3 ms·
I would be curious to hear of an economy where business expenses were not deductible. Such an economy would either need a super low tax rate or I imagine would
by Danieru 6y ago
I would be curious to hear of an economy where business expenses were not deductible.
Such an economy would either need a super low tax rate or I imagine would have strangled everything but the highest margin businesses.
I would hazard to assume such an economy does not exist but I've been wrong before.
In a similar vein Japan still has a tax on capital goods depreciation. One would expect the government to encourage capital investments. Canada and US removed this tax over a decade ago, yet it continues in Japan. Perhaps tax policy like this is in part responsible for Japan's sluggish corporate investment.
- Enginerrrd 6y ago>I would be curious to hear of an economy where business expenses were not deductible. ...This can get really non-trivial pretty quickly. Even in the US, the tax code doesn't let you deduct any expense. I would imagine that certain industries could get pretty tricky pretty quickly, and would affect the workable margin in some businesses more than others.
- Danieru 6y agoI agree, I cannot imagine a functional economy without such a tax policy. Yet instead of assuming none exist I asked.
- fomine3 6y agoGoods Depreciation is required for over 100,000 JPY so we tend to buy cheap suck Dell Vostro. It's bad for productivity.
- redis_mlc 6y agoIn Asia, often a tax audit will demand a percentage of total revenue, like 10%. If you respond with, "but I had expenses," you're just told, "so charge more next year then, or shut down."
- tonyedgecombe 6y agoIn the UK we have legislation (IR35) that tries to force contractors and small businesses into being deemed employees with limited ability to offset taxes. To be fair to the government there were a lot of people operating through limited companies just to avoid taxes.