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Citation needed for sure, but being a big % of expenses doesn't mean anything either way - salaries could be 100% of your expenses, and tax rates could be 90%,
by corin_ 12y ago
Citation needed for sure, but being a big % of expenses doesn't mean anything either way - salaries could be 100% of your expenses, and tax rates could be 90%, but if the company has revenue of 100x and expenditure of 10x then 90% of that 100% is still only 9x, which is the equivilent to a 10% tax on their 90x company profits. (Equally, salaries could be a small percentage of expenditure, but if the company makes only a small amount of net profit then tax on salaries could easily dwarf tax on the company's profits.)
- twic 12y ago90% would be an extraordinary profit margin. Virtually no business operates with a 90% profit margin. Startups certainly don't.
- corin_ 12y agoIgnore my numbers, my point was just that without knowing total amount spent on salaries, total net profit, and the tax rates on both, there's no way to state which is going to provide more taxes, and that therefore there's no point talking numbers on one side without the other side to match. (But yes, your point is accurate.)
- twic 12y agoAnd my point is that for any plausible set of numbers, you can state which will provide more taxes.