Owning your own business or being an independent free lance worker is a nice way to make money. You can decide your own schedule, do whatever you want, and charge whatever rate for your labor. A lot of people wish to have this luxury, but it takes a certain fearlessness to dive into being responsible for keeping yourself employed. Another deterrent to employing yourself is taxes.

Before you take your income and use it to feed yourself, or pay for gas, or anything, you have to turn 30 percent of it over to the government. This means, it doesn’t matter if you profit, it doesn’t matter if you’re in debt - if a customer pays you, 30 percent goes to taxes. End of story.

Just to give a contrast, let’s say you’re an average income worker under a company. Your weekly paychecks are automatically deducted for taxes, and it is at a rate of 7 percent. This percent is also matched by the company you work for, so when the company pays you, they also pay a 7 percent rate.

Now to further that, let’s see the difference in amount in real numbers - if I made 100 US dollars under an employer (which is average for most industrialized nations), I keep 93 US dollars. Now if I made that on my own babysitting, I keep 70 dollars. Big difference. What’s more is how strange that the rate of independent workers is the same as those who make over 150,000 / year.

Now, if I were to do childcare at a daycare center, my hourly wages would be $8.50 / hr. To do babysitting on my own, I can charge anywhere between 14.00 ~ 18.00 / hr. Let’s take out the taxes from a 40 hour week, and see what I come up with. Gross income would be $340 and $560 ~ $720, respectively. Now with the tax rates: $316 and $392 ~ $504. Wow, that’s pretty comparable.

Let me explain why I rather not work for a company. Let’s see how much my old daycare job made… each kid that enters there pays $500 / wk to enroll. State law says that the ratio between adult and child is 1:7. Despite the fact that we were always understaffed, let’s just say that each working adult made $3,500 for the company. Now, working 40 hours a week, they only see $340 of it ($316 after taxes). What percentage is that? NINE.

There is money in the market, and I respect the value of my labor. I feel too that the quality of my labor reflects in a smaller amount of children per adult ratio, as well as better relationships and communal development. This is also where my life complements the work I do, and here’s a place to be creative. I’m not exactly trying to earn my way up to a mansion. I’m not even trying to expand and have “employees”.

The government could give less of a shit towards us workers. With minimum wage stagnating and policies that support corporate rule, taxes is another way to keep us in line with ‘patriotism’. It is treason not to pay taxes, so they say. They also say, before we can even feed ourselves, we have to turn the fruit of our labor to the government. They want their cut first. (Not to mention that it is damn near impossible to make a living at an hourly rate of 8.50 / hr).

Technorati Tags: business, worker, make money, taxes, income