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... There is a difference between markup and profit which is determined by Generally Accepted Accounting Principles, and audited for compliance.
There. I fixed it for you
Quote:
Originally Posted by The Maleman
... These methods will invariably produce the smallest result possible to lessen the tax burden.
GAAP accounting methods have nothing -- NOTHING -- to do with the IRS and the amount of money paid to the IRS, and state and local taxing authorities.
The IRS is on-site 52 weeks/year at every major corporation, continuously auditing the corporation to determine the amount of taxes owed. There is never a point in time when the IRS is NOT auditing the corporation. There is no illegal tax manipulation going on - it just doesn't happen, period, except in the minds of the progressive left for whom "corporation" is a four letter word.
1) those majority shares in just about all companies is owned by executive management, especially CEO's, so just exactly who would an employee wage increase take from?
2) supply and demand. Lower profit means lower share price, which takes from whom? The owners/shareholders who are really executive managements, expecially CEO's. Joe citizen may think he is a company owner, but he gets nothing but crumbs in the form of dividends, while the elite get stock options plus great big old bonuses. Let's hear it for the system.
1. Is completely incorrect in most cases of s&p 500 companies or all listed companies for that matter
2. Because #1 is wrong #2 is also wrong mostly because you don't understand the ownership makeup of public companies
GAAP accounting methods have nothing -- NOTHING -- to do with the IRS and the amount of money paid to the IRS, and state and local taxing authorities.
The IRS is on-site 52 weeks/year at every major corporation, continuously auditing the corporation to determine the amount of taxes owed. There is never a point in time when the IRS is NOT auditing the corporation. There is no illegal tax manipulation going on - it just doesn't happen, period, except in the minds of the progressive left for whom "corporation" is a four letter word.
Why do you feel the need to "fix" something which is not broken?
I did not mention GAAP in my previous post, nor did I state that anything illegal was going on.
I am speaking of the ways that companies authorize and allocate certain expenditures which are indeed aimed at reducing the reported gross profit margin. Tax shelters are a part of this as well.
Is this too complicated for you to understand?
Why do you politicize everything?
What? Management owns the most? That is so untrue... Other than family businesses where most shares still lie with the founders - not the management - most shares Lee with funds and with early venture capitalists.
Management might fall under "Households" (37%) in this chart from Harvard Business Review? Hard to see that they would be anywhere else (all smaller - certainly not "the most"). https://hbr.org/resources/images/art...1207B_B_LG.gif
Thanks to Green_Mtn and ruuff for driving this into an off topic "wage discussion".
You post the following:
As the article says: "The public that believes in the fantasy-world of sky-high 36% profit margins would naturally think companies are just being greedy and stingy when don’t pay higher “living wages†and have to be forced to do so through minimum wage, or living wage, legislation"
And then blame others for "driving this into an off topic wage discussion"?
Thanks to Green_Mtn and ruuff for driving this into an off topic "wage discussion".
I have a feeling for these people, if companies had merely a 0.01% profit margin, that the discussion would still be the same.
Anyway, thanks to those who provided some honest input and argument.
Hopefully, some will see the problems with perception getting rather far from reality.
Yep. They think the problem with wages is that Big Bad Corporations are squeezing the workers. Instead, they don't seem to understand that a corporation's job is to deliver profit to shareholders.
Want to address the problem with wages in this country? Easy. Tighten up on illegal immigration. As in start deporting immediately. Arrest a few company presidents who flout the law. Because when you have millions of illegal immigrants in the labor pool, the law of Supply and Demand comes into play. The more workers there are, the lower the labor costs become.
That means that lower wages are a failure of public policy, not of the corporations.
As the article says: "The public that believes in the fantasy-world of sky-high 36% profit margins would naturally think companies are just being greedy and stingy when don’t pay higher “living wages” and have to be forced to do so through minimum wage, or living wage, legislation"
And then blame others for "driving this into an off topic wage discussion"?
You and I know that this thread is not about wages.
Few people, when posed the question in the title come close to the actual profit margin (and some kind folks provided alternative measures from reliable sources that reinforce the point).
Personally, I found the survey results rather surprising (how high most people thought it was) and wanted people to try the thought experiment here. I suspect many readers who did not post may well have been estimating closer to the survey average.
What is the impact of that?
This is about how "misperception" about the real world allows people to jump on board for policies that won't deliver their promises, and never will.
Yep. They think the problem with wages is that Big Bad Corporations are squeezing the workers. Instead, they don't seem to understand that a corporation's job is to squeeze the workers.
Fixed.
Of course the corporations want to lower expenses. No rational person has an issue with that. The question is, what has happened to the opposing force? Why has the bargaining position of the worker declined so much, and with it the wages?
The OP and a lot of other people seem to believe that even though the profit margins are higher than they've ever been, they still aren't that high... so there is no way that wages could be increased a sizable amount. This shows a basic lack of understanding of economics. For instance if the minimum wage doubled, aggregate profits would not be effected at all. How is this possible? Because all the company's competitors would experience the same cost increase and increase prices accordingly. Increasing wages only has a *potential* detrimental effect if it is done in isolation and it puts the company at a competitive disadvantage. But many companies have found that it actually helps their bottom line by allowing them to attract better employees.
This is about how "misperception" about the real world allows people to jump on board for policies that won't deliver their promises, and never will.
What policies are you talking about?
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