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If corporates have freedoms like individuals, they must also be taxed like individuals on the total revenues. I don't get to deduct my day to day expenses befor

If corporates have freedoms like individuals, they must also be taxed like individuals on the total revenues. I don't get to deduct my day to day expenses before paying income tax, why should a corporation be able to deduct it's expenses for tax.

cjalmeida 5y ago
Because it’s bad overall. It pushes for large monolithic corporations instead of specialized companies. Also, you do get to deduct expense when doing value adding business activities. Just incorporate. Likewise corporations can’t deduct (loopholes aside) “leisure activities”
- wanderingmind 5y ago
  Then only tax individual income tax on savings as well because it's bad to see people struggle to make ends meet and the government on top making it more difficult by taxing on entire income
throwaway34241 5y ago
The practical reason is that this would penalize smaller companies working together over large, vertically integrated ones. If company A sells an item for $10 and buys $8 in parts from company B, who buys $6 in parts from company C, the total taxed amount will be $10+8+6 = $24, while a totally vertically integrated company would only pay tax on $10. You can get around that by only taxing the value added ($10-$8 etc) which is a VAT tax and a popular way for countries to raise revenue. The bigger issue is companies transact with consumers, workers, and shareholders. But when you have a tax, what matters is really what transaction you tax and not which side of the transaction pays the tax. For example, payroll and income taxes both reduce wages. If you tax revenue, that's basically taxing the transaction from consumer->company, so that tax (VATs, sales taxes, etc) falls on the consumers.
- wanderingmind 5y ago
  They can have different tax rates based on total revenues like how individuals with lower wages are taxed at lower rate. It's immortal when a corporation can deduct a party expense but a single mom earning minimum wages cannot deduct the expense of buying groceries or even a single restaurant meal.

cjalmeida 5y ago

Because it’s bad overall. It pushes for large monolithic corporations instead of specialized companies. Also, you do get to deduct expense when doing value adding business activities. Just incorporate. Likewise corporations can’t deduct (loopholes aside) “leisure activities”

wanderingmind 5y ago
Then only tax individual income tax on savings as well because it's bad to see people struggle to make ends meet and the government on top making it more difficult by taxing on entire income

throwaway34241 5y ago

The practical reason is that this would penalize smaller companies working together over large, vertically integrated ones. If company A sells an item for $10 and buys $8 in parts from company B, who buys $6 in parts from company C, the total taxed amount will be $10+8+6 = $24, while a totally vertically integrated company would only pay tax on $10. You can get around that by only taxing the value added ($10-$8 etc) which is a VAT tax and a popular way for countries to raise revenue. The bigger issue is companies transact with consumers, workers, and shareholders. But when you have a tax, what matters is really what transaction you tax and not which side of the transaction pays the tax. For example, payroll and income taxes both reduce wages. If you tax revenue, that's basically taxing the transaction from consumer->company, so that tax (VATs, sales taxes, etc) falls on the consumers.

wanderingmind 5y ago
They can have different tax rates based on total revenues like how individuals with lower wages are taxed at lower rate. It's immortal when a corporation can deduct a party expense but a single mom earning minimum wages cannot deduct the expense of buying groceries or even a single restaurant meal.