Corporations and taxes

[SpidermanTuba]

If corporations always pass their taxes off on the consumer, then why do corporations spend so much effort lobbying to keep their taxes low? What difference does it make to them, they aren't paying it, they make you and I pay for it, so what do they care?

 

[Mini 14]

Less taxes = more profit.

 

[SpidermanTuba]

Less taxes = more profit.

But the consumer pays the tax. So how does less tax = more profit? Just = lower price for consumer.

 

[Mini 14]

taxes are paid AFTER the sale has been made. We're not talking about sales taxes here, we're talking about income taxes. The less tax a corporation has to pay on their income, the more they have to pay shareholders or reinvest in the company. They *could* pass those costs on to consumers, in the future, but they (and the shareholder) are better served to keep the taxes as low as possible.

Sales tax isn't "passed on" to the consumer. It is a tax the consumer pays and the company holds for the various taxing authorities. When I collect $1 from a customer, I have to pay 8 cents in tax, then I get taxed at the end of the year on my profit. THAT is the taxes corporations are fighting, not the sales tax.

 

[SpidermanTuba]

taxes are paid AFTER the sale has been made. We're not talking about sales taxes here, we're talking about income taxes. The less tax a corporation has to pay on their income, the more they have to pay shareholders or reinvest in the company. They *could* pass those costs on to consumers, in the future, but they (and the shareholder) are better served to keep the taxes as low as possible.

Sales tax isn't "passed on" to the consumer. It is a tax the consumer pays and the company holds for the various taxing authorities. When I collect $1 from a customer, I have to pay 8 cents in tax, then I get taxed at the end of the year on my profit. THAT is the taxes corporations are fighting, not the sales tax.

Corporations don't mind sales taxes? Really?

 

[Oddball]

If corporations always pass their taxes off on the consumer, then why do corporations spend so much effort lobbying to keep their taxes low? What difference does it make to them, they aren't paying it, they make you and I pay for it, so what do they care?

It's easy to tell you're a career employee.

Would you want to hire tax accountants and keep tax attorneys on retainer if you didn't have to?

 

[Mini 14]

Corporations don't mind sales taxes at all. They don't like them, because its an accounting nightmare, but they don't keep them, and they don't count as income. They are nothing but a headache to any business (corporate or small biz).

I own a small business. Sales tax doesn't affect me at all, other than I have to collect it for the various agencies. I don't get to keep it, I'm just responsible for collecting it, then paying it to the various authorities.

I don't pay taxes on the items I buy to resell. Payroll taxes are much the same thing, but they are an even bigger pain than sales taxes.

Income tax is an entirely different animal. That is the one we all fight, and try to lower, because that is the one that comes out of MY pocket, and not the consumer's.

 

[Rat in the Hat]

taxes are paid AFTER the sale has been made. We're not talking about sales taxes here, we're talking about income taxes. The less tax a corporation has to pay on their income, the more they have to pay shareholders or reinvest in the company. They *could* pass those costs on to consumers, in the future, but they (and the shareholder) are better served to keep the taxes as low as possible.

Sales tax isn't "passed on" to the consumer. It is a tax the consumer pays and the company holds for the various taxing authorities. When I collect $1 from a customer, I have to pay 8 cents in tax, then I get taxed at the end of the year on my profit. THAT is the taxes corporations are fighting, not the sales tax.

Corporations don't mind sales taxes? Really?

They don't. Really.

Corporations are just tax collecting bodies as far as sales taxes. The local taxing authorities tell them how much to collect in sales taxes, (lets say 8.75%) and the corporation charges it and sends it to the appropriate government entity.

The corporation does not care how much the local sales tax is. It is charged on top of the price of their product. It wouldn't be their fault if the rate was 8.75% or 200.65%. If the local authorities charge an onerous rate, the corp. would point that out to their consumers.

 

[NYcarbineer]

If corporations always pass their taxes off on the consumer, then why do corporations spend so much effort lobbying to keep their taxes low? What difference does it make to them, they aren't paying it, they make you and I pay for it, so what do they care?

Because it's just a superficially attractive line that corporate shills use to try to fool people.

The other question is, if you don't want corporations to pay taxes, who DO you want to tax to raise that revenue?

 

[Oddball]

They don't. Really.

Corporations are just tax collecting bodies as far as sales taxes. The local taxing authorities tell them how much to collect in sales taxes, (lets say 8.75%) and the corporation charges it and sends it to the appropriate government entity.

The corporation does not care how much the local sales tax is. It is charged on top of the price of their product. It wouldn't be their fault if the rate was 8.75% or 200.65%. If the local authorities charge an onerous rate, the corp. would point that out to their consumers.

They do, really.

It means that they have to hire on people to keep track of and pay the taxes that they otherwise wouldn't have to (i.e. looyahs and accountants).

 

[NYcarbineer]

Corporations are taxed on their profits. That's an income tax, essentially. Why would they be entitled to tax free income, when you and I aren't?

Remember, they want to be 'persons' when it comes to influencing elections, via contributions (aka 'free speech'). Let them be persons when it comes to paying tax on the money they make, eh?

 

[Mini 14]

Small business accounts for over 80% of GDP. The more burdens placed on small business, the more fragile our economy will become. ALL businesses already pay taxes just as all individuals do. The difference is, small business taxes are even higher, and the restrictions placed on business grow more and more every day.

Obama's new COBRA regulations forced a LOT of small businesses to stop offering health coverage to their employees (mine was one of them). As ObamaCare goes into effect, even more small businesses will stop offering it to their employees, and in fact, proof of existing coverage will become a requirement for employment with almost all small businesses.

Income taxes, yeah, we'll fight them, especially when they become so high that they remove the incentive for growth or reinvestment.

Sales and payroll taxes? Other than the accounting nightmare, we don't care. Make them as high as you want, because we only collect them from our customers or employees, then send them off to whatever agency requires them.

 

[sangha]

Small business accounts for over 80% of GDP. The more burdens placed on small business, the more fragile our economy will become. ALL businesses already pay taxes just as all individuals do. The difference is, small business taxes are even higher, and the restrictions placed on business grow more and more every day.

Obama's new COBRA regulations forced a LOT of small businesses to stop offering health coverage to their employees (mine was one of them).

Liar. COBRA requires the former employee to pay the entire premium, so COBRA doesn't cost the business anything.

As ObamaCare goes into effect, even more small businesses will stop offering it to their employees, and in fact, proof of existing coverage will become a requirement for employment with almost all small businesses.

Another two lies!! And the contradict themselves. First you say business won't offer coverage, and then you contradict and say that offering will be a requirement

Either way because COBRA doesn't cost the employer a penny. It saves money for the employer

 

[Rat in the Hat]

They don't. Really.

Corporations are just tax collecting bodies as far as sales taxes. The local taxing authorities tell them how much to collect in sales taxes, (lets say 8.75%) and the corporation charges it and sends it to the appropriate government entity.

The corporation does not care how much the local sales tax is. It is charged on top of the price of their product. It wouldn't be their fault if the rate was 8.75% or 200.65%. If the local authorities charge an onerous rate, the corp. would point that out to their consumers.

They do, really.

It means that they have to hire on people to keep track of and pay the taxes that they otherwise wouldn't have to (i.e. looyahs and accountants).

Businesses already have these people on staff. They just have to use a few extra pencils to account for the sales tax. And work through their lunches.

At least that's how it works in the company I work for.

 

[WillowTree]

If corporations always pass their taxes off on the consumer, then why do corporations spend so much effort lobbying to keep their taxes low? What difference does it make to them, they aren't paying it, they make you and I pay for it, so what do they care?

they have to compete with the foreign companies birdbrain. god you people are DUmb

 

[Jon]

Corporations are taxed on their profits. That's an income tax, essentially. Why would they be entitled to tax free income, when you and I aren't?

Well, for one, when they pass their profits on to their investors and employees, those people are taxed again. Double taxation is epic failure.

 

[Mini 14]

sangha,
You don't own a business, do you?

The law that went into effect last year requires the employer to pay 65% of the terminated employees premium, for 18 months, the employee then has the option to extend COBRA another 6 months (for a total of 24 months) but the last 6 months the employee must cover 100% of the premium. The employer is able then to deduct that amount (the 65%) from his tax return. Small business operate to break even, so a tax deduction almost never is justified by the expense up front (the 65% of the premium, each month, for up to 18 months).

And you don't read well. Small businesses won't offer coverage (because they simply won't be able to afford it), and the potential employee (the person APPLYING FOR A JOB) will have to prove that he already has coverage before he will be considered for employment.

If you had read either the new COBRA legislation, or the new healthcare bill, you would realize that what I've stated here is simply the truth. Under our new healthcare plan, employers will have the right (and eventually the requirement) to verify compliance with the healthcare regulations by obtaining proof of coverage before hiring any new employee.

 

[Jon]

To be fair, Mini, the employer can take a tax credit for the premiums paid for COBRA, not just a deduction. Huge difference, but your point is otherwise valid.

 

[Oddball]

sangha,
You don't own a business, do you?

The law that went into effect last year requires the employer to pay 65% of the terminated employees premium, for 18 months, the employee then has the option to extend COBRA another 6 months (for a total of 24 months) but the last 6 months the employee must cover 100% of the premium. The employer is able then to deduct that amount (the 65%) from his tax return. Small business operate to break even, so a tax deduction almost never is justified by the expense up front (the 65% of the premium, each month, for up to 18 months).

And you don't read well. Small businesses won't offer coverage (because they simply won't be able to afford it), and the potential employee (the person APPLYING FOR A JOB) will have to prove that he already has coverage before he will be considered for employment.

If you had read either the new COBRA legislation, or the new healthcare bill, you would realize that what I've stated here is simply the truth. Under our new healthcare plan, employers will have the right (and eventually the requirement) to verify compliance with the healthcare regulations by obtaining proof of coverage before hiring any new employee.

If sangha has proven one thing since the day she swerved into this place, it's that she likes to have strong opinions on things she knows nothing about.

 

[Mini 14]

To be fair, Mini, the employer can take a tax credit for the premiums paid for COBRA, not just a deduction. Huge difference, but your point is otherwise valid.

Yes, you are correct, but I didn't want her head to explode

In either instance, my business is 14 employees with an annual revenue of between 1 and 2 million (revenues before expenses). Neither option was financially prudent, and we were left with letting our healthcare plan go, and offering a "insurance allowance" for those who chose to insure themselves. The liability of the new COBRA law was just too much for us to bear, as it is for most "smaller, small businesses"

And the 14 employees scares me as well, so we are in the process of deciding how to split our business into 2 companies to avoid the inevitable "scaling down" that will come when the Fed figures out how poorly these laws were written. Fortunately, my business is easily and currently often divided by other companies in my industry, so we will have precedent and current IRS code to validate our decision to split into smaller companies.