.......... He did take over half of the earnings, but provided cell phones and laptops to all his girls and handled marketing and scheduling. He was able to [B]introduce them to an elite group of clients (This is also called marketing) that they would not have been able to reach on their own. He even handled most of their medical and dental needs.......He did have "security" and they did provide protection if it was needed, but stayed off the radar at all times.
....... The manager does take a chunk of the profit, but at least you don't have to pay taxes
(What? Could this be jail time? Yes, and it has!) to good old Uncle Sam. In most businesses management and security are usually a necessity as well as marketing and finance. If run properly everyone wins.
If you put it in perspective, every one of us that has a legitimate job has a pimp or if you own your own business you are a pimp. The workers make a shit load of money for the owners and get a small percentage of that and the owners take the profits and pay there employees a small percentage. If you do not perform up to par you get disciplinary actions taken against you and can loose your job. Sometimes we are even forced to do shit we don't want to do and we do it anyway to keep our jobs.
Originally Posted by GiveMeLibertyOrGiveMeHead
Just to make a couple of points:
Income is not profit. Income supports all business areas such as the bold print. Income supports payroll, and taxes.
The big challenge is: we all have to pay taxes. If you think you are getting away with not paying taxes, one is only limiting the business organization and growth.
If we declare all of the income and pay the taxes on the payroll, we can declare the expenses also. These expenses include cost of hotel rooms, travel, cars, gasoline, car repairs used in the business, medical expenses and employee benefits, etc. Likewise the employees have paid their taxes (withholding) and maybe received health benefits and a company car with all expenses paid tax free, because it is owned by the business.
But when we try to hide money from the government, they have an incentive to shut you down. With every tax audit, in every business, that I have been involved with; the very first thing that the government asked for is the record of the tax withheld from the payroll. They want their share from every business. The payroll tax is the big tax, not the business tax.
By the time many business are done with the expense side there may be little to no profit to the business. Business can be run with very low profits for years. But, the payroll has been taxed and the IRS is happy. The taxes on payroll are huge, and business have to contribute to the payroll taxes. In reality, business are the tax collector for the IRS because we turn in the payroll taxes. In most cases the government gets the money before the employees get their paychecks. There is always talk about taxing business by those who don't know that the big tax is on every paycheck that the employees receive.
JR
