I'm tired of the "Corporations need to pay their fair share" BS mantra

But the statement of dividends does not include that information just like it does not include all the other expenses.

 

No you can't.

Property tax is not a tax on income or profits. Duh.

Good.

 

No they don't.
They are applied to pre-tax income. (That is, to profit before tax).

 

Funny in what way? He said taxes reduce post tax income. They reduce pre-tax income.

 

If taxes reduce pre-tax income, when are the taxes paid?

 

Expenses are shown on the Profit & Loss Statement - part of the package of financials they're obliged to produce.

 

I'd like to see that get by the IRS...

 

No taxes are an expense just like payroll or rent. They reduce gross income to arrive at a net profit. Taxes are paid on net profit. Taxes are not taxed. I'm amazed at the low level of knowledge about business. Nothing wrong with not knowing something but this group is bend on spreading misinformation and then defending it agressively.

 

Correct. It is a business expense just like income tax.

 

Property tax is not income tax. Two very different things. You can appeal to authority all you want.

 

Lol.

 

However, it is a tax and it is subtracted from the income. And the income tax is subtracted from the amount my wife and sisters received. It is also shown on the spread sheet as an expense. For example, if they paid $1000 in income taxes in CY2018, it was shown as an expense for CY2019.

I turn the spread sheet over to H &R Block to help them in their tax preparations.

 

Taxes are not an expense.

They are a liability.

They are paid on the amount that remains after expenses - actual expenses - have been deducted from revenue.

 

I have no idea what you're talking about. Sounds as if you were asking how capitalism would work without a stock market. (???) I have no idea, and I also have no idea what that has to do with anything I wrote.

 

So, two different calculations. Get it?

That must be something to do with the trust structure (if it's even legal). Normal firms can't claim the previous year's income tax as an expense in the current year.

 

Corporate income (profits) tax is not a business expense. Expenses reduce profits. Profits tax is levied on profits.

 

Except the tax on profits, which is after such expenses. That is the point.

Taxes on profits do not reduce profits. Hello?

The irony....

As they say in Japan, "It's mirror time!"

 

When my company pays taxes, those payments become an expense for the next tax period. Otherwise the taxes themselves would be taxed. It doesn't work that way. All expenses, including taxes paid during the taxable period are deducted to arrive at a net profit. Then we pay tax on that net profit and that payment is deducted from the next tax period like any other expense. Taxes are "actual" expenses.
A liability would be something like taxes due that have yet to be paid. If the company gets a tax bill, that bill becomes a liability. When the company pays it the liability becomes an expense. I promise. I'm not misleading you.

 

See my response to Clennan. It may help you better understand basic business accounting.

 

Taxes paid during the taxable period are expenses deducted from revenue to arrive at net profit. Then taxes are paid on that net profit and that payment becomes an expense for the next tax period.

I didn't say they did. They reduce taxable revenue.

Don't take a job as an accountant.

 

Wait a minute, I feel like something is wrong with the OP argument, I just can't put my finger on it. But I'll try...

Businesses have to pay for certain items like insurance and stuff that the government mandates that they pay for. And businesses can't afford to just raise their prices so that the consumer will pay for it all. Competition prevents that avenue from being crossed.

And some of the corporations on main street have to take out loans to operate. Anyway, it's money coming out of their own pocket, because just like above competition keeps the prices low.

While it's true that most of the money going into a corporation comes from the consumer, it doesn't mean that a corporation pays no money whatsoever. It's not a zero sum game.

 

Open your mind for a moment.
Investors for example, look at AFTER TAX corporate profits as a measure of the potential value of the company.
If it doesn't have any- it has not made money for anyone, and will soon fail if it can't do better.
If a company's business model projects that it needs an after-tax profit of 5%- then they must build in enough allowance in pricing and gross profit so that after corporate tax is paid, the target final net profit is met.

Do you consider the taxes you will have pay from your paycheck and look at your net take-home? Of course you do, or should.
IF you consider moving to take a job offer with higher pay but also higher taxes, do you not care about how the net income compares?
It's quite possible to take a higher paying job in another state for example, and net less take-home, because of taxes.

What I care about in my company is what is in my pocket after ALL expenses are paid; my actual spendable income. My marketing plan certainly considers all taxes as expenses- on a separate line from materials, labor, utilities, etc- but an expense just the same, which will be factored into the price structure necessary to meet the intended after tax net.

Now if it makes you happier to think this isn't true, just stick with it and be a happy armchair expert.
But- if you ever go in business for yourself, you would be wise to listen to those who have already been where you are going.

Market price and supply/demand can determine if there is a practical market for a product, depending on cost of production. But no company will go into the process of producing a product that fails to generate after-tax profits. Thus if you raise a corporate tax and take those profits, one of two things happen. Either the price of the goods goes up to compensate for the taxation and restore the profit, or the item is no longer viable or practical to produce, and goes off the market.
What will not happen is that the producer will continue to make the product at a loss or break-even selling price because of taxation.

 

You said.

After I said. "Exactly how does that happen without the capitol provided by the stock holders?"

You would get the impression from what you wrote, that only the workers are responsible for the products produced.

 

Not you're not misleading me, but you're most certainly misled.
Corporate income tax is never an expense.

It is a tax on income (profit before tax).

The system you describe bears no resemblance to actual accounting methodology.

Corporate income tax is detailed on the Profit & Loss statement AFTER revenue less expenses.

Tax due is a liability - an Account Payable (with a zero balance if paid).

Other Accounts Payable may indeed relate to expenses, and those expenses are debited to the relevant expense account (e.g. supplies, marketing,professional fee) immediately, without waiting for them to be paid.

 

His argument is correct. Taxes are expenses for a business as I have been trying to explain to others. They cause a reduction in net profit. Businesses set prices based on a bunch of things. Competition is one of them. But the cost of operating the company is another one. If competitive prices cause a company to operate at a loss, the company will fail. So it is normally necessary to adjust prices upward as expenses increase. Since tax laws affect every business the competitors face the same financial realities. Prices will rise because of the tax increase.

He states that businesses are like tax collectors. That is true, for instance, with state sales taxes. When the company collects sales tax from its customer it creates a liability - a debt to the state equal to the sales tax collected. When the taxes are paid they become an expense equal to the amount collected in the first place. So the business is back to even. Our state allows for a modest collection fee to be deducted from the sales tax payment but that may not be the case in other sales tax collecting states. We are tax collectors in effect.

Since taxes levied on the company cause price increases, those taxes are paid by consumers indirectly. You could say that the company becomes a tax collector but it isn't the same as collecting taxes levied on consumers. Hope that helps.