Pay Your Stinkin’ Taxes, Keep Your Stinkin’ Cash
We get a lot of inquiries from small businesses through our website. I type the same email over and over, so I made a template for it. Included in that email is the following statement:
- We want you to be profitable and pay lots of taxes. We don’t operate under the scenario of “let’s do everything possible to never pay taxes.” We will help you control them to the best of our abilities, but we are never going to prescribe bad advice just to get you a tax deduction. Our strategy is to make sure your business is healthy and successful first, then we talk about taxes.
Think about it.
If your business isn’t profitable, you won’t survive for very long. If your business is profitable, you will pay taxes. Why fight against the logical conclusion? Who doesn’t want to be profitable? Oliver Wendell Holmes is credited with saying, “Taxes are what we pay for a civilized society.” I would take that one step further and say that taxes are what you pay when you own a successful business. A track record of never paying taxes leads to business failure.
Customers ask us, “how can we reduce our taxes?” Well, that’s a long list for this blog post, but suffice it to say that we recommend avenues that benefit the taxpayer while at the same time reducing tax exposure…contributing to pension plans through the business, paying bonuses to deserving team members, and things like that. We get questions about purchasing equipment or business vehicles. If you need those things, sure. If you are just buying them to get a tax deduction, then it’s a dumb thing to do. You’re spending $1 and saving maybe $.30. You just threw out the $.70 to avoid paying $.30. Would you advise your mother to do that?
So, when we work with business owners and discuss taxes, I say the same thing. I want you to pay LOTS and LOTS of taxes (because I want you to be VERY profitable).
That means your business is healthy and you have cash flow. You can’t have one without the other.
If you want cash, you gotta pay the taxes.