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Originally Posted by Mavdog
it isn't the categories themselves as much as the opportunities for abuse.
should a company get to deduct renting a bentley when another car will do just as well?
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Companies have two masters...profits and possibly shareholders.
Does your company rent bentleys? If so don't you think the shareholders would have something to say. As well as if they didn't rent bentley's, they could spend more on employees or bonus's.
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should a company be allowed to depreciate a new piece of equipment in one year when its useful life is 5 years?
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I don't know, nor do you. Give me an example?
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should companies be given a tax credit for advertising when they don't really need to advertise (drug cos come to mind here)?
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Who's to say they shouldn't, the guvment? Why wouldn't someones life be enhanced by seeing a drug that might resolve one of their symptoms? Do you think somehow that doctors know everything?
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should a company get to deduct costs of a move when it was intended to just get closer to the ceo's residence?
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Do you have examples of this, it sounds ludicrous. See #1.
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there really isn't a need to cite how companies abuse the "business entertaining" deduction is there...
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Have you ever been on a business meeting that went through dinner? Do you ever try to make a sale anywhere? Do you ever host a business client? Thinking that all business gets done 9-5 is asinine.
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in 2006 businesses paid a total of $395.5B in income tax, while individuals paid $1,366.241B in income tax and $834.732B in employment taxes.
in 2006 the total revenue of all businesses in the usa was over $21.851 Trillion. total deductions were $19.688 Trillion. that produces an effective tax rate of 18.2% on net income.
in 2006 total income by individuals was $8.030 trillion, with adjusted income of $5.579 trillion. that produces an effective tax rate of 24.5% on adjusted income (not including the employment tax, which would make it even more skewed).
so no, I do not see businesses carrying their fair burden of taxes.
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Of course those individuals were less than 50% of the population...if I recall about 60% of that tax revenue comes from 10% of the people already.
It's great that you think businesses should be taxed more...but don't think that it's free, which you are inferring. Don't think that they will not:
- raise prices, cut workers, curtail expansion, move etc.