Taxes: A Problem or a Tension?
Mildly Spicy Take 🌶️
Most business owners instinctively say, “I want to pay as little tax as possible,” but my thinking lately is that taxes aren’t just something to avoid—they’re a cost of doing business that should be strategically managed, just like any other significant line item on the P&L.
Taxes: A Problem or a Tension?
• A problem is something that can be solved—like eliminating unnecessary expenses, fixing inefficiencies, or addressing cash flow gaps.
• A tension is something that must be managed over time—like balancing risk vs. reward, short-term vs. long-term decisions.
Taxes aren’t going away (as far as we know). They’re a tension to be managed.
The goal shouldn’t just be to straight up minimize taxes but to optimize them in a way that aligns with business objectives.
(here is the 🌶️ ) Reframing Taxes as a Managed Expense
Most of us treat taxes as a reactionary event (yes this even includes proactive tax planning)
But if they were treated as a managed expense:
1. They’d be part of P&L strategy: Businesses make decisions about payroll, marketing, and capital investment—why shouldn’t the total tax cost be part of the same conversation? Is it because really only the owner(s) are the ones impacted by this?
2. Taxes could be weighed against growth opportunities: Sometimes, paying more tax means the business is thriving. This also means that significant money flows through to the owners and taxes must be paid.
Taxes are a real flexibility killer
Cash that could go to reinvesting in the company, hiring more people, or expanding operations is instead allocated to taxes... (here is me wishing we could retain them in the biz and avoid taxes unless taken by the owners)
Conclusion
What if they could be a managed, strategic expense—just like payroll, marketing, or capital expenditures.
It’s not about avoiding tax; it’s about making smarter financial decisions that weigh tax costs against business growth. And that shift in mindset? It could lead to significantly better financial outcomes for business owners and the economy as a whole.
