End user pays, everyone else passes it on. Simple common sense shows that. Corporate taxation is simply a hidden tax on the end user. I don't know if you could come up with the information nowadays but back in the 60's I did a bit of research basically comparing all government spending that I could find figures for to the GNP, and figuring that that was actually pretty close to the real taxation factor. It came out to 63%.
graywolf http://www.graywolfphoto.com "Idiot Proof" <==> "Expert Proof" -----------------------------------
P. J. Alling wrote:
Actually microeconomics analysis shows that mathematically somewhere between 1/3 and 1/2 are directly passed on to the consumer. I've never seen the labor side, but I assume the theory is similar. In practice you are pretty much correct, when you trace all the paths the consumer ultimately pays for it all.
Tom C wrote:
I'm convinced of the view that businesses themselves never actually pay tax. It's people that pay tax. All taxes a business appears to pay are actually passed along to the employees in terms of reduced compensation and customers in terms of higher prices.
Of course I have no proof of this, I just heard it, and it kind of makes sense.
Tom C.
From: "John Forbes" <[EMAIL PROTECTED]> Reply-To: [email protected] To: [email protected] Subject: Re: OT: Digital camera sales in the USA Date: Thu, 12 May 2005 01:28:26 +0100
Sure, but these are still single entities for tax purposes, however much the managers may sub-divide them for administrative purposes.
And your loss-making restaurant will only "benefit" from it's losses (tax-wise) when it makes a profit. It would be far better off, however, making profits from the word go, even if those profits are taxed.
It is never (in normal circumstances) better to make a tax-offsettable loss than to make a profit. Sensible businessmen know that paying taxes means they are making money. People who spend their lives trying to avoid tax would be far better off expending their energies on making taxable profits.
Unless they are professional tax advisors of course. Like Arthur Andersen!
John
On Wed, 11 May 2005 21:51:04 +0100, Graywolf <[EMAIL PROTECTED]> wrote:
Well that is certainly true if you are talking about an independent operation. However in most corporations and multi-level taxation it is a case one division is making windfall profits and another losing money to offset the higher tax rate involved. They can not do that forever, but windfall profits are usually short term. GM can lose money running Pontiac for instance if Chevy, Buick, Cadillac, and Oldsmobile are doing fine. If their Military division has a very high profit 3 year contract right then it can even help offset the higher taxes upon the income from that contract.
Even if one of us openned a restaurant or something we would expect to lose money the first couple of years and that would offset some of the future taxes (income averaging). No you can not lose money indefinately but you can actually profit from temporary losses if you have other income to offset it.
graywolf http://www.graywolfphoto.com "Idiot Proof" <==> "Expert Proof" -----------------------------------
John Forbes wrote:
People talk about "tax breaks" and "tax write-offs" as though this is some sort of magical manna from heaven. Modern alchemy. But again it's rubbish. So-called tax breaks are no use at all if you don't have profits to offset them against.
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