Dr. Martin Hash Podcast

Small business literally can't save money for a rainy day or future expansion because they must pass the profits through to the owners, so it's the owners, not the business, doing those things. Most small business owners obviously don't do their own taxes because it's amazing how many of them don't understand that they pay personal taxes on all the business's profits at their own federal tax rates, plus Self Employment tax on what they consider their salary. What they leave in the business is essentially a new loan to the business. 99% of businesses are pass through like this.

Small businesses finance through founder loans, bank loans, or stock; however, 1% of business, the giant C corps, can save money, which is one of the biggest distortions of the Capitalist System. These companies exploit their ability to hoard cash to slight their shareholders, bypass federal taxes, and subsidize the lifestyles of The Rich. They rarely hand out the profits in the form of dividends, and when they do, The Rich pay only a fraction of taxes they would normally pay because they're subsidized by all the other stockholders. If the corporation was not allowed to save profits, then The Rich would have to pay taxes on their income at their own progressive tax rates. If corporations couldn't save money, they wouldn't have elaborate off-shore tax schemes, they would be more likely to reinvest, or reward their stockholders. It would be better for everyone involved if no business be allowed to save money.