Miscellaneous And Off Topic Subjects

[THE_WIZARD_]

That hack guy is waaaaaaay high tech...

[Kapture1]

[THE_WIZARD_]

HEH!!!!!!!!!!!!!!

[hack]

Would you like me to send you a picture of my unit?

(Wiz that question was not directed at you, and you know the answer anyways from those other times you asked)

[THE_WIZARD_]

EFZ

[Kapture1]

Would you like me to send you a picture of my unit?

(Wiz that question was not directed at you, and you know the answer anyways from those other times you asked)

make, model, year, number of copies printed.
I will compare with the one we are likely biting the bullet on.

[THE_WIZARD_]

Would you like me to send you a picture of my unit?

(Wiz that question was not directed at you, and you know the answer anyways from those other times you asked)

...well your wife told me your unit wasn't worth a buck and a quarter...so thanks...

[THE_WIZARD_]

Kapture...I was able to get a photo of hack's "unit"...caveat emptor my friend...

[hack]

'73 Canadian. Trimmed shortly after manufacturing, and properly maintained since. No blemishes or scratches. Used twice.

[Da Geezer]

Targeting small business rather than corporations (I believe) is the way to go in corporate tax reform. Lets call it trickle up theory. Strong small business generates capital that consumers can use to purchase product made by mega-corps.

true. Small business creates 64% of all new jobs. The tax-plan outline taxes small business at 25% and large business at 20%.

entropy:

If the law allowed you to deduct based upon some sort of pay relative to peers (tough to enforce/track/etc.. I know..) I'd be in agreement. I'm not as positive as you are corporations would invest in R&D or employees with the new cash.

and yes, I know.. I've often said I'm for reducing the complexities of taxes and reducing deductions, so.. I'm being inconsistent here. I got it.

You know, I agree with your doubt as to how the tax reduction will be used by various businesses. But one thing I know for certain is that the more caveats you place in the tax code, the more accountants will find ways around them. My experience over many years is that the folks looking for ways to minimize tax liability are simply more focused and more intelligent than those from the IRS. They will figure a way around code changes like you propose. Also, keep in mind that money paid as dividends by large companies is itself taxed again at the individual's marginal tax rate. If that rate is 25%, then the total tax on a "tax break to corporations" is far larger.

For example, say a C-corp makes $ 100,000 gross. Under the proposed tax reform, it pays $ 20,000 FIT rather than $ 35,000. Let's then say it pays all of the $ 80,000 remaining after FIT to its one shareholder. At 25%, that shareholder, the sole owner of the company, is taxed at 25% or anther $ 20,000. Any way you cut it, assuming that the company makes no investment in capital or labor, the $ 100,000 ultimately results in $ 40,000 being paid to the government, and the remaining $ 60,000 is now in the hands of the owner of the company.

Now, suppose the $ 80,000 money left after the corporate tax of $ 20,000 is invested in employees or capital, that is "currently expensed" under the plan. If the gross the next year is again $ 100,000, $ 80,000 is now deductible, taxable income is $ 20,000 and at 20% that is a FIT of $ 4,000, leaving $ 96,000 after tax. After two years, the owner of the company has invested $ 80,000 in labor and capital and has $ 96,000 in the till.

After the second year, assuming everything paid in dividends, the owner has $ 120,000 cash.

It just seems to me that a rational owner would keep reinvesting a substantial amount in the business. That reinvestment causes the value of the enterprise to rise, and ultimately this brings in the death tax. But the key point is that the businesses have a financial incentive to reinvest as opposed to paying dividends.

[THE_WIZARD_]

Taxes and overzealous regulatory costs are killing many small business owners I personally know...tax cuts like this could save many of them....and allow some to expand like they need to in order to compete against larger competitors in their areas. Needs to happen soon.

[Ghengis Jon]

...The tax-plan outline taxes small business at 25% and large business at 20%....

Let's swap that around to 20% small biz and 25% for large.

[THE_WIZARD_]

no

[Kapture1]

Let's swap that around to 20% small biz and 25% for large.

I'm on board.

[entropy]

Geezer... don't disagree. Like I said, it would be tough to manage and therefore inferred not reasonable to do. The point was a corp tax cut won't achieve the objectives. You have to find a way to incentivize and I think leveraging a simply deduction is better approach.

That said if it is complicated your comments on finding holes will apply.


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