If we charged taxes on revenue, vertical integration would skyrocket. Because the more hands their product goes through, the more tax they need to pay.
We could exempt B2B taxes from the revenue model theoretically though.
April 15th
Corporations should pay more taxes, but since people are talking about how it all works in reality:
Not all corporate expenses are tax deductible, and people are able to deduct a fair amount from their income when calculating their taxes.
Additionally, individuals are taxed on a progressive scale where anything up to ~$15,000 isn’t taxed. That number should be much higher to actually reflect cost of living, but you’re still paying less to account for cost of living.With $60,000 in income your taxable income is $44,000 after the standard deduction , and then you only pay taxes on about $30,000 of that because of the bracketing.
Poverty should be tied to livable wage and that bottom tax bracket should be too. So really, for single filer the first ~40k should be tax exempt.
It really sucks when you’re self employed. I can almost eliminate my taxes with expenses, except I still pay both the employee and employee tax for social security/payroll taxes which bare almost 15% I can’t avoid. Billionaires don’t pay that much tax ever. I can’t afford to go to the dentist.
The difference is that corporations have an army of tax lawyers that tell them what the tax loopholes are to exploit. Meanwhile, for most ordinary persons, it’s just them following orders from the government to pay up. One could read up on the tax rules yourself, but are people willing to spend hours reading boring documents they have no expertise of? I myself wasn’t aware of some of the tax benefits I could claim until much later.
Look up direct file
Yeah, we do get tax breaks, should be way more with inflation unfortunately.
If corporations are people (under the law) then the money they make is income and should be taxed appropriately.
But since money is free speech, making corporations pay taxes is compelled speech, which we’re protected against by our first amendment rights.
This just in: Saying that is now terrorism as well. Its apparently a form of protest against the government which is now totally illegal.
Bro, I am the biggest psychosexual narcoterrorist in the world. I lead a cult! It’s protected by the government, and I get benefits, too!
Corporation: We planned the next 2 years on an ever increasing income stream but the most minor inconvenience disrupted that so we had to lay off 9,000 employees with zero notice so we could meet our bottom line.
Government: That’s a shame, here’s $500,000,000 to help “mitigate” “economic conditions”.
The 9000 laid-off employees: Can he get $200 a week unemployment so we can afford to exist?
Government: You should have planned better.
The real difficulty is with the vast wealth and power in the hands of the few and the unscrupulous who represent or control capital. Hundreds of laws of Congress and the state legislatures are in the interest of these men and against the interests of workingmen. These need to be exposed and repealed. All laws on corporations, on taxation, on trusts, wills, descent, and the like, need examination and extensive change. This is a government of the people, by the people, and for the people no longer. It is a government of corporations, by corporations, and for corporations.
–Rutherford B. Hayes
Corporation privilege has been a problem in the US and the western world for a long time.
Edit: I found the longer version of the quote by Hayes.
/uj
The “money spent on survival” is the standard deduction and deductions in general. Deductions are viewed as if you never made that money in the first place. Whether standard deduction should be larger is another question.
Corporations can tell the government what their deduction is, the government tells normal humans what their deduction is.
The government tells you what the standard deduction is. You don’t have to claim that standard deduction. You can specifically itemize the deductions you wish the claim instead. You can claim considerably more than the standard, if you so choose.
Whether we should be able to claim more and whether the standard deduction is large enough are different questions.
Overall, the general shape of the system makes sense.
Everybody receives services provided by the government, so everybody should help pay for that government. The FDA tests to make sure food and drugs are safe. The NHTSA makes sure cars and highways are safe. And, of course, the big one, the military protecting the country from invasion. The standard deduction exists so that people only have to start paying taxes once they get their basic needs met.
Of course, I know that in the real world it’s much more complicated than that. The US military might actually make Americans less safe by getting involved in all kinds of conflicts overseas. The terrorist attacks of Sept. 11th would probably never have attacked if the US had a defence-only military. The FDA is being corrupted by an antivax nutjob, and so-on. But, the theory of everybody contributing taxes to pay for things provided for the common good makes sense. The real standard deduction is absurdly low and almost nobody can actually fully meet their needs with that minimal amount.
It also makes sense in the abstract that corporations don’t pay taxes on money that doesn’t get distributed to the owners. If a Mom and Pop grocery store is doing really well and Mom and Pop pay themselves huge salaries, they pay personal income tax on those salaries. If they arrange to do it through corporate dividends or something, then it’s the corporation that pays taxes. On the other hand, if the store is doing really well and they want to expand, it makes sense that the government not tax them based on their revenues if they’re re-investing those revenues into the business. If they’re investing the money into making a bigger, better store to serve their community rather than simply taking the money out as profits into Mom’s purse and Pop’s wallet that’s good for the community. Also, if Mom and Pop made $400k in revenue but spent $390k on expenses, and that includes the wages of some cashiers, it’s probably unreasonable to tax the revenue before the employees are even paid.
The problem is really in the various loopholes and ways corporations claim to be re-investing the money. We wouldn’t want Mom and Pop’s grocery store to be unable to expand because they’re taxed before they can even invest. On the other hand if Pop buys a Porsche SUV under the store’s name and claims it’s a grocery delivery van, that’s not fair. Other people have to buy their SUVs with after-tax money. In theory, if Pop is caught claiming that SUV as a business expense but using it for purely personal purposes, the IRS will go after him. But, of course, the reality is that companies get away with that kind of thing all the time.
I think part of the complaint here is based in the reality that corporations get away with lots of things, and that taxes are a real burden on the poor and middle class. On the other hand, I think there’s also a lot of financial illiteracy where people really have no idea how the taxation system works. They just see ragebait on social media and get angry because something about it seems unfair.
You can claim considerably more than the standard, if you so choose.
You can say that you would like to claim more, but the government sure as hell isn’t going to let you claim survival expenses like that. Go ahead and try to claim your rent. Unless you are using part of your rental for business purposes (not just living) they’ll just tell you to get fucked and pay the taxes anyway.
So yes, you can put it on the paperwork. But actually claim it? Almost certainly not.
It certainly depends on what you’re actually paying, yes. It’s very unlikely that your deductible expenses will be greater than the standard deduction. But, it is certainly possible under certain (rare) conditions.
Rent alone here is higher than the basic personal amount, let alone any other necessities. And I’m in one of the cheapest cities in Canada for rental housing.
Which is to say, almost every single tax paying person in the entire country would be getting more than the basic personal amount (Canada’s version of the standard deduction in the US) if we were allowed to claim basic necessities. And not by a small amount.
Rent alone
All you are telling me is that “rent” isn’t a deductible expense.
None of that changes the fact that if you have more deductible expenses than the standard deduction, you can claim greater than the standard deduction.
The standard deduction is ~$16,000 for a single person. Medical expenses are deductible. If they spend $32,000 in a hospital stay, they would be better off itemizing the whole deduction rather than taking only the standard deduction.
Of course, they aren’t obligated to itemize. They could just take the standard deduction and be done with it. That choice is available to them, foolish as it is.
Educational expenses are deductible. They can choose to spend much more than $16000 on school expenses, claiming much more than the standard deduction.
Again, what should and should not qualify as deductible, and the size of the standard deduction are completely separate questions.
None of that changes the fact that if you have more deductible expenses than the standard deduction, you can claim greater than the standard deduction.
You are missing the point that for a business everything is a deduction and for an individual almost nothing counts as an itemized deduction.
It is a lie to say “you could itemize” when the IRS specifically does not allow W2 employees to itemize rent, transportation, food, and entertainment.
We’re literally talking about corporations being “people” but able to deduct things that people can’t. If corporations are people, and they can deduct rent (they can) why can’t everyone else.
You’ve completely lost the plot mate. You can’t say THE LITERAL QUESTION WE ARE TALKING ABOUT is a separate question, wtf lol
Yeah, because $16k is enough to survive.
OP even acknowledged this and this shit is still top reply. Dumb fucks everywhere.
A diet of nothing but rice and beans, living in a rented room in a garage, and dumpster diving for all the remaining necessities and you can almost live in California!
I’m on a fixed income and cannot live in California. I do thanks to parents giving me some intergenerational wealth early by paying my $2k-ish rent for me. (They’re in their eighties and still alive.)
What timeframe is that $2k-ish rent?
New York? A half month in a leaky but somehow airtight corrugated metal shed, no air conditioning and a communal bathroom that also happens to be the yard your “bungalow” is in
Ohio? 6 months in a house that used to be someones starter home but they added more to the house, cut it in half, and now charge the same if not more rent for each half than someone paid for the original mortgage. You will be harassed for the rent because “i have to pay the mortgage” but it was paid off over a decade ago. The landlord takes multiple vacations, out of the country, every year. Conveniently around storms and bad weather, so when your roof falls in there’s nothing they can do for two weeks.
That doesn’t answer my question at all and you’re not the person I asked.
You’re right, of course. But I also think it would open up a giant loophole for the wealthy. A car is essential for survival! A three million dollar car? … A 15,000sqft house?
Of course, they could set reasonable limits. But when was the last time congress was reasonable?
Person: $16k for food is part of standard deduction. No deduction for car or rent if you are an employee.
Corporation (which is legally treated as a person): $150k for food for one party. $150k for CEO’s Mercedes. $500k for condo for ceo to use when visiting.
Pretty sure that’s the point
I’m pretty sure you are correct.
That’s the thing. Corporations report their own deductions, but individuals have to follow existing law, when there’s a high variance among necessary spending
You can also report your own deductions if you itemize. If your income is low, the standard deduction is probably just significantly bigger than your itemized deductions.
Legal deductions are extremely limited if you are an employee. You can’t deduct your car, your rent, or the big screen TV you bought.
For employers, anything that didn’t end up in the bank at the end of the year is a deduction.
You definitely want to be operating some sort of home business on the side, even if you are employed. You don’t get to count employment-related expenses, but you do get to count expenses attributable to that separate business.
Also, not true. You can deduct any expense needed for work. Uniform, supplies, food if you’re required to eat on the clock, car payments if you’re a delivery driver, all deductible. You can deduct a haircut if your employer has a grooming policy.
It’s just not worth it for most people. You need to save receipts and be able to prove it was a job-related expense, and if you do something wrong, you could be charged with tax fraud.
Commuting to and from the job is an expense needed for work. You can claim that part of your non-reimbursed travel expenses to temporary work sites that exceed your normal commute, but you can’t claim your normal commute.
You cannot deduct your commuting expenses. Not gas. Not bus fare. Not parking.
Uniform items are deductible only of you don’t get a uniform allowance.
If they give you a $50/yr boot allowance, you don’t get to claim your $300 Red Wings. If you buy your own tools but your employer provides a (shitty, shared) set, you don’t get to deduct your tools.
But, this is all about W2 employment. In practice, the overwhelming majority of expenses you incur in the process of W2 employment are not actually deductible, because your employer is already taking the deduction.
But, if you are running your own home business, your usual workplace is your home, and you can claim transportation expenses anywhere you need to go for that business. You can deduct the use of a part of your home. You can deduct part of your utilities, your wardrobe, your tools. Even if your home business is one of the 30% that are operated at a loss, you can deduct the expenses incurred while doing business, and offset a part of your W2 income.
People can report their own deductions, too. It’s just not worth it for most people.
The problem is that the IRS “doesn’t have the resources” to audit corporations and millionaires. They basically only audit small business owners.
Edit for sarcasm quotes
Even that though, you can only deduct part of your living expenses. There is no food deduction afaik, there is no deduction for insurance as far as I know.
Most of us also pay a much higher proportion of our income in sales taxes. Businesses are exempt from such taxes; they are only paid by the end user.
That’s absolutely not true. Businesses pay sales taxes, too. Nonprofits/churches/etc are exempt, but otherwise, every transaction is taxed.
No, that’s incorrect. I am very well aware of this. Businesses only have to pay sales taxes on purchases for which they are the end user. They’ll pay sales taxes on their office supplies and services provided to the business. But manufacturers do not have to pay sales taxes on the raw materials they purchase. Retailers do not pay sales taxes on wholesale purchases they make for resale. Only the end-user pays the sales tax on a purchase.
I work with a couple vendors that do not collect sales tax at all. They only sell B2B, and they only sell to businesses who provide them with a sales tax exemption certificate.
What you are describing is more akin to Europe’s VAT system. Still, under VAT, everyone in the chain pays VAT, and each vendor remits the collected VAT to the tax authority. But, the business-buyer reclaims that VAT from the tax authority if they are not the end-user of the purchased product. Everyone but the end user can reclaim their VAT payment.
Which is ass backwards. Audit those with the highest amounts and they made way more money. It’s proven it worked that way until they cut funding for it
I’m pretty sure I read that auditing the wealthy is a huge profit center for the IRS, because they find people who aren’t paying what’s owed. Naturally conservatives (of any party) hate this and gut it whenever possible
Auditing in general is profitable, but it’s mostly due to it being automated for people that aren’t making 7 figures. Auditing the not absurdly wealthy is also generally a positive revenue. Auditing the extremely wealthy tends to not be a great net benefit as the costs of lawyers and court time outweighs the settlement check at the end. There’s an argument to be made it’s worth the cost to ensure the ultra wealthy do actually pay though.
It’s billions of dollars of tax “avoidance”, cheating, and simply not paying. Unfortunately, the wealthy who are calling the shots don’t really want to pay millions for IRS lawyers
Yeah, if you look at the numbers it’s obvious. But libertarians don’t let facts get in the way of a good narrative.
I think part of OP’s frustration is that corporations (and the wealthy, for that matter) have a lot more loopholes to be able to claim deductions compared to the average person. And people are spending money to just survive, which seems more important than making a profit. The average person doesn’t have the resources to access these loopholes.
Loophole example: say you’re just a common multimillionaire. You want to own multiple properties, but to just go out and buy them, you’d need to spend your income on them, which you can’t deduct from your taxable income. Instead, you incorporate a private consulting company (just yourself) and instead of you buying those properties, your business buys them for you. You know, so that you can have somewhere to stay when you travel for business. Those become deductable expenses, and your company doesn’t pay any tax on the income used to purchase them. You pay yourself a meager $50k per year, pay almost no tax, live luxuriously, and write condescending posts on LinkedIn. Congrats, you win capitalism.
When you say that OP is “frustrated” it feels like what I see everywhere. People see the most abhorrently FUCKED UP shit and go, “huh.”
I WANT YOU TO GET MAD, GOD DAMNIT. I WANT YOU TO GET UP OUT OF YOUR CHAIR AND SCREAM, “I’M I HUMAN BEING GOD DAMNIT! MY LIFE HAS VALUE!”
People have been doing that. There have been more protests in the US recently than in memorable history. But it would seem that screaming is falling on deaf ears. So it’s the next escallation after screaming that people are doing that seems to be making more of an impact. And while it’s unfortunate that we need remorseless Italian plumbers, it does bring a sense of relief that it seems to be rattling some of the wealth class.
For what it’s worth, humans have historically been really great at ignoring absolutely abhorrent things. Our brains are wired to help us survive, and sometimes that means normalizing the fucked up stuff so that we’re not completely overwhelmed with the absolute fuckery of the world around us. It doesn’t make it okay, but there’s a biological reason for people going, “huh.”
I do get mad. I get banned on a near-daily basis for spitting facts, like how the Earth doesn’t exist and how we live in a police state, which is obvious when you think about it.
That was the point of Occupy Wall Street. The movement formed in response to the subprime mortgage crisis and resulting bailouts, in defiance of capitalist principal, and without similar response to the people suffering thanks to the crisis and following recession.
In fact, even though Obama navigated through the crisis, almost everyone with financial investments gained profit through the ordeal while the common US worker was in worse straits, which made the people, specifically, uneducated white men, angry and frustrated and set them up to be manipulated by Trump.
Well yeah, at this point the corporation and government are the same person.
I’m a Democrat. Not specifically in the party sense but in the genuine belief Democracy is the very best organizational form of government we have… But damn if it isn’t dependent on having a well informed, educated citizenry to thrive. Wealth inequality got so out of control and foreign governments undermined us to such an extent our citizens are mostly clueless to being played.
People usually call that a “lowercase D democrat”
I always mix those up, let alone wonder how well other people know the difference so I just tend to explain as I go kind of thing, if that makes sense
“D” is capitalizing a proper noun, the name for the political party. Proper nouns should be capitalized.
“d” for the system of governance, not a proper noun.
Anyone that cares to know the difference will likely note it. Hope that helps.
How do you define best?
The United States (we are a republic anyway I think) is barely 250 years old and falling apart.
We have huge societal problems and we are executing people in the streets.We are built on genocide and theft.
It’s not working out imo. I don’t have a solution, but indirect democracy seems to have perverse incentives that lead to this.
I don’t have a solution, but indirect democracy seems to have perverse incentives that lead to this.
That kinda does imply a solution, doesn’t it? The voter fatigue problem of direct democracy can be solved with modern communication technology and liquid democracy.
Yes, but I trust tech less and less everyday.
Something like a public Bitcoin ledger could be interesting for signing your vote and ensuring nobody changed it.
My fear would be th middlemen. Even if we have an open protocol, someone has to wrap it in an app that people can use. Someone has to host the servers. Even the network infrastructure that you and I are using to talk can’t be trusted anymore.
I guess I define best by asking myself if I’d prefer at this moment to live in any other system. Not really. Longer civilizations existed but they subsisted off of imperialism, sacrifices to the gods, and slavery. They made marginal improvements but did not expand median life expectancy to the extent our democracies did either. The number of rights attained in such a short time for disenfranchised groups is also unparalleled.
Despite what people complain about wars, we are actually living in some of the most peaceful times in human history – again much of this is thanks to the imperfect improvements of Democracy.
I totally get what you’re saying… but to be fair if you did allow people to deduct all the money they spent in a year from their income, it would specifically encourage a lot of people to spend every single dollar they earned just to avoid the taxes.
They’d be like “hang on, if I spend $3000 a month on rent I get taxed on the $1000 I have left over? What if I move to a place that costs $4000 a month? No taxes? That’s what I’ve got to do then!”
Is that sensible? No. The tax they’d pay on the $1000 is way less than the extra $1000 they’re planning on spending to avoid it, but people seem to have a real aversion to a little tax, and many would feel they “got something” for the extra money they spent on groceries or restaurants or rent, compared to the taxes which are simply taken from them.
I’m not saying it couldn’t work, I’m not saying there aren’t better ways to do it, and I’m definitely not saying there aren’t weird cliffs in programs like this that lock people into poverty. But I’d be worried that people who are already wrong about graduated tax brackets, for example, would make a lot dumber choices if they felt they could spend $40 on fancier bread to avoid “$40 of taxes”
This just sounds to me like a strong argument for not letting corporations deduct expenditures from taxable revenue.
Holy shit what are these AI-ass essay length replies, tax corporations more you fucking squares.
Sorta, but despite what some governments have decided, corporations typically aren’t people. Most companies don’t want to accumulate savings, the way humans do. Profit is cool, for sure, but companies don’t save up for retirement, or go on vacations, or have kids. So some buffer to survive a less profitable year, or a costly watermain break or something, is prudent but that’s where it might end.
Anything more than that, and maybe you hire some new staff, in which case that expense to you becomes income for your new employee, which they pay income tax on. Or you buy more merchandise, which the government may collect sales tax on. Or you may expand your office, and the government collects tax from the construction company and property tax on the new unit. Or you may offer a bonus to your existing employees, which is again income tax for them. Or you could issue dividends to shareholders, which they’re taxed on when they receive them.
So the logic is that the things a company spends its money on are taxed in different ways, and the corporate income tax is basically the catch-all for “and then the rest of the money you didn’t spend some other way”
Now, do we lowly humans typically get double-dipped when we have our income taxed, but then after that also sales tax when we buy stuff? Yes. Yes we do…
It makes plenty of sense for them to not be taxed on their gross revenue.
You’re thinking of this from a mega-corp standpoint when you should be thinking of this from a small business standpoint. Mega-corps really should be forced to abide by different rules, in my opinion.
Let’s imagine you own a bakery shop and it brought in $1,000,000 in revenue this year. You spent $400,000 on raw ingredients, $250,000 on salaries and personnel, and $150,000 on maintenance and equipment…etc
At the end of the year, your business would go bankrupt if it was expected to pay taxes on that million dollars, despite your operating expenditures eating up the grand majority of your year. Similarly, every dollar you spend and every dollar that is spent on wages or salaries is taxed anyways, first or second hand.
That’s why that exists.
It makes sense for small or even large businesses.
Where the whole thing breaks down is when you have mega corporations like we do today. Who have accumulated wealth, power, and influence well beyond the scope of what any of these laws and regulations were meant to handle
Isn’t this what business do to avoid paying taxes also?
nO YoU dONt unDErsTAnD iTS a ComPAnY iT sHOuldNT pAy TaXEs!!!
Yes.
Company A gets 1k. 1k is revenue.
Company A spends 1K at Company B. 1k is expense.
Company A has made 0 profit. 0 taxes.
Now if Company A owns Company B did it really lose 1k?
This is how money laundering works. More money more problems. You just have to leave a convincing paper trail an accountant will follow. Eventually they won’t be able to follow that the flour supplier Company Z that Company B buys from for it’s cookies is funneling Company B’s money back into Company A. The accountant doesn’t know that B isn’t buying flour or making cookies. Sometimes they even make cookies…
That’s not money laundering, though. That’s just normal fucking loophole and corruption in our tax system that only the larger players get to really benefit from, while all the small players, a.k.a. all your local businesses or even regional businesses, usually aren’t large enough to take advantage of that sort of thing.
deleted by creator
Or, hear me out, corporations pay taxes on their total income as well.
Business spent 3.9B dollars on vaporware. That’s the problem. Or stock buybacks. Or settlements or CEO bonuses. Not on better wages or anything opex related. Basic capex to keep things up to code/inspection/regulation/etc.
It’s where the money is going that makes it a scam.
Does that include your local or regional convenience store or your local bakery or any of your local businesses as well, who would most definitely go out of business and go bankrupt because the grand majority of the revenue is spent in operating expenses.
I’m sure a ton of megacorps would love to buy up a bunch of new failing small businesses to enshitify and roll them into everything that you already hate. Funnelling money out of your local communities, making your local communities even poorer than they already are
No business would survive without doubling or tripling their profit margins, and we’d all suffer insanely high prices
What do you think all that tax revenue is for?
A corporate environment without wiggle room for excess would also shake out a lot of grifters.
Cut CEO and upper management wages then. Those taxes should be guaranteed to the country and should have been there from the start. There wouldn’t be any national debt and publicly funded projects wouldn’t be starving like they are now. Hell, even income tax could be wiped away from the money they’d pull in from taxes.
If in the US, a corporation is technically a person, they should also be taxed like any other person.
The grand majority of businesses are smaller, medium-sized businesses, not huge corps that have golden parachute CEOs.
So, by doing this, all you would do is kill all your local businesses, and the large megacorps that you hate would happily swoop in and gobble them up and consolidate them and then enshitify them.
This would be like shooting yourself in the liver to spite your enemy.
Second-order effects are a thing. Laws and regulations need to target these large corporations who are abusing the tax system.
Wouldn’t spending every last dollar result is more sales tax?
They make older people spend all their money to get long term care with Medicare.
Nursing home care is incredibly expensive but Medicare will only help you pay for it if you get rid of all your income and assets until you get to their cutoff limit before they’ll help you pay for it.
There is a whole industry built in helping older people spend their money so they can get health care.
This. They may also make you sell your house too. I spoke to a family who was trying to get a loved one in a nursing home and they said they were quoted something like 20,000/mo. I asked if they meant per year and they reiterated that it was per month. All that money for a place that will let you stew in your own feces…
People have a real aversion to a little tax because right now in many (all?) places it means “money I earned through hard work is going to fund some rich asshole’s party, safe some breadcrumbs that somehow made their way into funding something beneficial to me or other folks like me”. With this fixed, at least I will have no problems with taxes
I’d rather just start with them taking the appropriate taxes out of my check rather than me paying a company for them to tell me I owe another 2-5k
Intuit bribed trump to kill irs autofile.
And the money they spent on that bribe came out of the pockets of its customers. But, not to worry, with no IRS autofile, those customers now have limited options so Intuit can now raise its prices to recoup the bribe money and more.
It’s just good business.
Yet this isn’t all on Trump, his is just the most recent insult
It’s on Sasan for making the bribe
True
Thank that company for lobbying against automated taxes.
The best part is that, legally, they’re both considered people.
And in parts of Delaware, can both even vote!
Now get people to be recognised as corporations
May?
They’re giving them an extra month, how charitable?
I don’t know about you guys and your local tax laws, but I can deduct the costs of earning my income from my taxable income.
Transportation to the job, further education for the job, (if I had any) the costs of having my kids looked after while I work, that sort of thing.
Fundamentally very similar to how the business deducts operating cost from revenue, before paying taxes on profit.
the costs of having my kids looked after while I work
Uh, this sounds like a “not in America” thing. Can you confirm that and/or link to the rules that let you deduct childcare expenses?
Ive got family members who would love to hear about that if it is a thing.
Yes, this is how it is under the cantonal tax law of Canton Zürich in Switzerland.
He’s on a German server but I’m in the US you can deduct some childcare expenses. I use the Child and Dependent Care Credit
It’s very little. You can easily pay thousands out of pocket for child care to get a fraction of it removed from taxes / “back”
It is very little and qualified. The place one of my younger kids go qualifies but not where one of the older one’s is.
Good catch on the German server bit. Def escaped my notice.
I’d argue the necessary upkeep to remain alive and functional as an employee should be included as a cost of earning your income. Where I am you definitely can’t deduct housing, food or transportation costs. Limited deductions for child related stuff.
Transportation to the job,
Normal commuting expenses are not deductible. You can only deduct transportation expenses to work locations other than your usual workplace, and then only that part of your expenses that exceeds your normal commute.
You can itemize other “costs of earning [your] income”, but for most people, the standard deduction is substantially greater.
Normal commuting expenses are not deductible.
Not true for me. I did say I didn’t know about your locals laws, seems the inverse is just as true
This is the case in most jurisdictions but the line between expenses that are incurred in the course of earning your income and those which are not will vary to some extent.
For example, the cost of driving to and from work is generally not deductable, but if you need to travel to some third location then that is generally deductable.
It doesn’t really matter exactly where the line between deductable and non-deductable is, because the same rules are applied to everyone in the jurisdiction. For example, if you decide that everyone can claim the cost of driving to work, then the tax rates need to be higher to ensure sufficient tax revenue for the government.
That said, you’re correct that the difference between a corporation and a person is the extent to which their activities are income producing. Everything a company does is in the pursuit of profit, so all expenses are deductable against income. In fact tax law prohibits company’s spending money for other purposes.
Hmm… Sounds like we should do some tax magic to file our cost of living as operating expense in some way, we can’t earn those income if we are not alive after all.
You can’t deduct personal expenses, but you absolutely should be operating a side business with its own deductible expenses. That side hustle will probably be operating at a loss, and that loss will offset your W2 employment income.
Either this is highly exaggerated, or whoever is doing your taxes hasn’t explained to you the various deductions you should be claiming or enjoying, from standard/basic deductions, to tax credits and programs, not to mention tax brackets.
That being said, is there a massive discrepancy in how little tax corporations and the rich pay compared to the little guy? He’ll yeah there is.
For nearly everyone the standard deduction is the way to go lately. If you itemize it’s absolutely not the same as businesses being able to deduct their business expenses. There’s a good argument businesses should be able to deduct these expenses in my opinion, but for individuals itemizing their deductions it’s absolutely not comparable.
My hypothesis is that the tax system does not explicitly favor the rich - it favors those who can navigate its complexities. Which is the rich. Not because they are smarter - because they can hire accountants and tax consultant.
Nope. While you can exploit complexities and loopholes, the top 0.1% is propotionately taxed less by basic design anyway. No need of fancy double Irish dutch sandwich or whatnot.
What they’re saying is that it is bullshit for a corporation to dodge taxes on their expenses (no matter how frivilous) but normal people can’t deduct necessary expenses.
You can deduct your rent. You can’t deduct your food. You can’t deduct your vehicle to get to the job you’re getting taxed to do.
It’s not “dodging”, and your bills would be a lot more expensive if the government insisted on billing companies by their revenue instead of profit.
But you shouldn’t be paying any income tax if you barely make ends meet.
