Consulting Fees

[Craig S.]

> ----- Original Message -----
> From: "Derek A. Neighbors" <derek@gnue.org>
> To: <plug-discuss@lists.plug.phoenix.az.us>
> Sent: Tuesday, March 05, 2002 7:07 AM
> Subject: Re: Consulting Fees

>
> >
> > Based on these numbers anything more than 80 an hour is HIGHWAY robbery.
> >  As you would only be working half a year to earn 60,000 or if working a
> > full year making 120,000 with full benefits etc included in the
> > calculation.  I just ask that you re-evaluate bagging on 'the microsoft
> > tax' if you are charging more than 80 an hour and ask are you charging
> > 'the consultant tax'?
> >
> > ;)
>
>

hmmm  first off employers contribute more than 10% of wages to taxes, 10% is almost swallowed by FICA or whatever the heck it is called now.
Then their are unemployment insurance fees, Federal and State matching contributions, etc. etc. etc. When employed as a consultant YOU get to
pay all this. One can voluntarily forego the FICA route but this knocks you out of the running for social security when you retire and
Medicare/Medicaid as well I believe (not sure on that though). Seeing as how I have been contributing to social security for about 20 years
now I am unwilling to ditch it (I have a sizeable amount built up and I already qualify for benefits) even though it may not be there when I
am supposed to retire around the year 2035.
The second point is that whatever money you make must sustain all your overhead expenses. These include transportation, fuel, lodging,
equipment, etc. Guess what, all those are taxed to which means you need to make up that loss somehow and the consumer is it.
Third you need to make enough to keep your wallet going through the bad times (this includes the taxes, just because you go without money
doesn't mean the government isn't going to without money).
Now we can more properly assess the worth of a person's services. With all this front end crap to deal with one needs to charge a lot of
money to make any money. I figure if a person working for themselves grosses $75 an hour they actually take home around $15-$20 an hour.
Pretty big discrepancy eh? Still think taxing those evil corporations is going to lessen your tax burden. As you can see, taxes increase
overhead which increases operating costs which get passed on to the consumer. Don't like then start going for lower taxes and a whole lot of
things will cost a whole lot less.

I guess this turned into a anti-taxation rant but it wasn't meant as such. Just a matter of fact way of evaluating operating expenses and how
they get passed on to consumers.

Craig S.