reply to post by scubagravy
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
As true as that statement is, there's something about being a dumb old redneck that makes me want to wag my jaw anyway...
reply to post by SpartanKingLeonidas
Usually, it is the opposite, the more money you make, the more taxes are escaped.
Tax loopholes, accountants, and a tax-shelters.
In some respects, you are right. But the theory, regardless, is sound.
What we as a society need to do is not to attack and demonize the rich. We need not try to destroy them with higher taxes. What we need to do is
examine those tax shelter and loopholes and eliminate the ones that seem unfair.
Another thing that you may not realize is how
corporations get taxed.
The purpose of a corporation is not to make money for itself, but to make money for its shareholders
. If a corporation makes, say
$1,000,000,000 and has expenses to operate of $500,000,000, then it has made a profit of $500,000,000. Should it pay tax on that? Not if it
doesn't keep it
If that corporation has 500,000 shares outstanding, then it owes the owners of those shares a portion of its profits. That means that $1000 will be
paid to each shareholder as their portion of the profits. Now, deduct that $500,000,000 paid to shareholders from the $500,000,000 profit and you have
a net balance of --- $0
! The corporation pays tax on $0. The corporation has $0 more now than it had last year. Each shareholder then pays
taxes on the $1000 per share they received.
Tax is still paid. But the little old lady who owns 20 shares her late husband bought and has no other income gets $20,000 that year and pays taxes on
that (which probably means she pays no taxes at all). The executive who owns 1000 shares gets $1,000,000 and pays taxes on that combined with his
other income. And so on and so on.
The tax is still paid, but it is paid by individuals
who own the corporation, not by the corporation itself. Anything else would be double
So the next time you hear how GE made billions of dollars in profit and paid no taxes, remember that GE has no face, no soul, no humanity. It is a
economic machine, owned by thousands upon thousands of individuals. Sure, it paid no taxes, but the people who own it certainly did.
And in the process, you have appliances and light bulbs available at the local store for you to buy.