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The core problem is that businesses have to pay taxes on net while you and I have to pay taxes on gross. We need to equalize this. Either both should pay taxe

The core problem is that businesses have to pay taxes on net while you and I have to pay taxes on gross. We need to equalize this. Either both should pay taxes on all money that goes through them (and have to change market prices accordingly) or people should only pay taxes on money they don't use in pursuit of living.

refurb 8y ago
You want a business who has revenue of $100M and expenses of $150M to pay taxes?
- tyingq 8y ago
  Maybe. What portion of the expenses went to executive salaries in exchange for this stellar outcome?
  - wahern 8y ago
    Does it matter? Those salaries are taxed. Indeed, all expenses are taxed because every dollar of expense represents a taxable gain at some point in the supply chain.
- PurpleBoxDragon 8y ago
  If I have expenses that cost me $150K this year but I only make $100K I often have to pay taxes. Some expenses are deductible in certain cases, but even then it isn't equivalent. All I'm saying is that both should be treated equally, which ever option that ends up being.
  - refurb 8y ago
    But they aren’t equivalent, that’s why they aren’t treated the same.
    - PurpleBoxDragon 8y ago
      You are right in that they aren't equal. The things I need to survive I'm taxed on the money I make to spend on them and then I'm taxed when I spend on it. The things a business needs to make more money, it isn't taxed on at all. If anything, the system is the opposite of what it should be. This is a way that the tax code insanely favors the wealthy, and it is so drilled into our subconscious that many see it idiotic to even question the way things currently work.
graeme 8y ago
This would be chaos in most industries, where margins are razor thin. And it would be a trade nightmare, as low margin industries would just move all production offshore. For the thin margins, imagine a company that makes 2%. But they pay 30% tax. Suddenly they’re at a loss on every sale due to tax. So thry raise price. Except every component in their chain alos does this. You’d probably also see a lot more vertical integration. No sale, no tax. Whereas separated companies have to pay tax every time thry deal withan outside company. But the world is not vertically integrated. So this tax plan wouldmforce america to drop best practices and go for extremely inefficient methods. Your plan for fairness would almost certainly destroy the economy.
- dsfyu404ed 8y ago
  Ok, so tax private individuals on net instead of gross then.
  - mywittyname 8y ago
    Most people spend most of what they earn. The middle ground we have now is personal exemptions and the standard deduction, which gives single individuals $16,000 in Federal tax-free income. Which is fair-ish. Certainly it's more fair now than when only upper-middle class people with mortgages and high property taxes were able to itemize.
  - graeme 8y ago
    You would either need to massively cut government services, or massively increase tax rates. Since only savings would be taxed, this would increase spending. In fact, you could even get the government to pay you money if you ran up extra expenses using debt and incurred a loss. There is a reason no country in the world does OP’s proposal, or yours. They would turn things topsy-turvy.
    - andrewflnr 8y ago
      > Since only savings would be taxed This seems wrong. I would think you would only be able to deduct basics like food and housing, maybe vehicles, with limits. Admittedly, that does get complicated really fast. In fact, as a pastor technically working as a contractor, my dad was able to deduct housing expenses for his whole family. It's not entirely unheard of. Also, I don't believe getting the government to pay you by deliberately incurring a loss works for business, so I don't see why it would for individuals.
_jal 8y ago
Leaving aside other complaints, on a nuts-and-bolts level, what is your tax law-definition of the 'pursuit of living'? Does this mean I'm only taxed on what I save? (time to pursue another solid gold toilet to... live on!) Or do the prince and the pauper alike get to deduct the same 'pursuit of living' credit and pay tax any remainder?
ip26 8y ago
In particular the one that aggravates me is childcare. A lawyer running their own practice can deduct their childcare as a cost of doing business. I, as a salary worker who also needs childcare as a cost of working, cannot. (Aside from the very limited DCFSA)
- graeme 8y ago
  Childcare isn't a deductible business expense in most jurisdictions, including the us. https://www.inc.com/manon-defelice/ceo-mom-expense-childcare.html https://www.inc.com/manon-defelice/ceo-mom-expense-childcare...
  - ip26 8y ago
    I probably got bad tax info then, not surprising. I guess that's at least equitably unfair, then.
maxerickson 8y ago
They aren't similar entities though. Individuals shouldn't be able to misrepresent personal expenses as business costs, but the amortization of a $500,000 crane also isn't all that similar to needing to eat.
- PurpleBoxDragon 8y ago
  The business doesn't have to have the crane, but a person dies without eating. If we only have to tax one, tax the crane.

refurb 8y ago

You want a business who has revenue of $100M and expenses of $150M to pay taxes?

tyingq 8y ago
Maybe. What portion of the expenses went to executive salaries in exchange for this stellar outcome?
- wahern 8y ago
  Does it matter? Those salaries are taxed. Indeed, all expenses are taxed because every dollar of expense represents a taxable gain at some point in the supply chain.
PurpleBoxDragon 8y ago
If I have expenses that cost me $150K this year but I only make $100K I often have to pay taxes. Some expenses are deductible in certain cases, but even then it isn't equivalent. All I'm saying is that both should be treated equally, which ever option that ends up being.
- refurb 8y ago
  But they aren’t equivalent, that’s why they aren’t treated the same.
  - PurpleBoxDragon 8y ago
    You are right in that they aren't equal. The things I need to survive I'm taxed on the money I make to spend on them and then I'm taxed when I spend on it. The things a business needs to make more money, it isn't taxed on at all. If anything, the system is the opposite of what it should be. This is a way that the tax code insanely favors the wealthy, and it is so drilled into our subconscious that many see it idiotic to even question the way things currently work.

graeme 8y ago

This would be chaos in most industries, where margins are razor thin. And it would be a trade nightmare, as low margin industries would just move all production offshore. For the thin margins, imagine a company that makes 2%. But they pay 30% tax. Suddenly they’re at a loss on every sale due to tax. So thry raise price. Except every component in their chain alos does this. You’d probably also see a lot more vertical integration. No sale, no tax. Whereas separated companies have to pay tax every time thry deal withan outside company. But the world is not vertically integrated. So this tax plan wouldmforce america to drop best practices and go for extremely inefficient methods. Your plan for fairness would almost certainly destroy the economy.

dsfyu404ed 8y ago
Ok, so tax private individuals on net instead of gross then.
- mywittyname 8y ago
  Most people spend most of what they earn. The middle ground we have now is personal exemptions and the standard deduction, which gives single individuals $16,000 in Federal tax-free income. Which is fair-ish. Certainly it's more fair now than when only upper-middle class people with mortgages and high property taxes were able to itemize.
- graeme 8y ago
  You would either need to massively cut government services, or massively increase tax rates. Since only savings would be taxed, this would increase spending. In fact, you could even get the government to pay you money if you ran up extra expenses using debt and incurred a loss. There is a reason no country in the world does OP’s proposal, or yours. They would turn things topsy-turvy.
  - andrewflnr 8y ago
    > Since only savings would be taxed This seems wrong. I would think you would only be able to deduct basics like food and housing, maybe vehicles, with limits. Admittedly, that does get complicated really fast. In fact, as a pastor technically working as a contractor, my dad was able to deduct housing expenses for his whole family. It's not entirely unheard of. Also, I don't believe getting the government to pay you by deliberately incurring a loss works for business, so I don't see why it would for individuals.

_jal 8y ago

Leaving aside other complaints, on a nuts-and-bolts level, what is your tax law-definition of the 'pursuit of living'? Does this mean I'm only taxed on what I save? (time to pursue another solid gold toilet to... live on!) Or do the prince and the pauper alike get to deduct the same 'pursuit of living' credit and pay tax any remainder?

ip26 8y ago

In particular the one that aggravates me is childcare. A lawyer running their own practice can deduct their childcare as a cost of doing business. I, as a salary worker who also needs childcare as a cost of working, cannot. (Aside from the very limited DCFSA)

graeme 8y ago
Childcare isn't a deductible business expense in most jurisdictions, including the us. https://www.inc.com/manon-defelice/ceo-mom-expense-childcare.html https://www.inc.com/manon-defelice/ceo-mom-expense-childcare...
- ip26 8y ago
  I probably got bad tax info then, not surprising. I guess that's at least equitably unfair, then.

maxerickson 8y ago

They aren't similar entities though. Individuals shouldn't be able to misrepresent personal expenses as business costs, but the amortization of a $500,000 crane also isn't all that similar to needing to eat.

PurpleBoxDragon 8y ago
The business doesn't have to have the crane, but a person dies without eating. If we only have to tax one, tax the crane.