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Just a couple of off-the-wall questions (1 Viewer)

BrianW

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Okay, so corporations don't pay taxes, because the money they get to pay their taxes comes from us. Check. But the money we get to pay corporations' taxes comes from our salaries, which are paid by corporations! And that money comes from us when we buy their products. So NOBODY pays for ANYTHING!

Actually, this brings up a point I personally find very interesting: How does basic economics even work? As long as nobody is actually printing money, we ALL get our money from somewhere/someone else. How is it possible for corporations to pay their workers enough money to buy their products and still make a profit while providing a living wage to their employees? I freely admit that I don’t know the first thing about economics, but to me, this just seems like a blatant violation of all the laws of Thermodynamics!.
 

Patrick Sun

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Supply and demand yields a price point which people will pay for an item.

It's up to a company to come up with production means to build into the price of the item (in bulk) so that they can meet the overhead (labor and associated costs for building facilities, etc) plus material cost in producing the items. As long as the item's per unit cost is less than the per unit price (on the wholesale level), you'll make a profit, and as long as you can meet demand quantities, you'll be able to make payroll and pay for raw materials and overhead to "keep the lights on".

This a gross simplification of economics.

You should take a basis economics course because it'll be helpful in understanding issues that affect our economy (local and national).
 

RobertR

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How does basic economics even work? As long as nobody is actually printing money, we ALL get our money from somewhere/someone else. How is it possible for corporations to pay their workers enough money to buy their products and still make a profit while providing a living wage to their employees? I freely admit that I don’t know the first thing about economics, but to me, this just seems like a blatant violation of all the laws of Thermodynamics!.
Fundamentally, wealth is the result of accumulation of capital. It has nothing to do with "money" as such (money is just a medium of exchange). For example, imagine Tom Hanks' character on that desert island with a million dollars in a suitcase. Is he wealthy? No, because he can't DO anything with it (it isn't useful capital). We desire "money" in ordinary circumstances because we know that there are goods and services already waiting for us that we can buy.

So the goal is to produce goods and services, not "money". The more productive we are at doing so, the wealthier we are. Companies pay their employees for their ability to produce. Consumers pay companies for the goods and services they produce. It doesn't really violate thermodynamics, any more than a beaver does so when he builds a dam.

Not everyone gets paid by the same source. You buy your toothpaste from the toothpaste company, even though you work for the tire company. All that's needed is for you to be productive enough to produce a good or service such that you can buy other goods and services. Simple really. :)
 
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Sales taxes tax items you buy. No matter how wealthy you are, there is only so much "stuff" you can buy, and no matter how poor you are, there are things you have to buy, such as clothing, transporation, gas. So, on average, the higher your income, the lower the percentage of it you spend on sales taxes.

Income taxes vary only by your income. Further, tax brackets insure that you only pay higher taxes on amounts you make over a given bracket, so that if you cross a bracket line from one year to the next, you only pay the higher tax for that bracket on the amount you make over the bracket. On the amount under that bracket, you pay the same tax you paid the year before. The idea of graduated income taxes is that when you make more, you must be benefitting more, on average, from the government services we all pay for, so your tax on income in higher brackets goes up.

Guess which taxes rich people support and which taxes they oppose. I've never heard any arguments for sales taxes or against income taxes (or corporate profit taxes) that hasn't reflected that basic wealthy self-interest because they are the only ones that benefit when sales taxes go up and income taxes go down.

Ultimately, the point of taxes is to pay for services that benefit you economically (roads, police, fire, armed services, etc.). Exactly how do corporations not benefit from these things that they shouldn't pay taxes to support them?

-Robert
 

KyleS

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Maybe someone can explain this than. If Corporate tax went away would the cost of a product eventually go down.
Costs would go down but the business would either pocket the rest of the profits or use that extra income to streamline processes or hire more employees.

All business if its successful will work in regards to passing on the costs. Its really a simply way to think about it, its called the cost of doing business. If electrical, minimum wage, goods cost, anything goes up for a business they will compensate and raise the prices for customers. This means that they are guaranteed to make money assuming they have a market and customers keep purchasing goods from them.

That's why when people always bitch and want corporations taxed more that it simply doesn't make sense if they understood how business actually works and that in the end they would be paying the increase in tax. Take Cigarettes for example do you think the companies are "Actually" paying a dime of that settlement? Heck no the people who continue to smoke are, and that is one of the reasons they are paying a considerable amount more for the same product years later. The companies just recoup the costs through their customers.

Tax breaks for companies are a good idea considering it will lead to the company saving money which will lead to the companies hiring more employees, cutting costs, etc with the money they are saving.

KyleS
 

Hunter P

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Semantics. Love it.

Gotta go with Roger. Doesn't matter where the corps got the money. The direct monetary transaction is from corp to govt.

But then again, we could argue that taxes are paid by corps who get the money to pay the taxes from the consumer. The consumer gets their money from their corps in the form of salaries. The consumer's corps get the money to pay the salaries from their consumers. And on and on. Chicken or the egg.
 

Bill Catherall

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All of you are WRONG! Ha!

Nobody pays taxes. The government TAKES taxes. I dare you to try to prove me wrong. ;)

(And lest any mods misunderstand me, I don't say that in any political way. It's just the facts of taxes.)

Regarding the economy and printing money: The economomy can still continue and never print any money at all. I get paid and buy things, yet only about $200 of cash ever pass through my hands in a year's time. With electronic deposits, debit cards, and checks I just don't ever use cash. Most money exists only as electrons.
 

Keith Mickunas

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Bill, first off, you pay taxes. If the government took your money, that'd mean they were reaching into your bank accounts and withdrawing it. I don't think anybody would stand for that. Also, according to my boss, paying income taxes out of your paychecks is voluntary. You have to pay the government money, but they don't require it to come out of your paycheck. If you don't have the money taken out, and you don't pay them, you'll get into a lot of trouble, and eventually they'll start taking money from you. But up until that point its up to you to make sure they're paid.
 

KyleS

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Companies do not pay taxes, what companies do is Collect taxes for the government. How about that? ;)

That is why when corporations go out of business, or are put out of business, that people get pinched by the States who no longer have that income. Take Oregon for example our state has a huge hole in the economy and a good portion is due to the loss of our Timber industry. Unfortunately the government got so used to the tax dollars that they collected and now it isnt there (or at least a huge percentage smaller). Add in the loss of the states PERS (Public Employee Retirement System) where they were Guaranteed AT LEAST an 8% return and where in some cases the state would match 100% up to 6% of their income. With the stock market crash the PERS system in Oregon lost an estimated 100 billion and the state has to repay every dime. Man I wish I had a 401K that would guarantee me ANYTHING.

KyleS
 

Carl Johnson

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I'm no accountant but I think your boss is wrong. I remember reading somewhere that if your payroll deduction wasn't a high enough percentage of taxes due there was a penalty to be paid. Otherwise what's to prevent people from skipping pay period tax deduction and having that money directly deposited into an interest bearing account from which an annual check could be written to the government? I know I'd do it.....
 

Christ Reynolds

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Nobody pays taxes. The government TAKES taxes
if you are going to rip off chris rock's material, you could at least be the member of the htf who shares his name, i think that would make it less bad. kidding of course, maybe you never heard that bit, but you and he are right. "you dont pay taxes, they take taxes. you get your check...money gone"

CJ
 

Keith Mickunas

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Carl, you are correct that you could end up with penalties, but that doesn't mean it has to come from your paycheck. If they don't take out enough, for instance if you claim to many exemptions, you have to make payments by January 31st of the next year to prevent having to pay a penalty.

My boss could be wrong, he's got some screwed up ideas about some things, but he's typically pretty careful when it comes to the government. I should also point out we're a real small business. It consists of 13 employees in one office, and that's it. Its possible that the tax laws are different for smaller companies.
 

Bill Griffith

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Companies do not pay taxes, what companies do is Collect taxes for the government. How about that?
This I could agree with.

People that are employed pay taxes only once a year. The rest of the time Money is being withheld from your paycheck for tax purposes. You can choose to have a variable amount withheld. Say you wnat the max withheld, unless your making money elsewhere you'll probably get a refund once a year. If you have the minimum withheld You'll most likely have to pay extra money once a year, unless you can take alot of deductions (IE, dependents, house mortgage interest, stock market losses, student loans, etc...)
 

Bill Catherall

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People that are employed pay taxes only once a year.
Actually, once a year I have to prove to the government that they took too much and need to give me back some of it. I'd claim more exemptions so they don't take so much, but I already claim 6 and I hesitate to claim more. If claiming one more means I end up paying $400 in April instead of getting back $1000, I'd rather they held on to the $1000 because I know I wouldn't have the $400 to pay.
 

BrianW

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Brian
If claiming one more means I end up paying $400 in April instead of getting back $1000, I'd rather they held on to the $1000 because I know I wouldn't have the $400 to pay.
Bingo! This is often why it's better to get money back than it is to owe, and setting your witholding accordingly doesn't necessarily make anyone a bad financial planner.

Wait a sec... Is this the "Corporate Tax" thread or the "Excited About Tax Refund" thread?
 

Carl Johnson

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So his position is that payroll deductions are optional considering you can pay a penalty? That's like saying grand theft auto is a form of transoportation assuming you're willing to do time.
 

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