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oh look at mr genius repeating the thing a lot of geniuses like to repeat. im pretty sure you dont agree with that "corporations are individuals" statement so i guess that means that you agree with me that corporations shouldnt pay income taxes (its just the darn supreme court thats stopping it). right?
It doesn't matter if I agree with it or not, it's the law. Live with it. In these days of billions in retained earnings, the corporation is the only individual that ever receives the money, so that meets your criterion that income should be taxed at the individual level.
Yes they are - they are simply re-invested corporate profits that it uses to buy assets. When the corporation first made those profits it had to pay tax on them, then purchased the assets with post-tax dollars (retained earnings).
N Cole1, enterprises filing income tax returns are granted reductions from their taxable incomes for their wealth spent for educational or training purposes.
tax considerations of individuals’ wealth invested for their educational or training expenditures to reduce their own taxable incomes (unlike enterprises’ tax deductions) must meet some IRS qualifications not required of enterprises.
Excluding what’s not reflected within owners incomes not derived from their own enterprises, Enterprise time and effort expended for education are measured in labor costs and entirely enabled to reduce enterprises’ taxable incomes.
People’s time and effort expended for their own education is not enabled to reduce their taxable incomes. It only reduces taxable incomes to the extent that it reduces their current wages and salaries.
For many people, (particularly for those with family responsibilities), this greatly hinders the advancing of their education or training. Additionally much fewer enterprises now grant educational benefits and many of those that do grant such benefits require the education should satisfy what the enterprises’ consider to be their organization’s needs without regard to the needs or aspirations of their employees.
[Unfortunately the income tax averaging regulations did not address individual’s cash flow problems.
I was fortunate because my veteran benefits and working at temporary jobs enabled me to contribute to my parents expenses and continue studying. When I finished and had my first big increase of annual income, tax averaging enabled to significantly reduce my taxes].
Lower income persons do not invest money, they invest their time and effort which equates in lesser annual income and that lesser annual income is fully taxable. the consequences of that fully taxable lersser incomes is restriction upon those persons’ cash flows that are hindrances to their education.
There’s some validity to consider tax policies that directly reward investments of wealth rather than providing tax reductions to favored sources of incomes or for the methods of acquiring that income.
But we should then consider some method of rewarding the time and effort expended for education and training. Many people do not have money to invest.
Profit is calculated AFTER reinvestment, not before. I reiterate, all costs of doing business are 100% tax free. If you capitalize an investment you do have to amortize it over a few years. That doesn't change the fact that the whole investment is tax free. It may just take you a few years to write it off.
Many of you guys actually need to run a business. If I had an accountant who told me I needed to report unrealized gains for any reason other than padding the bottom line for investors, he would be looking for another job pretty quickly. The value of those assets is what I say the value is, and if some accountant can't make the numbers work on that he doesn't know his trade.
Larry Caldwell, long term capital gains are not incomes that werer previously taxed and that are not unrealized incomes.
I can't see the capital gains preference, either. Tax all income from all sources the same. Don't favor income from capital over income from labor.
And then there are the economic reasons. Capital gains preferences fuels a lot of Wall St. deal making, stock options compensation, mergers and corporate takeovers. It is doubtful, to put it mildly, if any of these financial shenanigans benefit anyone but the participants.
Wall St. makes out famously, the wheeler-dealers, financial engineers and speculators. They don't need help. They can fend for themselves without everyone else (who pays taxes, which is not a lot of people) paying more so they can pay less.
Eliminate the capital gains preference, mortgage interest deduction, state tax deductions, municipal bond expemption, etc., and you'd have a lot of money you could lower rates with for everyone who pays taxes. And a better, fairer economy to boot.
N Cole1, enterprises filing income tax returns are granted reductions from their taxable incomes for their wealth spent for educational or training purposes.
tax considerations of individuals’ wealth invested for their educational or training expenditures to reduce their own taxable incomes (unlike enterprises’ tax deductions) must meet some IRS qualifications not required of enterprises.
Excluding what’s not reflected within owners incomes not derived from their own enterprises, Enterprise time and effort expended for education are measured in labor costs and entirely enabled to reduce enterprises’ taxable incomes.
People’s time and effort expended for their own education is not enabled to reduce their taxable incomes. It only reduces taxable incomes to the extent that it reduces their current wages and salaries.
For many people, (particularly for those with family responsibilities), this greatly hinders the advancing of their education or training. Additionally much fewer enterprises now grant educational benefits and many of those that do grant such benefits require the education should satisfy what the enterprises’ consider to be their organization’s needs without regard to the needs or aspirations of their employees.
[Unfortunately the income tax averaging regulations did not address individual’s cash flow problems.
I was fortunate because my veteran benefits and working at temporary jobs enabled me to contribute to my parents expenses and continue studying. When I finished and had my first big increase of annual income, tax averaging enabled to significantly reduce my taxes].
Lower income persons do not invest money, they invest their time and effort which equates in lesser annual income and that lesser annual income is fully taxable. the consequences of that fully taxable lersser incomes is restriction upon those persons’ cash flows that are hindrances to their education.
There’s some validity to consider tax policies that directly reward investments of wealth rather than providing tax reductions to favored sources of incomes or for the methods of acquiring that income.
But we should then consider some method of rewarding the time and effort expended for education and training. Many people do not have money to invest.
Respectfully, Supposn
I think this points to a bigger issue - namely that corporations can deduct all their expenses while individuals can't, even some expenses that are work-related such as a commute to different job sites from home, a commute that cannot be avoided by moving when spouses have jobs in different parts of town, child care necessary for both parents to work if not reimbursed by a FSA, and for highly overtime workers (>60 hrs/week for those without kids and 50 hrs/week for parents) arguably even takeout food since their job makes it difficult to find time to cook, etc.
On the other hand, mortgage interest is a personal expense and shouldn't be deductible, especially if housing capital gains can be excluded. Interest should only be deductible up to interest on an amount of borrowed money equal to one's taxable investments - otherwise it's a double standard. And it shouldn't matter what secures the debt or what happened when it was originally taken out, since money is fungible.
Finally, capital gains should not be taxed at the income rate without adjusting the cost basis for inflation (And actually, I'd argue, neither should interest income for that matter - again because the portion of it that represents inflation is an illusory gain and does not reflect an increase in purchasing power.)
However, if investment return or interest is adjusted for inflation to only the "real" rate of interest or return, then interest paid would also have to be adjusted to prevent tax arbitrage. Or equivalently, only do the inflation adjustment on the portion of the investments the holder owns outright and exclude an amount equal to the borrowed capital.
Profit is calculated AFTER reinvestment, not before. I reiterate, all costs of doing business are 100% tax free. If you capitalize an investment you do have to amortize it over a few years. That doesn't change the fact that the whole investment is tax free. It may just take you a few years to write it off.
You're talking about the purchase of depreciating business assets such as vehicles and other machinery, right? In this case, there is only a capital gain for the shareholder if the stock is sold when the depreciating assets still hold value. In this case, the depreciation deductions have not all been taken yet, so we still have a case of double taxation!
Quote:
Originally Posted by Larry Caldwell
Many of you guys actually need to run a business. If I had an accountant who told me I needed to report unrealized gains for any reason other than padding the bottom line for investors, he would be looking for another job pretty quickly. The value of those assets is what I say the value is, and if some accountant can't make the numbers work on that he doesn't know his trade.
Yes, however, if a business does realize ordinary income (not a capital gain of assets being held) and uses it to purchase assets, then my above argument applies (unless we're talking non-durable short term assets like inventory or employee meals, in which case it's just a limiting case of the above argument with the asset lifetime effectively going to zero!)
It doesn't matter if I agree with it or not, it's the law. Live with it. In these days of billions in retained earnings, the corporation is the only individual that ever receives the money, so that meets your criterion that income should be taxed at the individual level.
it actually does matter since this is a conversation and i gave my opinion about corporate taxes. it would have been no different if i said "there shouldnt be corporate income taxes" and you responded "well its the law so live with it."
im giving my opinion and i think there should be a change. if you are happy with corporations being considered people and that justifies them paying income taxes, then that's fine.
You're talking about the purchase of depreciating business assets such as vehicles and other machinery, right? In this case, there is only a capital gain for the shareholder if the stock is sold when the depreciating assets still hold value. In this case, the depreciation deductions have not all been taken yet, so we still have a case of double taxation! ...
N Cole1, if an enterprise’s prospective depreciation has not yet been acknowledged on the financial statements and that materially affects the market price of the stock, that’s a case of buyers beware. Enterprises
may receive their tax deductions reducing their net incomes when they’re entitled to receive them but no sooner.
The example you describe is in no manner an example of income taxed twice.
... Increased values of certain assets must be recognized as unrealized gains, and are reported right on the income statement and therefore subject to tax.
***
Many of you guys need to take accounting classes.
Celcius, am I incorrect? Aren't we essentually in agreement?
I vaguely recall a scarcely, if not rarely encounter situation where unrealized income could increase an enterprise’s taxable income, but I don’t exactly recall and have not yet found an explanation of how that conceivably occurs.
Enterprises can choose among the conventional inventory methods that the IRS acknowledges. The consequences of enterprises’ choosing FILO, (i.e. last in - first out), their cost basis will be highly understated and their net profits thus overstated due to net currency inflation between acquiring and selling the inventoried item.
The IRS will not permit an enterprise to transform their inventory method without extremely good cause and certainly not simply because the change would be to the enterprises’ tax advantage. You cannot fault the law because an enterprise for reasons of their FILO rather than a FIFO method of inventory.
But this is not germane to long term capital gains incomes because the IRS will not grant the reduced tax rates for LTCG incomes derived from an enterprise’s sales or trades of items that are their usual types of inventory or sales items.
A key point is the net LTCG net profits' are due to the selling or trading an item is a “realized” rather than “unrealized” profit and is being taxed only once.
and relized it.
Respectfully, Supposn
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