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Flip the situation: a) I can be frugal and pay corporate tax; or b) I can be frugal and pay no corporate tax. He picked option b.. which is fine. You don't sta

Flip the situation: a) I can be frugal and pay corporate tax; or b) I can be frugal and pay no corporate tax. He picked option b.. which is fine. You don't start a business from the notion of funding the state.

mulmen 9y ago
But you said there's no point in being frugal if you are paying significant corporate tax. If you have a heavy tax burden surely it is important to allocate your remaining resources frugally? I'm saying option a is better than option c) spend wastefully because you pay high taxes. Your comment seemed to advocate for this third option. I now understand your meaning to be "paying high taxes is not frugal" which I disagree with for other reasons. Specifically paying unnecessary taxes would not be frugal but a company can still be frugal and pay high tax rates. To put it another way I do not believe tax avoidance is a frugal necessity.
- charlesdm 9y ago
  Perhaps I phrased it wrong -- I believe, if you are a person who is extremely frugal, you will also automatically want to reduce your tax liability. Because at the end of the day the result is the same: an expense means money leaves the business, taxes mean that money leaves the business. It's not necessary.. but probably a personally trait of frugal people. You reduce expenses. You're absolutely right however that high taxes tend to incentivise reinvestment (so you can tax deduct). But too high taxes also deter entrepreneurship to some extent, because past a certain point a lot of people will feel they're working more for the state than for themselves.
  - mulmen 9y ago
    Sure but you can reduce your tax liability to the maximum extent of the law and still pay high tax rates. This is still frugal. I don't disagree with your second paragraph but I don't see how it relates to frugality.
    - charlesdm 9y ago
      Yes, of course. But only if the law says you have to; that's what legal avoidance is all about. If you legally find a way to reduce your liability to zero (i.e. like Kamprad did), then you're also being frugal? This obviously might not be entirely ethical, but it's extremely frugal. :)

mulmen 9y ago

But you said there's no point in being frugal if you are paying significant corporate tax. If you have a heavy tax burden surely it is important to allocate your remaining resources frugally? I'm saying option a is better than option c) spend wastefully because you pay high taxes. Your comment seemed to advocate for this third option. I now understand your meaning to be "paying high taxes is not frugal" which I disagree with for other reasons. Specifically paying unnecessary taxes would not be frugal but a company can still be frugal and pay high tax rates. To put it another way I do not believe tax avoidance is a frugal necessity.

charlesdm 9y ago
Perhaps I phrased it wrong -- I believe, if you are a person who is extremely frugal, you will also automatically want to reduce your tax liability. Because at the end of the day the result is the same: an expense means money leaves the business, taxes mean that money leaves the business. It's not necessary.. but probably a personally trait of frugal people. You reduce expenses. You're absolutely right however that high taxes tend to incentivise reinvestment (so you can tax deduct). But too high taxes also deter entrepreneurship to some extent, because past a certain point a lot of people will feel they're working more for the state than for themselves.
- mulmen 9y ago
  Sure but you can reduce your tax liability to the maximum extent of the law and still pay high tax rates. This is still frugal. I don't disagree with your second paragraph but I don't see how it relates to frugality.
  - charlesdm 9y ago
    Yes, of course. But only if the law says you have to; that's what legal avoidance is all about. If you legally find a way to reduce your liability to zero (i.e. like Kamprad did), then you're also being frugal? This obviously might not be entirely ethical, but it's extremely frugal. :)