Each April our thoughts rotate to the coming of spring and the
coming of the tax man.
I listen a lot of people complaining about taxes at this time
of year. Not equitable that they must do their taxes and
spend hours pouring over old records and trying to figure
out indecipherable forms, but also musings and opinions
about taxes in general.
I constantly hear the opinion expressed that businesses, property
landlords and "rich people" do not pay their fair share of
taxes. And I engage. I accede that they don't pay their
"just share" as defined in most people's minds. But I also
consider that in certain circumstances, these businesses and
people shouldn't must pay anyone taxes.
That may sound a bit radical for numerous people reading this,
but allow me to unravel my reasoning.
First,
Christian Louboutin Discount, why are we taxing affairs on their profits?
A business exists,
cheapest Louis Vuitton, if it is a sole proprietorship or a
large international corporation, to make a profit. People
create businesses and invest in stocks with the idea that
they will get a share of the profits. This namely the basis of
our system of capitalism. It is the motivation for a free
marketplace and personal ownership of property.
Why would anybody work to the difficulty of beginning a business
unless they anticipated a significant return on their
investment of money and period? Why would you perturb buying
stock in a corporation if the company not gave you any
dividends (yeah, stocks can appreciate, but bear with me)?
There comes a point while deciding where to invest your time
and money that you have to diagram out how many return you
need to make your exertion worthy. If you work at a job
and acquire $30,000 a year,
Herve Leger 2011, how much will your business must
make to replace your income? How much more do you want it
to make for taking the risk of quitting your job and
building a business?
If you can't make much more than the $30,000, it hardly
seems worth it to spend always the extra time and take the
surplus risk of starting the business. So let's mention that you
figure you can earn $50,000 with your business. And that is
enough to take the risk.
But now the government comes forward and tells you that you
must pay $7,000 in taxes on your $50,000 business profit.
Now you have a alternative. Live with less or increase your
business income. Living with less defeats the whole purpose
so let's look at increasing your business proceeds.
You can either increase your business income by getting more
clients, selling more goods or raising your prices. When
you are in a less competitive mart, raising your prices is
the easiest entity to do. So you heave your costs. Now you
are earning the $50,000 you wanted ahead of and
you have effectively passed your business taxes on to your
customers.
But no only are your customers paying a higher cost for
your product alternatively service merely they may too be disbursing more in
bargains taxes. They get a double-whammy. If your customers
are businesses, they will pass on their increased costs to
their buyers. This cycle continues until the cost of
every business' taxes are finally passed on to the
client - me and you.
Let's look at a specific and simpler example of how this
works. I know a person who owns some rental units. The
metropolis in which they are situated passed a tax on rental elements.
Some politicians and local activists were restless to punish
the "gouging owners" and "rental robber-barons". They
figured that they could activity Robin Hood and redistribute
some of the wealthy landlord's profits to the "poor".
Now my friend's costs have gone up. So what did he do?
Naturally,
Hogan shoes women, he raised the rents to cover the cost of the
annexed tax. And since it is easier to approve a
rational rent increase than apt shake, his tenants stayed
put and paid more.
Ironically, maximum of his tenants are the same people who the
politicians and activists think the "needy". So immediately the
government takes an extra $20 a month out of their pockets
through the "tax on the landlord".
If the tenant is on an alms agenda they may get some
of this money behind. Of lesson the quantity they get back will
be diluted at expenses and executive costs for the
government to gather, control and distribute the money.
So who actually paid for this tax? The landlord? No, in the
end it is always people - you and me.
All taxes are paid by the inhabitants themselves, regardless of
whether they are paid directly, as in sales and income
taxes, or via additional prices of products and services,
or through "fees" imposed by governing agencies. How does
your automobile registration "fee" different from a tax?
Not only does each citizen directly or indirectly pay every
cent of tax money that is collected in this country, but
most people's knowledge that the "rich" and "companies"
don't pay their "fair-share" is precise.
These people and businesses can afford to pay one attorney
$10,000 to show them how to save $500,000 in taxes. Most
promising, you can't. The tax laws are made with loopholes for
the "rich" and for certain businesses.
Part of this is for it is these people who own or
control a crowd of the property in this nation. And
no progress can be made with out a significant investment of
capital. If these people and businesses are given the right
reasons to invest their capital (such as tax wrecks) the
economic will persist to function and grow.
If they are overburdened with taxes they will either move to
Bermuda or start a cycle of inflation by raising prices.
Either access, you, Joe Citizen, will end up paying more either
directly in the manner of taxes or indirectly as your cost of
living increases.
It is a double-edged knife. Joe Citizen wants "rich people"
and businesses to pay their fair share (although Joe does not
realize that he ends up paying it anyhow) but the government
knows that they can't kill the golden goose (and the economy
needs a good "goose" every so often).
So tax decrees and regulations are passed which appear to target
the "rich people" and businesses but with enough loopholes
so that no real tax increase occurs. And the politicians
can blame the additional gathering as the loopholes. But both know
this is business consist in ....
Make Joe Citizen feel good about paying his taxes by raising
taxes on the "rich" and "wealthy corporations", but give
them loopholes so that little more is accomplished than
adding distinct volume joined to the tax code.
And Joe Citizen continues to pay his taxes every year.
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