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"Simple: don’t show any profits" is a concept that's been used forever to avoid paying taxes from the local handyman all the way to Amazon. It isn't evil, but
by EADGBE 9y ago
"Simple: don’t show any profits" is a concept that's been used forever to avoid paying taxes from the local handyman all the way to Amazon.
It isn't evil, but just try and convince some people that.
Especially that handyman, who's trying to avoid those estimated payments in a slow business part of the year.
- supergeek133 9y agoExactly, anyone that wants proof of this just needs to do business with a tradeperson outside of the big cities. Family has had a cabin home about an hour outside of Minneapolis, whenever I need something (plumbing, woodwork, etc) I always ask for the cash price. You can get huge discounts because the business simply doesn't have to report it (they DO but no way to track it). I personally don't think it should be frowned upon.
- lawnchair_larry 9y agoYou don't think felony tax evasion should be frowned upon? That goes far beyond tax avoidance.
- candiodari 9y agoIf you think this behavior is bad in the US, come have a look in Europe. You'll be amazed. And I'm from Northwest Europe, I 'm told I would not believe what common practice is in Greece.
- deleted 9y ago[deleted]
- supergeek133 9y agoDo you think it's OK for Amazon and other companies to do this in a more "corporate" sense? Why is it OK for the big guy but not the little guy just because they have good legal/financial resources? For some small businesses in this country, it's the only way to stay competitive to big enterprise. See: Little pizza shop versus large franchise. I'm talking about the spirit of the whole thing, not the law. To be completely honest, most business will tell you this revolves around the criminal amount the card processors take from them in processing fees.
- tome 9y agoWhat Amazon does is completely different!
- supergeek133 9y agoThe laws by which they retain their cash are different yes, but is the result? Not to mention the order of magnitude is larger.
- tome 9y agoYes, because the money is going directly back into things that benefit the company and returns cashflow which will (presumably) be taxed at a later date.
- semafour 9y agoCredit card rates with your own merchant account are 3% - 8%, depending on your industry and chargeback history. Federal Marginal tax rates are 10% - 38%, plus maybe 5% in MN. If they are giving you a 5% - 10% discount for cash, sure, it's probably because they appreciate skipping the credit card. If they give you a larger discount for paying in cash, they probably aren't reporting the income.
- EADGBE 9y agoCC rates can be negotiated down below 3%.
- supergeek133 9y agoDepends on the business.
- semafour 9y agoFor card-present goods and services it's likely lower, but for card-not-present online software sales from a small company, rates with your own merchant account can be even higher than 8%. This is a big advantage of using Stripe and the like.
- tclancy 9y agoIf you ignore scale, sure. A handyman pocketing $100 in cash here and there is a good deal different from a company whose whims could affect the trajectory of the economy.
- EADGBE 9y agoI wasn't insinuating pocketing cash. I was insinuating tax avoidance methods. Which are completely legal and how every small business stays afloat. (Write offs, SEP IRA, Depreciation, company car, office space, etc.)
- conanbatt 9y agoIt's not the act that is evil, is the person doing it, am i rite. We must take the veil off Lady Justice. Please. Corporate taxes make no sense as they are, companies don't pay taxes, people pay taxes. And corporate taxes more often than not fall on the consumer.