My fingers are currently stained with flour and the cooling residue of a blueberry scone that didn’t quite make the cut. I am sitting in the back office of a bakery called “The Rising Crust,” though at , nothing feels particularly on the rise except my blood pressure.
I came here to help my friend Marta look at her books, but I ended up falling into a Wikipedia rabbit hole regarding the “Window Tax” of . Back then, the English government decided that if you had more than six windows, you were wealthy enough to be squeezed. People responded by bricking up their windows. They lived in the dark just to keep a few extra shillings.
The Window Tax: When transparency became a liability, people chose the dark.
Looking at Marta’s payroll setup tonight, I realize we haven’t changed much in . We’ve just traded bricks for spreadsheets.
The Reality of Leo’s First Apron
Marta is hiring her first employee. His name is Leo, he is , and he has a smile that makes people want to buy an extra dozen cookies. Marta offered him $21 an hour because she wants to be a “good” boss.
She calculated that 40 hours a week at $21 would cost her $840 a week. It was a stretch, but she thought she could make the numbers work. Then she opened the payroll software and met the invisible inhabitants of her bank account: the tax collectors who don’t bake bread but always take a slice.
The invisible 31% tax on expansion that converts a $21 wage into a $27.51 burden.
By the time the software finished its cold, mechanical processing, that $21 an hour had mutated into a $27.51 hourly liability. Marta stared at the screen, her hand hovering over the mouse. Leo doesn’t see that extra $6.51. He doesn’t get the benefit of it in his paycheck.
In fact, he sees even less than $21 because of his own withholdings. But for Marta, the “job creator,” the government has essentially levied a 31% tax on her desire to give a young man a start in the culinary world. It feels less like a contribution to society and more like a fine for the crime of expansion.
I called Harper M.-L., a friend who describes herself as a meme anthropologist, to see if she had any insight into why we tolerate this. She didn’t disappoint. She sent me a screenshot of a popular “grindset” meme-a lion standing on a mountain of gold-and then juxtaposed it with a tax table for small business owners in the Northeast.
“The cultural narrative is that you’re a lion. But the legislative reality is that you’re a pack mule. We tell people that starting a business is the ultimate act of freedom, but the second you hire someone, you become an unpaid clerk for the IRS.”
– Harper M.-L., Meme Anthropologist
She is right. There is a profound psychological friction that occurs when you realize that the government takes more in various payroll taxes and mandates than the owner often keeps in net profit per hour of labor. We celebrate job creation in every stump speech and every campaign ad, yet the system is designed to make that first hire feel like a tactical error.
The Acronyms of Discouragement
Take the Federal Unemployment Tax Act, or FUTA. On paper, it’s a small amount. But when you add the State Unemployment Tax Act (SUTA), which can vary wildly based on how many people you’ve had to let go in the past, it becomes a tax on your own potential for failure.
If you are a new business, the state often hits you with a higher “new employer” rate, perhaps 3.11%, just because they don’t trust you yet. You are being taxed for the risk that you might not be a good boss before you’ve even had the chance to hand Leo his first apron.
This is where the disconnect lives. Policy designers in climate-controlled offices in D.C. see a 7.651% FICA match as a rounding error on a national balance sheet. They don’t see the bakery owner at realizing that the “cost of a human” is significantly higher than the “price of a human.”
When you are a small business, you don’t have a HR department or a legal team to massage these numbers. You just have a shrinking margin and a feeling of resentment that grows every time you hit ‘submit’ on a tax return.
I suspect that many small business owners stay small specifically to avoid this headache. They stay as “solopreneurs” because the moment you bring a second person into the boat, the boat starts taking on water in the form of administrative overhead. We are effectively incentivizing people to stay lonely and overworked rather than collaborative and growing.
The complexity is a tax in itself. Marta spent this week trying to understand the difference between an independent contractor and an employee, terrified that if she misclassified Leo, she’d be hit with a back-tax bill that would shutter the bakery by .
Hiring a Doctor for the Foundation
This fear isn’t irrational. It’s a learned response to a system that prioritizes compliance over commerce. It was during this moment of spiraling frustration that I suggested she look into an integrated CPA relationship.
Most people think of an accountant as someone you see once a year to find out how much you owe. But for a first-time employer, that’s like hiring a coroner when you need a doctor. You need someone who can handle the “first-hire panic” and bake the tax strategy into the business model before the first loaf of bread even goes in the oven.
For Marta, the relief came when we discussed how a firm like:
…approaches this not just as a filing requirement, but as a part of the foundational structure of the business.
Having a professional manage the payroll setup doesn’t make the taxes go away-nothing short of a revolution or a move to a deserted island would do that-but it removes the “punishment” aspect of the paperwork. It allows the owner to be a baker again, rather than a reluctant tax collector.
There is a specific kind of exhaustion that comes from doing work you hate (compliance) in order to afford the work you love (baking). When that compliance work is also a direct financial drain on your ability to pay your staff, it creates a toxic relationship with the concept of growth.
Marta shouldn’t feel like she’s “getting away with something” by hiring an employee; she should feel like she’s building a community.
I think back to those bricked-up windows in London. The people inside those houses weren’t being “cheap.” They were responding to a tax that made a basic human necessity-light-unaffordable. In the modern world, the “light” of a small business is its people.
When we tax the act of hiring so heavily and complicate it so thoroughly, we are essentially asking business owners to brick up their windows. We are asking them to work in the dark, alone, rather than opening their doors to the talent around them.
The Future of The Rising Crust
As we packed up the spreadsheets, Marta decided she would still hire Leo. But she’s doing it with her eyes wide open now. She knows that she’s not just paying a wage; she’s paying a premium for the privilege of contributing to the economy.
She’s paying $27.51 for $21 worth of labor, and she’s doing the government’s bookkeeping for free. If there is a solution, it probably starts with acknowledging that a one-person bakery is not the same thing as a multi-national corporation.
The identical percentage hit creates vastly different ripples depending on the size of the pond.
A 7.651% tax on a billion-dollar payroll is an entry on a ledger. A 7.651% tax on Marta’s first hire is the difference between her being able to afford a new oven or continuing to kick the old one until it starts.
We need to stop talking about “supporting small business” in the abstract and start looking at the actual friction points that prevent a person from becoming an employer. Until then, we will continue to have a nation of “lions” on paper who feel like “pack mules” in practice.
I left the bakery as the sun was starting to come up. The streetlights were still on, casting long shadows over the pavement. I thought about the 501 other small businesses in this zip code, all likely wrestling with the same 31-page documents and the same realization that their first hire is going to cost them more than they ever imagined.
If we want more jobs, we have to stop punishing the people who create them. It’s a simple concept, yet it seems to be the one thing our tax code refuses to grasp. We have built a system that treats a paycheck like a crime scene, and until we change that, the windows of our economy will remain half-bricked, and the lights will stay dim.
But for now, at least Leo has a job. And Marta has a CPA. And the scones, despite everything, still taste like a victory. Is it a fair system? No.
But as Harper M.-L. would say, the memes are the only thing that’s free, and even those cost you your data. We keep moving forward because the alternative-staying small, staying dark, staying alone-is a far worse fate than paying the “human tax.”
We just have to make sure we have someone in our corner who knows where the bricks are buried.
