I've answered it a couple times, but you don't like admitting defeat, so you keep asking, hoping for a different result. With the current tax code, a business that is paying its tax obligations just to exist (property tax, SS, medicare, etc, etc), but just breaking even isn't a negative on the economy. It is actually the opposite. By breaking even, after cuttings costs, they are still providing jobs and healthcare to their employees. Start taxing them on revenue, and they become a business that is losing money, quite possible a lot of money if they are in a low-margin sector, and all those jobs are gone. Now when the economy turns around, and that company could have been prosperous, growing and adding jobs, they don't exist because the barrier to entry can be quite high. Additionally, taxing revenue can have the effect of double taxing. In most states, there is a sales tax. If you tax revenue, the business gets taxed when they buy supplies and equipment necessary to have a business, and they don't get to deduct those costs later like they would if they were taxed on profit.
Thanks for the answer. I completely agree that suddenly switching the tax code from profits to revenue would be a disaster. And I agree that some companies would fail, even if it was done gradually. And yes, companies that are unprofitable do pay some taxes, just like individuals who don't pay income tax still pay some taxes. However, it seems like your philosophy on corporate taxes is a bit at odds with your philosophy on individual taxes (unless I am confusing you with someone else, which is possible). In the corporate world, you are happy to exclude the low earners from income tax and charge all the income tax to the high earners. For individuals, though, you say that raising income taxes on high earners is bad, because they supposedly invest that money to create jobs. It seems to me that one could make that same argument about corporations. barfo
The bolded part seems like a leap. I don't think I'm being inconsistent. I think if a person or a company makes money, they should pay taxes. An individual that doesn't make any money doesn't pay any income tax. A business that doesn't make any profit shouldn't pay tax on revenue, as they are supplying jobs and healthcare. For individuals it is even more extreme, in that many people making money don't pay any tax. (I know you'll mention payroll tax, but that is different because they will get a proportional amount of that back). I think high earning individuals should pay high amounts of taxes. But I don't think they should be paying a much, much higher percentage rate, while others pay nothing. I think a flat tax could work, or slightly progressive. What I don't think will be sustainable is some people paying over half of their income in taxes while others pay very little. Everybody needs to feel some consequence when they vote for more government spending and handouts, otherwise the spending will continue to go out of control.
I think we as a country are quite inconsistent about this. For one thing, the individual income tax is in fact a tax on revenue, not profits. sales tax, property tax, gas tax, etc. Isn't that exactly the situation you favor for businesses though? Some of them pay lots of income taxes, while a great many others don't pay any income tax. barfo
Are you talking about not paying income tax while still making money, or not paying income tax because of loopholes and headquarters in other countries, etc, etc?
Income tax is a tax on profits. The whole 1040 form is like a P&L statement, and you pay taxes on your TAXABLE amount, not your income. All those deductions you take, like the home office one for your daughter's bedroom, are expenses on the 1040 P&L.
Not really. It's sort of like that, but businesses can claim essentially all of their expenses as expenses, whereas individuals can only claim a very limited set of things which excludes much of what people actually need to spend money on (rent, clothing, food...). barfo
You say it's bad for some individuals (1) to pay a high rate of tax, and others (2) to not have to pay any tax. Yet for corporations, you say it's fine for some companies (3) to pay a high rate of tax, and others (4) to not have to pay any tax. 1: wealthy 2: poor 3: profitable 4: unprofitable barfo
Silly Barfo. There are so many strawmen in your post is it ridiculous. 1) I said I would prefer if tax RATES were similar across the board... for both individuals and corporations. If you don't make any money, don't pay any income / profit tax. Whether you're a person or business. 2) Please show where I said that some corporations should (4) not have to pay any tax. Or, your other option is to GTFO. I accept your apology and your surrender. Now go throw away all those kleenex you used as people actually responded to your stupid posts. kthnx.
My, a little hostile this afternoon, are we? 1) Yeah, so? That doesn't contradict anything I wrote. 2) Sorry, I meant "income tax" not "tax". Since income tax is what we've been discussing all along, I figured you could infer that. Guess I was wrong. Your stance on income taxes seems highly inconsistent to me. Not that it has to be consistent, or that inconsistency is necessarily bad. Just an observation. barfo
I've been talking about the other taxes that businesses are required to pay. YOU'RE off on some tangent. You're in your own little world, my friend. That's because you're too busy making up random strawmen.
Yes, and I acknowledged your point about that in post #63. Isn't everyone? You can call it a tangent if you like. Income tax is what I wanted to talk about, and what I have been talking about. If you don't want to talk about that, suit yourself. A strawman (you really like that word, don't you?) would require an argument - I'm not really making one. I'm just exploring what appears to be your position. I'm not arguing against it (or against any strawmen, if you prefer). barfo
You hate America? It's not a strawman, I'm just exploring your position. (Actually, that sounds kind of gross. So I take it back. Hope I didn't get you excited.)
