the way). In terms of that trend, What remains to be seen is the election and that is where the big ? is. I actually met with several business owners this morning and their discussion was whether or not there would be any reason to continue to be business owners. They all currently GROSS over $250,000. They all "bring home" less than $60,000 (and all were in business with their spouses, so that is household income to them). Even if they could get their "optimal" cost of sale and overhead to 26% each (max), if they have to pay 40% tax on top of that then that would only leave them $24,000/yr to live off of. Hopefully, since most folks using coworking space tend to be sole proprietors, and don't really have a lot of expenses, that may not make a big difference in how many people would be working in such space. It certainly may affect the decision of people considering "opening and owning" such space. It's definitely making us think long and hard about it! Also in terms of whether to lease vs. buy. We will be waiting until the 5th to "pull the trigger" as the turnout will affect our current plans. At Your Service, Heather O' "Let us get you where you want to go!" <http://1unv.com/ujuo00/c.map> Click Here On Sat, Oct 18, 2008 at 12:37 PM, [EMAIL PROTECTED] <[EMAIL PROTECTED]> wrote: Hi: My name is Steve King and I'm a long time lurker on this site:). I'm a researcher focused on small business and I'm curious how the current economic turbulence is impacting coworking. I'm also interested in how the you think the recession is going to impact coworking and the coworking movement over the next year. In past recessions, small business formation increased due to declines in traditional employment opportunities. And during and after the 2001 recession the number of single person businesses grew much faster than before. The growth rate also slowed as the economy improved. So what do you think?? Will recession increase the demand for coworking space? Will more people choose or be forced to go out on their own?? Will you get more corporate traction as companies reduce their office spaces?? Other impacts?? Thanks for the help. Steve www.emergentresearch.com --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Coworking" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/coworking?hl=en -~----------~----~----~----~------~----~------~--~---
