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Taxes on profits don't hurt companies that actually reinvest. The problem here is companies that act like they reinvest the money and have no profit, while they
by legulere 10y ago
Taxes on profits don't hurt companies that actually reinvest. The problem here is companies that act like they reinvest the money and have no profit, while they actually have tons of profits.
- muninn_ 10y agoWhat is your definition of hurt? Taxing the profit sure seems to me like it "hurts" the company as they have less resources.
- notahacker 10y agoCompanies that reinvest most of their revenue make small profits. Companies that don't make larger profits, and thus pay more corporation tax where corporate taxes exists. (By extension, those wanting to abolish corporation tax should come up with an argument why companies that reinvest profits to research or expand should pay more tax - on the goods and services they buy to improve - than companies that do nothing with their large piles of cash except hope it's enough of a war chest to deter others from investing in competing with it)
- nickff 10y agoIt depends what you reinvest in; I know that the (hardware) business which I work for gets taxed on the revenue it spends on capital goods (machinery and tooling) as if it were profit (then we sometimes get to write off some taxes in the future). One of the reasons 'hardware is hard' is because the government makes it hard.
- bcheung 10y agoAn expense must be ordinary and necessary and you have to be able to make the argument that the expense had a reasonable intent to make profit down the road.