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Comment by nawitus | Hacker News Reader

At least in Finland entrepreneurs are taxed less than many full-time employees. Corporations are taxed at a flat percentage (about 28% of the profits), while income taxes are progressive and up to 50%. In fact, your argument doesn't make much sense.

High taxation doesn't logically imply that it's necessarily unrewarding to become an entrepreneur but rewarding to be a full-time employe. You can have high taxes for entrepreneurs and low taxes for employees, or high taxes for both, of low taxes for both, or high taxes for employees and low taxes for entrepreuners.

A lot of high-earning individuals are actually using the lower tax rate of corporations to lower their tax rate. If you look at a graph of tax rate versus income, it slowly increases, but after about 60k/year it becomes possible to lower the tax rate using tax palnning.

1. http://liljat.fi/2011/04/isojen-puolueiden-aanet-menevat-kan...

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  > At least in Finland entrepreneurs are taxed less than many full-time employees.

It is true in high income levels that you can gain with tax planning, but I wouldn't say many are taxed less. Actually taxes/costs are pretty hurting for many starting entrepreneurs or small businesses.

If entrepreneur wants money out of the company (like for rent), she pays the taxes twice. Once as a corporation (28%) and then again as capital gains tax and/or as an income tax (+ all the costs that comes with employing yourself). Rule thumb for starting entrepreneurs that you need to make at least twice the money you want to make as an individual since taxes and costs the other half.

This is more of a case that wealthy individuals have more options and sometimes they use them and not about entrepreneurship. If you don't have a high income, you're probably paying more taxes(+costs) as entrepreneur than as an employee.

>If entrepreneur wants money out of the company (like for rent), she pays the taxes twice. Once as a corporation (28%) and then again as capital gains tax and/or as an income tax (+ all the costs that comes with employing yourself). Rule thumb for starting entrepreneurs that you need to make at least twice the money you want to make as an individual since taxes and costs the other half.

An entrepreuner may be taxed the same way for his/her work as an employee is if he/she wants to. If he pays the income tax, I think that can be reduced from the corporation's profit tax just like any other corporation. There's also tax free possibilities up to 60 000€.

I don't see why the entrepreneur wouldn't just pay herself a salary to make rent. That would be deductible from the corporate tax as an expense.

A 2010 headline from Arctic Startup read: Killing Finnish Entrepreneurship With Tax

http://www.arcticstartup.com/2010/02/24/killing-finnish-entr...

Skim through the comments to the article: what are the general themes that are brought up?

You can provide your own arguments.

Anyway, obviously there are people who think entrepreneurs are taxed too much in Finland. That has nothing to do with my point, though.

A lot of high-earning individuals are actually using the lower tax rate of corporations to lower their tax rate.

So, exactly what happens in the USA. The bottom rung gets no tax, the top rung evades tax, and the middle rung bears the brunt?

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