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re: Why do businesses consider taxation an expense?
Posted on 4/13/15 at 8:14 pm to Vols&Shaft83
Posted on 4/13/15 at 8:14 pm to Vols&Shaft83
quote:Your scenario makes it a little longer for the money to come back, but it will eventually.
Is he ever going to answer my question or is that just an impossible dream?
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Posted on 4/13/15 at 8:43 pm to HailHailtoMichigan!
quote:
taxation neither harm nor hurts businesses because they get the money back through government workers buying stuff.
I expect that the 250 million or so Americans who have some form of ownership stake in a business would heartily disagree with the bolded part.
As for the unbolded part, it's been fairly well explained to you how that is far from true.
Posted on 4/13/15 at 8:46 pm to Evolved Simian
quote:No, it hasn't. social security payments and welfare payments perform the exact same function as government employee salaries.
As for the unbolded part, it's been fairly well explained to you how that is far from true.
This is almost as foundational as assets=liabilities +SE
Companies get the money back, sooner or later. Either from the government employees themselves, or indirectly through other people who got revenue from government workers buying their stuff.
This post was edited on 4/13/15 at 8:48 pm
Posted on 4/13/15 at 8:48 pm to HailHailtoMichigan!
quote:
Your scenario makes it a little longer for the money to come back, but it will eventually.
How do you know?
Posted on 4/13/15 at 8:50 pm to Vols&Shaft83
quote:Because it is a tautology. It literally has to flow back into the economy, no matter how indirectly.
How do you know?
Posted on 4/13/15 at 8:55 pm to HailHailtoMichigan!
quote:
Because it is a tautology. It literally has to flow back into the economy, no matter how indirectly.
It flows back to the economy, but not back to the now non-existent business, which was my original question.
Posted on 4/13/15 at 9:00 pm to Vols&Shaft83
quote:Then the money flows to businesses that exist.
It flows back to the economy, but not back to the now non-existent business, which was my original question.
Posted on 4/13/15 at 9:04 pm to HailHailtoMichigan!
Oh, so basically that business is just fricked by taxes only to get fricked again by the government shutting it down for no good reason, but that's OK because somebody benefited from that businesses diligence, just not the business itself.
Ok got it.
Ok got it.
Posted on 4/13/15 at 9:14 pm to Vols&Shaft83
Your hypothetical scenario disproves nothing. I never made the assertion that government regulation can't harm a firm. I said taxation cannot.
Posted on 4/13/15 at 9:17 pm to HailHailtoMichigan!
quote:
I never made the assertion that government regulation can't harm a firm. I said taxation cannot.
And I disagree. Taxation can and does harm businesses, every day.
It reduces the bottom line, that's harmful, now matter how many promises of unicorn farts for the business down the road.
Posted on 4/13/15 at 9:24 pm to Vols&Shaft83
quote:
It reduces the bottom line,
Posted on 4/13/15 at 11:36 pm to HailHailtoMichigan!
quote:
Your hypothetical scenario disproves nothing. I never made the assertion that government regulation can't harm a firm. I said taxation cannot.
The repetition of your assertion doesn't increase its validity. It's already been demonstrated to be incorrect in the theoretical. It's obviously incorrect in the practical.
Posted on 4/13/15 at 11:48 pm to the808bass
quote:Nobody has done that in this thread.
It's already been demonstrated to be incorrect in the theoretical. It's obviously incorrect in the practical.
It's a tautology. It has to happen. I'll ask again, where does the tax money eventually go except back to businesses in the form of revenue. It may not happen immediately, but it happens.
Posted on 4/13/15 at 11:53 pm to HailHailtoMichigan!
quote:
It's a tautology. It has to happen. I'll ask again, where does the tax money eventually go except back to businesses in the form of revenue. It may not happen immediately, but it happens.
Lost in the ether essentially. Harberger's triangle. If free market equilibrium is not achieved there is a dead weight loss. You're right, some revenue goes back in some form or another, but taxation inherently destroys capital by its very nature.
Posted on 4/13/15 at 11:59 pm to HailHailtoMichigan!
quote:
It's a tautology. It has to happen. I'll ask again, where does the tax money eventually go except back to businesses in the form of revenue. It may not happen immediately, but it happens.
Your question has been answered multiple times in this thread.
If a business owner stops by the side of the road and hands $50,000 to a panhandler, is that money "coming back to him"? Of course it isn't. Why is it any different with the government? Answer: it's not.
Posted on 4/14/15 at 7:36 am to the808bass
quote:
If a business owner stops by the side of the road and hands $50,000 to a panhandler, is that money "coming back to him"? Of course it isn't. Why is it any different with the government? Answer: it's not.
There are good arguments to be made that full employment has far reaching benefits and the very existence of macroeconomics can support this. The best answer is the one I gave. I don't know why he didn't respond to it.
Posted on 4/14/15 at 9:02 am to HailHailtoMichigan!
quote:
It's a tautology. It has to happen.
No it doesn't. And it doesn't in fact. Take a simple one: 24% of my tax money goes to Social Security. How is that money spent? Utility bills, WalMart, an occasional dinner out. The utilities spend most of that money on raw materials and blue collar wages. I'll never see any of that money. For WalMart, a huge chunk goes to China. I've been in business 14 years and have never had a purchase from China. Dinner on the town? Waiters and restaurateurs aren't my clients any more than electrical linemen are. Now tell me why I'm wrong.
Posted on 4/14/15 at 9:10 am to HailHailtoMichigan!
quote:
Why do businesses consider taxation an expense?
Because it...is...one?
No matter what one's philosophy is regarding taxation, it is still an expense. Even if one looks at as a fee for service performed, it is still an expense, just like wages are an expense, purchasing supplies and raw materials are an expense, and paying for employees' health insurance is an expense.
For example, if a business pays 20% taxes on all its revenues and spends 70% of its revenues on operating expenses (rent, wages, healthcare, insurance, materials, maintenance, ect), then it would have about a 10% profit margin. If taxes are then raised from 20% to 30% of revenue, suddenly, that 10% profit margin disappears. That means the business must adapt to make up that margin elsewhere or go bankrupt. That could mean employing fewer people, using lower price and lower quality materials, cutting back on insurance benefits for employees, ect. Taxation is always an expense.
This post was edited on 4/14/15 at 9:14 am
Posted on 4/14/15 at 3:49 pm to HailHailtoMichigan!
They do it because it is an expense.
Posted on 4/14/15 at 3:50 pm to Tds & Beer
correct
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