Egg Farmer needs to clarify... It is section 179 depreciate, not accelerated depreciation that is a problem. Section 179 allows businesses to completely write off a new piece of equipment. The state of minnesota does not allow the deduction or only a portion of the total amount the federal section 179 allows. If a business person cannot take it both on the federal and state, what is the point... In our case we don't take the full amount of section 179 tax deduction, because it doesn't help on the state tax return. Of course, my good friend across the state line can take the section 179 both on the state and federal tax. All these different tax deductions and/or incentives that are given to businesses I understand (we take advantage of as many as we can). The problem is that the playing field becomes uneven. I am not arguing that the government should some how make it "even" or "fair" for all, because innovation and technology will always disrupt the playing field. What I think the role of government can or should play is to use its limited resources in shaping a better playing field (better infrastructure, simplifying the tax code and security), which would benefit all.A few thoughts. First, it is easy for the folks who don't run a company to see the day to day effects of our taxation policy. How we tax matters. Second, if I ever want to run a small business, boy I need an education. Third, I'd be interested in Egg Farmer's take, do you think that services you get in MN (better infrastructure, better schools, etc) and the closer proximity to large population centers outweigh the higher taxes? Life is full of trade offs (no matter what Congress says), so is this a worthwhile trade off?
Monday, November 22, 2010
A Real Business Sense
From the Comments of the previous post that should be brought to our attention: