The first individual income tax in the United States was enacted in 1861 to finance the Civil War. In 1862, the first year these taxes were actually collected, the rate was 3% of income over $600 and an additional 2% of income over $10,000. After the war was over, the US government no longer needed the revenue and in 1872 congress repealed the income tax.
In 1909, income tax was again proposed, but Republicans in the Senate effectively killed the measure through a compromise that allowed a one percent tax on corporate income over $5,000 and sponsored a constitutional amendment that would allow income to be taxed by the federal government without regard to state apportionment or the census as required by the constitution. Senate Republicans were confident the individual states would never approve the amendment, but by 1912 the Democratic Party had won control of most state elections and both houses of Congress. On February 25, 1913, the required 36 states had approved the Sixteenth Amendment and on October 3, 1913 both houses of Congress passed the 1913 Tax Act.
The first tax was only on “high income” individuals, defined as those who made over $3,000 for singles and $4,000 for married taxpayers. The tax rate gradually increased from 1% to a top rate of 7% based on total income.
Last week I outlined five kinds of online tools every freelancer needs; this week I’m back with five more. Online tools are especially valuable for freelancers because a) they tend to be affordable and even free, b) they are accessible from wherever you find yourself working, and c) they shift responsibility for security, backup, and upgrading from the lone creative professional with plenty of other things on his or her mind to the service’s IT professionals. In essence, they allow you to “outsource” your technology needs to people who know technology best, so you can focus on the writing, designing, programming, or consulting that are your bread and butter.
File Sharing
There are many circumstances in which you may need to share files with a client, interviewee, prospective employer, or other freelancer working on a related project. While small files – a couple of documents, a few images, or source code for a software patch – can generally be sent by email, email isn’t always up to snuff. Large files are often rejected by email services, attachments can be stripped off by corporate security scanners, and overactive spam filters can block email without anyone being the wiser.
Services like drop.io and Box.net allow you to upload large files and send a link to your recipient so he or she can download and view your files. You can use drop.io to upload files up to 100MB, adding password protection or an expiration date in the “Settings” if you wish. Once a “drop” is created, you can continue to add files through the web interface or by a host of other methods including email, Twitter, a Firefox add-on, even by telephone (to record voice messages). Box.net works slightly differently, offering 1GB of storage (for free accounts; paid accounts offer up to “unlimited” storage) and functioning as an online hard drive. In fact, you can even mount it as a virtual drive on your desktop. Box.net allows you to share a link several ways (email, Twitter, LinkedIn, and more) and interfaces with other services like Google Docs, Zoho, FedEx Internet printing, and Salesforce. Plus, common file types can be edited directly in Box.net, allowing you to collaborate live.
If you regularly share files with someone you have an ongoing relationship with – a recurring client, for example – you may want to bypass the Web and share files directly using Dropbox. When you install Dropbox on your system, it allows you to create a folder that is linked to a folder on another system – say, on a client’s desktop (of course, the client needs to be running the software as well). Once the folder pair is created, your Dropbox folder works like any other folder on your system; you can drag and drop, cut and paste, create and files, create and delete subfolders, rename, and so on. The only difference is that any change you make to a file in your Dropbox folder is automatically made in the linked folder on the other system. (PS I also use Dropbox to backup files from my netbook to my desktop computer!)
Calendar
Every freelancer needs a calendar, and online calendars offer many advantages – they can integrate with other online services, send reminders by email or text message, and sync with your phone. Although there are plenty of good ones out there, for my money the king of online calendars is Google Calendar. A natural-language interface allows you to enter upcoming events using phrases like “Lunch with Client X Tues 12:30pm at Mel’s Diner” (of course, you can enter events the “old-fashioned way”, by filling out a form, as well). You can create share your calendar with people you choose (like a business partner or spouse) and create different calendars for different purposes (like one with personal events to share with your family and one with business events to share with your partners). A growing number of online services, such as Facebook and Twitvite, allow you to save events directly to your Google Calendar, making it even more useful.
Notes
Having a centralized, digital place to store notes, plus the ability to access them from anywhere, is crucial for freelancers. Nobody likes their Moleskin more than me, but after losing a few, I sing the praises of backup-ready digital notes loudly and proudly. Online notebooks are perfect for taking notes during meetings with a client (or transcribing them after), capturing ideas that occur to you on the road (or in the bathroom…), or saving Web pages for later reading – the good ones are available to you wherever and however you have an Internet connection, whether through your own PC, a client’s PC, a public terminal, or a web-enabled phone.
Two of the best online notebooks are the sound-alike Evernote and Ubernote. Evernote is accessed on your desktop through a dedicated client that allows you to drag and drop files into it; notes are synced online and to any other computers you run the client on. Ubernote is strictly online. Both allow you to send notes via email or instant messenger, as well as simply by typing directly into the application or site, and both will save text from the Web using a bookmarklet you drag onto your browser’s toolbar. Evernote also allows you to add notes by Twitter and even by voice mail! Plus, Evernote analyzes text in images, making it searchable (although you can’t otherwise use or manipulate the text). Both can be accessed through a mobile webpage, and Evernote also has dedicated applications for several smartphones including the iPhone. While Evernote is slightly more feature-rich, check them both out (they’re both free) – each has a slightly different “feel” that may appeal to different people and different working styles.
Project Management
Note-taking applications are fine for sketching out ideas, but for anything really complex, a good project management system is essential. There are literally hundreds, if not thousands, of project managers (PMs from now on) out there, aimed at everything from personal use to coordinating entire corporations. As a freelancer, you can avoid the really complex stuff – all you need is a place to list your projects, lay out the steps involved, assign tasks, and schedule milestones and deliverables. Add the ability to attach files and access your plans and supporting materials from anywhere, and you’re golden.
Basecamp has made a name for itself as the gold standard for online PMs – it’s attractive, highly functional, and designed for day-to-day use by individuals and small teams. It’s not free (there are remarkably few free online PMs around these days), but it’s not expensive either. If you don’t need the milestones (like me – most of my work involves projects with only one milestone, the completed piece) you might find a more individual-focused PM useful. Nozbe, for example, is designed around David Allen’s GTD (Getting Things Done) personal productivity system, allowing you to assign tasks to both the projects they belong to and the context (at your computer, at the office, at home, etc.) where you intend to work on them.
Internet Printing
If you’re on the go a lot, and don’t want to carry a portable printer with you (or can’t afford one), consider FedEx’s unfortunately-named Internet printing service File, Print FedEx Kinko’s. Yes, that’s the actual name. You need to install a program on your PC, basically a print driver, and from then on, you just print from any application and select the File, Print FedEx Kinko’s printer. A dialogue will pop up letting you select options like color or black-and-white and binding. You can pick up your print-outs at your closest FedEx office.
If you travel a lot, you might also look at PrintMe, a service that allows you to upload a document and print it to hotel business centers. They have quite a few places you can print to – there are 10 here in Las Vegas – and work worldwide. Many hotels will charge you to use their printers, however – and make sure to ok it with the hotel staff beforehand if you aren’t staying in the hotel!
What Else?
These are online applications and services that I find useful, but what about you? What online applications could you not live without? Or what do you wish you could do online but haven’t found the right app for yet? Share your favorites and your wishlists in the comments.
It seems that everybody wants a piece of the pumpkin sales pie this holiday season. And since eBay will be promoting itself through its “Come to think of it…eBay,” television commercials, print ads and online ads through Christmas in an attempt to “boost its standing as a holiday shopping destination,” we all can take advantage of the buzz. eBay has always had its share of critics. And while I certainly can’t exclude myself from that group of critics, I also know as an eBay Power Seller, that - for now, at least - it’s still the best place to auction one-of-a-kind items and used quality goods - and it is still a great place to retail merchandise.
One of the reasons eBay works so well is because of the giant and efficient marketing engine that if represents. The eBay machine is constantly channeling eager consumers - credit cards in hand and PayPal accounts overflowing - to your auctions and listings. But with the ever changing and increasingly rigid and difficult-to-attain standards that eBay sets for its sellers, the new seller and the casual seller can easily feel at a disadvantage. Here are a few tools to help you make the most of your eBay sales this Holiday Season:
Find out what are the most watched items for sale on eBay by using WatchedItem.com. This tool can help you search for the most watched items on eBay using the following criteria: eBay category, format, and end time. You can also search for watched items by user name or seller, which makes it a doubly helpful tool. Once you have searched by seller, you can then sort each seller’s items by watchers, bids/purchases, end time, or price including shipping – making it a very helpful tool to gauge the success of your own auctions as well as the auctions of your competitors.
Take advantage of eBay’s promotions. Auctions are great ways to promote your store and draw new customers to your items and eBay offers five free auction-style listings each month. You can take advantage of this promotion, regardless of start price of the item. I always plan to list my higher priced auction items to take best advantage of this promotion. Of course standard final value fees will apply on auctions that sell - Final Value Fee per listing of 8.75% or $20, whichever is lower.
Keep up to date on what’s hot on eBay on a daily basis by checking the eBay Pulse, a “daily snapshot of current trends, hot picks, and cool stuff on eBay.” From here you can check out the most popular searches, largest stores and most watched items.
If you are new to eBay or new to selling in a specific eBay category, you can get help by using eBay’s Reviews and Guides. It’s like an eBay 101 for new sellers and sellers who are new to a specific eBay category. Not only can you read reviews of the hottest selling items in that category, but you can access selling tips, selling guidelines and specific listing features by category. A search in Selling Video Systems, for example, yeilds the following results: Video Game Systems Selling Guide, Cashing In on Video Game Systems, Find Out What’s Hot in Video Game Systems, Get Top Dollar for Your Video Game Systems, Ship Your Video Game Systems and Building Your Reputation.
This year, shipping your online orders couldn’t be easier! Whether you print your shipping labels on PayPal directly through your eBay Selling Manager page, use Click ‘N Ship or Stamps.com, creating labels and paying for postage at home or at your office means you can avoid the insane lines at the Post Office this time of year.
What tools do you use to boost your eBay and other online sales?
The Global Entrepreneurship Monitor (GEM) just released their 2008 annual report on the state of entrepreneurship in the United States, with interesting results. Perhaps due to the economic crisis, the instance of entrepreneurship activity (high early-stage entrepreneurship prevalence rates, high venture capital investment and significantly higher levels of high-expectation entrepreneurship), is up across the board, with the ratio of early-stage activity to established business ownership adjusting from 9.6 in 2007 to 10.8 in 2008.
The GEM annual survey compares entrepreneurship activities from around the world, and found that – as usual – the United States is “at or near the top” when it comes to, at least, early stage entrepreneurial activities. According to the London-based study, 2008 marked a pivotal turning point in entrepreneurship because it was the first year that the world was fully involved in the current economic crisis. The GEM posited that this year’s survey results are merely a sign of things to come.
87% of Entrepreneurs Start a Business out of Opportunity
So what is the state of entrepreneurship today? Perhaps one of the most interesting stats from the GEM report concerns “unintentional entrepreneurs.” Though the report shows and uptick in entrepreneurship, people still say they started their businesses due to a business opportunity (87%) rather than just because they needed the money (13%). Still, entrepreneurs reported a decrease in perceived opportunity, and the fear of failure was up from 2007’s (record high) levels.
The report showed a couple of trends that would seem counterintuitive. Though entrepreneurship has long been thought to be the purview of young entrepreneurs, Baby Boomers and older (those in the 45 to 98 year old age group) were shown to be engaging in more entrepreneurial activity than Gen Xers or Millennials. The GEM pointed this out as an area of special interest, and we here at the Outright blog are going to keep an eye on it as well.
Another finding showed that U.S. entrepreneurs tend to start businesses in the business services sector. This compares unfavorably with the rest of the world, who’s entrepreneurs are starting more businesses in the innovation economy. This lack of primary industry could negatively effect the United State’s long term prospects, and bears closer examination.
Another downward trend is the hiring rate. Though American entrepreneurship is up overall, entrepreneurs plan to employ fewer people than in past years.
Female entrepreneurs were specifically studied. Though entrepreneurship by American women increased (and entrepreneurship by American men showed a corresponding decrease), the GEM study found that women start businesses with 8 times less funding than their male counterparts, and women start businesses out of necessity rather than opportunity more often than men. Interestingly, American women tend to start consumer-oriented businesses while American men tend to start business services-oriented businesses.
The study looked at the psychology of female entrepreneurs, as well. Female entrepreneurs reported a greater fear of business failure than their male entrepreneur counterparts. Further, while males see business success as a form of social status, female entrepreneurs are less likely to feel this way.
How does the GEM study apply to your business? Are you a Boomer who just started a business services firm? Or a woman who has built a successful business and still does not feel successful by societal standards? However you interpret the GEM study’s results, keep in mind that there are exceptions to every rule. If you’re a 21-year-old male in the technology sector, keep going for it!
For more on the results of this annual study, visit the GEM website.
Many of our most celebrated professionals welcome opportunities to work without immediate compensation. Restaurants donate food to various projects, attorneys take pro bono cases, and medical professionals volunteer their expensive skill sets to impoverished areas around the world.
What about you?
Do you do the Happy Dance when a friend of a friend sends you a casually written email requesting your “help” (read: professional experience for which you are usually paid) on a project?
What about when a client requests “a few tweaks” to a project for which you’ve already been paid without asking any questions related to compensation?
Is it ever okay to work for free? If lawyers, doctors, and nurses do it, might there be something to this gratis phenomenon?
Some of our 9-to-5 compadres have taken to the free work theory, in hopes of snagging a for-pay job when positions open up. What are your thoughts on that?Brilliance or buffoonery?
For us self-employed folks, I dare say there are definite pros to willingly working without the benefit of a cash-for-service exchange.
When it allows you to give back. We don’t have to be shy here, we’re all in similar boats, right? While the benevolent and karmic rationale for volunteering ones’s services are commendable, and—in many cases, genuine, there is a hard-to-ignore benefit to pro bono efforts, and that is the “See My Halo” factor. Donating 50 of your widgets to a charity, or 30 hours worth of your services to an up-and-coming business with an itty-bitty budget can pay off by way of positive publicity, and credibility amongst a new group of potential clients, which—if you’re savvy—can equal income down the road.
When “Free” is a small fish that baits a big fish. Just like many magazines offer free issues with a discounted paid subscription, “Free” can be an incredibly effective form of enticement. BNET.com offers some great insight on Chris Anderson’s (Wired magazine) theory on “embracing ‘free’ as a pricing concept”.
When it’s a steroid shot for your portfolio. Established writers, for example, often accept offers to guest write or blog in popular print and Web publications to broaden their audience-base and add valuable clips to their portfolios. Your arsenal needs to stay fresh and with the times, and your blog (if it’s to be a form of income) needs traffic. A great way to consistently wave your “I’m here” flag is to sprinkle a bit of your seasoning on a new scene by offering your product for review or your service at no cost.
See? I told you there are some pros. But, of course, working for free can also have its drawbacks. Besides the obvious drawback, what might some of the other less-than-gratifying results be? Seasoned freelancer and author Michelle Goodman speaks in depth about “PIE” (getting Paid In Exposure), and other cons HERE.
In 1909, income tax was again proposed, but Republicans in the Senate effectively killed the measure through a compromise that allowed a one percent tax on corporate income over $5,000 and sponsored a constitutional amendment that would allow income to be taxed by the federal government without regard to state apportionment or the census as required by the constitution. Senate Republicans were confident the individual states would never approve the amendment, but by 1912 the Democratic Party had won control of most state elections and both houses of Congress. On February 25, 1913, the required 36 states had approved the Sixteenth Amendment and on October 3, 1913 both houses of Congress passed the 1913 Tax Act.
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