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I don’t think profit margin is the correct way to calculate their expenses. For one, it includes expenses outside of the municipality. For another, corporatio

I don’t think profit margin is the correct way to calculate their expenses. For one, it includes expenses outside of the municipality. For another, corporations are often okay overspending on executive compensation and other lavish business expenses for tax purposes.

EduardoBautista 2y ago
Governments are often okay overspending on government contracts.
- greesil 2y ago
  What about
Aurornis 2y ago
> For one, it includes expenses outside of the municipality. Exactly. The cherry picked example in the article was chosen to ignore areas with higher expenses. > For another, corporations are often okay overspending on executive compensation PG&E had $25 billion revenue last year. How much do you think they spent on lavish executive compensation? Even if you could eliminate $100 million in compensation (doubtful) that’s still less than 0.1% of revenues. People overestimate the impact of executive compensation in large companies by orders of magnitude. > and other lavish business expenses for tax purposes. Again, you’re not going to find dramatic savings anywhere in the budget by cutting lavish business expenses at this scale. It’s noise. There’s also a persistent myth that companies can spend their way into saving money via tax write-offs, but for some reason my accountant tells me that’s not how taxes work.
gamblor956 2y ago
162(m) limits a company's deduction for executives (and other highly compensated employees) compensation to $1m per exec/employee. Or in other words, companies aren't overspending on exec compensation for tax purposes. They're doing so because the board is not exercising proper financial control over the company.
apercu 2y ago
Right? I once ran a private company where there primary shareholders (who didn't work inside the organization) used to complain about the margins because they liked to calculate profit margin _after_ taking significant dividends.
- lotsofpulp 2y ago
  Your instance of an employer screwing you has no relation to an audited publicly listed business that has to not only follow accounting standards and is subject to the SEC, but also cannot sell their product unless the price is approved by the state.
  - apercu 2y ago
    Fair. But if you assume creative accounting only applies to private organizations I have a bridge to sell you.

EduardoBautista 2y ago

Governments are often okay overspending on government contracts.

greesil 2y ago
What about

Aurornis 2y ago

> For one, it includes expenses outside of the municipality. Exactly. The cherry picked example in the article was chosen to ignore areas with higher expenses. > For another, corporations are often okay overspending on executive compensation PG&E had $25 billion revenue last year. How much do you think they spent on lavish executive compensation? Even if you could eliminate $100 million in compensation (doubtful) that’s still less than 0.1% of revenues. People overestimate the impact of executive compensation in large companies by orders of magnitude. > and other lavish business expenses for tax purposes. Again, you’re not going to find dramatic savings anywhere in the budget by cutting lavish business expenses at this scale. It’s noise. There’s also a persistent myth that companies can spend their way into saving money via tax write-offs, but for some reason my accountant tells me that’s not how taxes work.

gamblor956 2y ago

162(m) limits a company's deduction for executives (and other highly compensated employees) compensation to $1m per exec/employee. Or in other words, companies aren't overspending on exec compensation for tax purposes. They're doing so because the board is not exercising proper financial control over the company.

apercu 2y ago

Right? I once ran a private company where there primary shareholders (who didn't work inside the organization) used to complain about the margins because they liked to calculate profit margin _after_ taking significant dividends.

lotsofpulp 2y ago
Your instance of an employer screwing you has no relation to an audited publicly listed business that has to not only follow accounting standards and is subject to the SEC, but also cannot sell their product unless the price is approved by the state.
- apercu 2y ago
  Fair. But if you assume creative accounting only applies to private organizations I have a bridge to sell you.