Kara and I financed our business ourselves for the first few years before getting outside funding. Our business has created jobs in California and in a few other states.
Anyone in the beverage industry knows that when you get in, you are investing ahead of growth. So you will probably lose money, and a lot of it, before you start to make money. One thing that takes the pain out of this reality for us is that in California you could take advantage of business losses to offset income and reduce taxes.
Not anymore. California's economy is in rough shape. So the state is trying to increase tax revenue. California suspended the net operating losses (NOL) tax provision for businesses. So if you lose money in one year, you no longer can apply that loss to profitable years. The state says it can't afford to let us use the NOLs. How do they think that we can afford it?
As a small business owner, I invested ahead of growth and created jobs. By suspending the use of the net operating loss tax deduction, California changed the deal in a way that cost my wife and I almost $30,000 last year. This year it will be more than that.
Not all small businesses create jobs, but a bunch of us do. But we shouldn't be penalized for taking that chance. California can't afford to not let small businesses create jobs.
In case you haven't heard, President Obama wants the wealthiest to pay more in taxes.
|Government sues America's largest student loan company|
|Paul McCartney sues to get Beatles songs back from Sony|
|Drugmaker fined $100 million for hiking price of drug for infants 85,000%|
|Trump University settlement: $25 million payment delivered two days before inauguration|
|McDonald's just tweaked the Big Mac|