New business

John and Mary Smith, a young married couple wanted to start their own business. They knew that only one in five startups would make it past five years and even then the chances of earning more than just working for someone else was not good. They put up all of their savings, borrowed from their parents and took a second mortgage on their home and went for it. They worked long hours, seven days a week and after a couple of years they begin to see some extra profits which of course went right back into the business. Ten years later they had a growing business with 20 full time employees. They still worked long hours but now they had some real profits to show for their effort. They had postponed having a family and now were considering children. Last year they had $500,000 profit after expenses and planned on investing half of that to expand the business. The $250,000 after business investment was considered personal income so they had to pay tax on that. After setting aside the half for business expansion they were left with $250,000. From that they paid $90,000 in federal and state income tax, $38,000 in self-employment tax and $7,000 in Medicaid tax. Then they paid $20,000 for health and disability insurance and put $18,000 into a 401K for their retirement. That left them with $95,000 to pay for things like house and car payments, utilities and property tax. They are still each working 60 hours a week which means 6,000 hours per year and dividing that into $95,000 comes to $16 per hour. They get no paid sick days, holidays personal days or vacation like their employees. Then they heard their congressman say the one-percenters should pay more taxes and one-percenters are families who make over $475,000.