The United States has the largest, most technologically-advanced, and most diverse economy in the world. While the United States accounts for only about 4 percent of the world's population, its GDP is 26 percent of the world's total economic output. The American economy is a free-market, private enterprise system that has only limited government intervention in areas such as health care, transportation, and retirement. American companies are among the most productive and competitive in the world. In 1998, 9 of the 10 most profitable companies in the world were American (even the non-U.S. exception, Germany's Daimler-Chrysler, has a substantial part of its operations in the United States).
n the 1990s, the American economy experienced the second-longest period of growth in the nation's history. The economy grew at an average rate of 3-4 percent per year and unemployment fell below 5 percent. In addition, there were dramatic gains in the stock market and many of the nation's largest companies had record profits. Finally, a record number of Americans owned their own homes.
Although there is great diversity in the American economy, services dominate economic activity. Together, services account for approximately 80 percent of the country's GDP. Manufacturing accounts for only 18 percent, while agriculture accounts for 2 percent. Financial services, health care, and information technology are among the fastest growing areas of the service sector. Although industry has declined steeply from its height in the 1950s, the American manufacturing sector remains strong. Two of the largest American corporations, General Electric and General Motors, have manufacturing and production as their base, although they have both diversified into the service sector as well. Meanwhile, despite continuing declines, agriculture remains strong in the United States. One of the main trends in the agricultural sector has been the erosion of the family farm and its replacement by the large corporate farm. This has made the sector more productive, although there has also been a decrease in the number of farmers and farm workers.
There are a number of structures that you can choose from when starting or expanding your business in America. The four main business structures commonly used by small businesses are:Sole Trader:
An individual operating as the sole person legally responsible for all aspects of the business. Like other structures, as a sole trader you can employ people to help you run your business.Company:
A company is a legal entity separate from its shareholders.Partnership:
An association of people or entities running a business together, but not as a company.Trust:
An entity that holds property or income for the benefit of others.How to Chose a Business Structure?
When deciding on a structure for your business, choose the one that best suits your business needs, keeping in mind that there are advantages and disadvantages for each structure. It is important to note that you can change your business structure throughout the life of your business. As your business grows and expands, you may decide to change your business structure, or to restructure your business.
Following are some important factors to chose a business structure:
The United States of America is a federal republic with separate state and local governments. Taxes are imposed in the United States at each of these levels. These include taxes on income, payroll, property, sales, capital gains, dividends, imports, estates and gifts, as well as various fees. In 2010 taxes collected by federal, state and municipal governments amounted to 24.8% of GDP. In the OECD, only Chile and Mexico taxed less as a share of GDP. However, taxes fall much more heavily on labor income than on capital income, and investments in higher education are taxed particularly heavily.
Taxes are imposed on net income of individuals and corporations by the federal, most state, and some local governments. Citizens and residents are taxed on worldwide income and allowed a credit for foreign taxes. Income subject to tax is determined under tax accounting rules, not financial accounting principles, and includes almost all income from whatever source. Most business expenses reduce taxable income, though limits apply to a few expenses. Individuals are permitted to reduce taxable income by personal allowances and certain nonbusiness expenses, including home mortgage interest, state and local taxes, charitable contributions, and medical and certain other expenses incurred above certain percentages of income. State rules for determining taxable income often differ from federal rules. Federal tax rates vary from 10% to 39.6% of taxable income. State and local tax rates vary widely by jurisdiction, from 0% to 13.30% of income,and many are graduated. State taxes are generally treated as a deductible expense for federal tax computation. In 2013, the top marginal income tax rate for a high-income California resident would be 52.9%.
Payroll taxes are imposed by the federal and all state governments. These include Social Security and Medicare taxes imposed on both employers and employees, at a combined rate of 15.3% (13.3% for 2011 and 2012). Social Security tax applies only to the first $106,800 of wages in 2009 through 2011. However, benefits are only accrued on the first $106,800 of wages. Employers must withhold income taxes on wages. An unemployment tax and certain other levies apply to employers. Payroll taxes have dramatically increased as a share of federal revenue since the 1950s, while corporate income taxes have fallen as a share of revenue. (Corporate profits have not fallen as a share of GDP).
Property taxes are imposed by most local governments and many special purpose authorities based on the fair market value of property. School and other authorities are often separately governed, and impose separate taxes. Property tax is generally imposed only on realty, though some jurisdictions tax some forms of business property. Property tax rules and rates vary widely with annual median rates ranging from 0.2% to 1.9% of a property's value depending on the state.
Sales taxes are imposed by most states and some localities on the price at retail sale of many goods and some services. Sales tax rates vary widely among jurisdictions, from 0% to 16%, and may vary within a jurisdiction based on the particular goods or services taxed. Sales tax is collected by the seller at the time of sale, or remitted as use tax by buyers of taxable items who did not pay sales tax.
You need to organize your business as a legal entity. There are numerous options to account for, and all have various legal, financial and tax considerations. The right legal configuration for your business depends on a number of things. These include the level of control you want to have, your business’ vulnerability to lawsuits and financing needs. The legal structure chosen by you will determine additional registration requirements. You may have to file registration forms with your state and/or local government, after you have chosen a legal structure. The various considerations which need to be taken into account change from state to state. Some firms / businesses need to be registered with your state government:
The legal name of a firm / business by default is the name of the person or organization that owns a business. The legal name will be your full name, if you are the exclusive proprietor of your firm / business. However, if your business is a partnership, the legal name is the name outlined in your partnership agreement / the last names of the partners. The business’ legal name is the one that was registered with the state government, for limited liability corporations (LLCs) and corporations.
Employers with employees, business partnerships and corporations, and other categories of organizations, are required to acquire an Employer Identification Number (EIN) from the U.S. Internal Revenue Service. This number is also known as an Employer Tax ID and Form SS-4.An Employer Identification Number (EIN) / Federal Tax Identification Number is needed to distinguish a business entity. Companies / businesses normally need an EIN. There are a number of ways in which you can put through an application for an EIN, including applying online.
If you decide to sell products and you need to compile sales taxes, you will probably be required to acquire a Sales Tax Permit or Vendor’s License. This can be obtained from your state or local government (or both). As well as business taxes which are needed by the federal government, you will need to pay some state and local taxes, with every state and locality having its own tax laws. The following links allow access to essential resources. These resources will help you learn about your state tax requirements. By acquiring knowledge of your state tax requirement, this can help you avoid problems and also help your business save money.
The majority of businesses need to acquire some category of business license or permit to formally operate. Most small businesses are required to acquire a general business license / industry-specific operating permits from state and local government agencies. You may be required to be licensed at the federal, state and/or local level, depending on your business. As well as a basic operating license, you might need specific permits, including an environmental permit.
Australia was ranked 19th for both imports and exports in the world in 2010. As a member of numerous organisations such as APEC, the G20, WTO and OECD, Australia has multiple free trade agreements with numerous countries such as the US, Singapore, Chile and Thailand. The vast scale of trade with China has also seen massive investments by Chinese companies in Australia. The majority of these investments has been in the resources sector, where Chinese companies have not only invested in Australian mining companies, but have now also started to lease land from the Australian government to mine resources on their own.
Australia imports mainly machinery and transport equipment (40 percent of total imports), of which road vehicles account for 12 percent, industrial machinery for 6 percent, electrical machinery for 5 percent and telecommunications and sound recording for 5 percent.The country also imports: petroleum (11 percent); manufactured goods (12 percent); chemicals and related products (10 percent); and food and live animals (5 percent). Main import partners are China (23 percent of total imports), the US (11 percent), Japan (7 percent), South Korea, Thailand and Germany (5 percent each) and Malaysia (4 percent). This page provides the latest reported value for - Australia Imports - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.
Rich in natural resources, Australia is a major exporter of commodities. Metalliferous ores and metal scrap account for 29 percent of total exports and mineral fuels, lubricants and related materials account for 25 percent, of which coal, coke and briquettes account for 15 percent and gas accounts for 7 percent. The country also exports: food and live animals (14 percent), mainly meat (5 percent) and cereals (4 percent); manufactured goods (6 percent), mainly non-ferrous metals (4 percent); and machinery and transport equipment (6 percent). Australia's largest export markets are China (32 percent of total exports), Japan (16 percent), South Korea (7 percent), the US (5 percent), India (4 percent), New Zealand, Singapore and Taiwan (3 percent each). This page provides the latest reported value for - Australia Exports - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.
Resources continue to underpin Australia’s exports to China. Australia exported 266.2 million tonnes of iron ore to China in 2009, an increase of 45.2 per cent over the same period. China is also Australia’s largest source of imports. Major imports from China include clothing, communications equipment, computers, prams, toys, games and sporting goods, furniture and televisions.
Australia's per-capita GDP is higher than that of the UK, Germany, or France, in terms of purchasing power parity (PPP). The country ranked second in the 2011 United Nations Human Development Index and sixth in The Economist's 2005 worldwide quality-of-life index. With a sovereign credit rating of "AAA," Australia's credit rating is actually higher than that of the United States.
In 2011, Credit Suisse reported that Australia had the highest median wealth in the world, with an average $222,000 US. That number was nearly four times higher than the average for American adults and made Australia second only to Switzerland in average wealth.
Australia's economy relies heavily on the export of commodities rather than manufacturing. Major Australian exports include wheat and wool, minerals such as iron ore and gold, and energy in the forms of liquefied natural gas and coal. Australia's largest export markets include Japan, China, South Korea, India, and the United States.
However, the service sector of the economy constitutes 69 percent of Australia's GDP. Property and business services have been the largest growth industries in the service sector. Unfortunately, this growth appears to have been at the expense of the manufacturing sector, which has contributed proportionately less to the economy since the late 1990s.
There has probably never been a better time to build a startup in Australia. We have a growing pipeline of entrepreneurs and accelerators, new startup funds announced almost every week, and enthusiastic support from all levels of government to build the ecosystem.
Australia is at a critical juncture - political and business leaders agree that innovation is the key to our continued prosperity. To ensure we don’t get left behind, we must act decisively. The government’s national innovation agenda will provide an opportunity to set clear-eyed, ambitious goals for the short, medium, and long term. With a well-defined vision and a series of targeted policies for realising that vision, this agenda could provide a blueprint for Australia’s economic future.