Taxing corporate top lines instead of bottom lines

Discussion in 'Politics' started by manifold, Oct 2, 2009.

  1. manifold
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    manifold Diamond Member

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    Might it make more sense to tax businesses on their top line sales/revenue rather than their bottom line profit?


    Seems to me it would be simpler, making it more difficult to successfully evade. And when I say it would be simpler, that is a massive understatement. The complexity, and therefore opportunities for obfuscation, in calculating profit is truly astounding. In the current landscape, revenue recognition (which is only one component of profit) has grown fairly complex all by itself. But if businesses had to pay a tax directly linked to every dollar of revenue, the incentives to inflate the books would likely be mitigated by the incremental cost and the incentive to deflate the books to avoid the tax would be mitigated by not wanting to report poor performance. Oh, and by the way, a well run, profitable and honest corporation would welcome this because it would save them a lot of money in tax attorneys, accountants and time.

    Discuss

    PS: Just to state the obvious for those who require it, the rate structure would be a lot lower than the current rates on corporate profit.
     
  2. Ravi
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    Ravi Diamond Member

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    So if I have 100,000 in revenue at a 10% tax rate I'd have to pay $10,000 in taxes.

    If it cost me 80,000 to get 100,000 in revenue, half of my profit (20,000) would go to taxes. As it stands now, if the tax rate were 10% my tax burden would be $2,000.

    This is the nuttiest idea you've had yet.
     
  3. manifold
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    manifold Diamond Member

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    Once again demonstrating you're an abject failure in simple mathematics. :rolleyes:

    PS: The PS in the OP was for you. :eusa_shhh:
     
  4. GHook93
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    GHook93 Aristotle

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    Um NO! It would prohibit most start up companies and create even more incentive to go over seas! Why not, not tax corporations, income, capital gains (stocks) or payroll at all and tax output aka the Fair Tax! That would give our corporations a huge advantage in the global market, even our depleted manufacturing sector.


     
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  5. manifold
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    manifold Diamond Member

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    :confused: Define "output" please.
     
  6. eagleseven
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    eagleseven Quod Erat Demonstrandum

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    This plan would kill entrepreneurship as we know it.

    Most start-ups take several years to actually show a profit. So, you would be demanding young companies pay taxes on money they don't have...which would effectively bankrupt them.

    With taxes on raw revenues, say goodbye to innovation and rapid economic growth.
     
  7. manifold
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    manifold Diamond Member

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    Bullshit.

    Venture capitalists will still invest in companies with a solid business plan. A variable cost on revenue for tax is just that, another variable cost of doing business.
     
  8. Soggy in NOLA
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    Soggy in NOLA Platinum Member

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    Dumbfuck thread alert!
     
  9. manifold
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    manifold Diamond Member

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    I guess you retards don't much care for sales taxes either. What I'm talking about is conceptually the EXACT same thing.
     
  10. Valerie
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    Valerie Gold Member

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    Taxing Corporate Income in the 21st Century - Cambridge University Press
     

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