Botox

Just had a cup of “Mexican hot chocolate” wow, add some cinnamon to your hot chocolate next time, it’ll blow the socks off of Swiss Miss.

I spent some time detailing my concerns over taxation on small businesses a couple of blog posts ago and I thought I’d revisit them, only because I recently read an article outlining cosmetic surgery tax in the senate health care bill. http://www.forbes.com/2009/12/07/health-care-botox-sin-tax-opinions-contributors-josh-barro.html

The main concerns I have are as economies grow out of recessions a huge factor in the recovery is through expansion and growth of small businesses, or in the VC world, the expansion stage business. With increased taxes (health care, income, etc) on these small businesses you limit and sometimes kill off their growth, thus causing a reverse trend of increased unemployment, lower state and federal tax revenue, etc. This is certainly a concern for the companies I speak, with especially the ones that are looking to expand their reach globally. In turn this effects our business as it creates less opportunities to make investments with our growth capital.

I bring up the “Botox Tax”, or the cosmetic surgery and related tax as it is really known in the senate health care bill because it is one of the ways government sanctions and taxes force the hands of consumers and business owners in a negative way. The Botox tax is an excise tax of 5% for any cosmetic surgery. This is the government’s way to raise a measly $6 billion in revenues to help pay for universal healthcare. $6 billion may sound like a lot, but it’s less than 1% of the bills total price and I believe the effect it will have is not worth the $6 billion (if the senate version were even to pass). Why is this a bad thing and or how does it relate to my work? It causes disruption in one of the few bright spots for our current economic climate; the small businesses. Disruption in this process hurts both the business and the end user alike. No, Botox does not directly relate to our process of investing in or building great companies, but taxes sure do. When the government begins to impose taxes and ultimately change consumer’s behavior towards picking a business, or worse influencing business owners on whether or not they can expand, then they are helping to restrain growth and expansion in the most powerful sector of business…the small businesses. For more info on the so called “Botox Tax” take a look at Josh Barro’s article linked above.