Tax day in the USA..

[Brent & Kim]

Originally Posted by kathy.web

All I know is that I do not have enough deductions to itemize, have the max witholding taken out of my pay plus some, and write a check for a couple thousand at tax time. Not fair! Brent: I believe many big corps screw their fellow American any chance they get!!! I don't understand why you want to defend them.

Not defending...Just understand how it works.

[gingele]

Originally Posted by January Guy

It was not intended to be a question of "cash basis" taxpayer or not (although that will impact the answer), and it was not intended to be a question of what is the correct answer under the tax law.

I just want to know what you think is "fair"? Does it depend on the size of the business in your opinion? If so, why?

I don't really understand the point you are trying to make?

Most companies don't stick around very long if they continually provide services to clients year after year without ever collecting a dollar. So sooner rather than later, that income will be collected, and at that point the company should pay income tax. For example, in 2012 your hypothetical company could collect the $10K invoiced in 2011 plus an additional $10K in income for 2012.

If the figures were $10K or $10 million, what difference does it make?

[Rissask]

Originally Posted by D33RHUNT3R

Or we could just tax the hell out of them and then complain when the job gets outsourced... ..they close up shop move and pay in zip..

Why is it so hard to understand ...Charge EVIL Corps to much the either pass on the cost to the consumer or move oversea's ... So what do we get for sticking it to the so -called Evil Corporations ..Higher prices and or Job losses... you pick.. ...

sigh


Do you ever read posts before deciding what you THINK people said?

I will bold it bigger for you.

Originally Posted by Rissask

Only in America can the little guy defend big, rich corporations for getting billions in tax cuts and refunds, while his country is trillions in debt and getting deeper every day.


Fascinating and amazing.

There ARE corporations in other countries who DO make billions of profit, provide lots of employment, do a lot for their comunity, and ALSO PAY their fair share of taxes without hiding it, or finding loopholes to avoid what should be their civic duty, ya know. True story!

Surprising, what constitutes 'fair share' is actually LOWER in Canada than in the USA. Ours is 16.5%, yours is ....35%?? Wtf?

You guys aren't that capitalist after all.

Maybe they should lower it and reduce the loopholes and crack down on corporations who screw the gov't over instead.

Yes, our corporate tax rate is 16.5% and yours? 35%. Too high to be really business friendly, indeed.

So high it just encourages companies like GE and thousands more to screw you!

But by all means, defend them while they screw you.

[roni]

I used all my toes and all my fingers, and one other appendage and I can report that I cannot count that high

[January Guy]

Originally Posted by Rissask

Yes, our corporate tax rate is 16.5% and yours? 35%. Too high to be really business friendly, indeed.

So high it just encourages companies like GE and thousands more to screw you!

But by all means, defend them while they screw you.

Your corporate tax return is closer to 30% when considering provincial taxes, ours is in the high 30's. Up until recently, your rate was about 35% including provincial taxes. There certainly is more incentives for companies in the US to pursue aggressive tax strategies, but there also is a strong incentive to do so in Canada.

Would you please let me know what "loopholes" and "screwing" that the big companies are doing?

[January Guy]

Originally Posted by gingele

I don't really understand the point you are trying to make?

Most companies don't stick around very long if they continually provide services to clients year after year without ever collecting a dollar. So sooner rather than later, that income will be collected, and at that point the company should pay income tax. For example, in 2012 your hypothetical company could collect the $10K invoiced in 2011 plus an additional $10K in income for 2012.

If the figures were $10K or $10 million, what difference does it make?

As a company grows, the acceleration of income actually gets larger (because they will have billed but uncollection services at the end of 2011 that then may be treated differently).

[January Guy]

Originally Posted by January Guy

Here is an opinionated question (no correct answer as it is a policy issue):

Suppose that in the year 2011, a business purchases $10,000 worth of equipment and furnishings for cash and that it also provides $10,000 worth of services to clients. However, it does not receive any payments from its clients in 2011. To be "fair", its 2011 taxable income (loss) should be:

a. $10,000 income
b. 0
c. $10,000 loss

I'll provide the actual tax result(s) after a bit.

Originally Posted by gingele

If the figures were $10K or $10 million, what difference does it make?

A small business would get to claim a $10,000 loss as you mentioned above. A big company like GE would have to claim the $10,000 as income, but then only be able to deduct $1,429 of its expenditures.

So, a small business gets a $10,000 loss and GE hs to pick up $8,571 of income.

So, to answer your question immediately above, the bigger companies actually can get screwed by the tax rules.

[melliedee]

I think I claim 1. But I always forget which is best, 1 or 0? I like the one where my check is bigger.

[Rissask]

Originally Posted by January Guy

Your corporate tax return is closer to 30% when considering provincial taxes, ours is in the high 30's. Up until recently, your rate was about 35% including provincial taxes. There certainly is more incentives for companies in the US to pursue aggressive tax strategies, but there also is a strong incentive to do so in Canada.

Would you please let me know what "loopholes" and "screwing" that the big companies are doing?

I'd call this a loophole:

But what about the $10.8 billion profit overseas?

GE is "indefinitely" deferring income tax payments on those profits, Eisele said.
It may seem like accounting magic, but it's completely legit.

If a company is an American-based company and they make a profit, even if it's overseas (I guess that is called 'creative accounting'), I think it is unethical to not pay ANY taxes in their home country.


35% seems excessive. But jeez, wouldn't even 5% be nice? Naw, instead it was $0.

and I wouldn't assume they are squeaky clean.

And then there's all the lawyers needed to defend those returns. GE filed tax paperwork in more than 250 jurisdictions around the world last year. "We are under examination or engaged in tax litigation in many of these jurisdictions," the company dryly notes in its annual report.

GE: 7,000 tax returns, $0 U.S. tax bill - Apr. 16, 2010

[gingele]

Originally Posted by January Guy

A small business would get to claim a $10,000 loss as you mentioned above. A big company like GE would have to claim the $10,000 as income, but then only be able to deduct $1,429 of its expenditures.

So, a small business gets a $10,000 loss and GE hs to pick up $8,571 of income.

So, to answer your question immediately above, the bigger companies actually can get screwed by the tax rules.

Or, to put it another way, small businesses enjoy more favorable tax rules with regards to using their cash to grow their business.

It should also encourage the larger companies to make sure they collect.

I dunno, just not feeling the "unfairness" of it all right about now.

[Brent & Kim]

Originally Posted by Rissask

sigh


Do you ever read posts before deciding what you THINK people said?

I will bold it bigger for you.






Yes, our corporate tax rate is 16.5% and yours? 35%. Too high to be really business friendly, indeed.

So high it just encourages companies like GE and thousands more to screw you!

But by all means, defend them while they screw you.

So hot when you talk the truth...

[January Guy]

Originally Posted by gingele

Or, to put it another way, small businesses enjoy more favorable tax rules with regards to using their cash to grow their business.

It should also encourage the larger companies to make sure they collect.

I dunno, just not feeling the "unfairness" of it all right about now.

So, if GE gets favorable treatment in order to create jobs, they are screwing the government, but if a small business gets favorable treatment, they are simply growing their business?

[Rissask]

Originally Posted by Brent & Kim

So hot when you talk the truth...

well, 35% IS too damn high. Highest in the G7 countries, you are.

Ours is not as high, but as JG pointed out, they are also taxed additionally by some provinces....but he was wrong to say it's higher....the two highest provinces are 34%.

BUT the lowest is around 10%, in about 3 provinces, and I think a couple even did away with it entirely. So the provinces with the most business are at about 26.5% or less.


And you guys have state taxes too, right JG? SO that would be higher than 35%?

You do have to be business friendly in a global economy or they will just head to Mexico.

[January Guy]

Originally Posted by Rissask

I'd call this a loophole:







If a company is an American-based company and they make a profit, even if it's overseas (I guess that is called 'creative accounting'), I think it is unethical to not pay ANY taxes in their home country.


35% seems excessive. But jeez, wouldn't even 5% be nice? Naw, instead it was $0.

and I wouldn't assume they are squeaky clean.




GE: 7,000 tax returns, $0 U.S. tax bill - Apr. 16, 2010

Without a doubt, there is some creative accounting. No argument from me there. But all businesses do it, and many small businesses do it on a much grander scale than GE. So, why do we scream at GE? I guess because they are big.

Regarding their $10B of income overseas, I obviously don't know their specific situation, but most of that is not creative accounting for more companies. It is just that they expanded internationally with production facilities and distribution centers and are earning legitimate profit overseas.

Unethical? That is an interesting point. I do question whether there should be some sort of minimum tax (some states have that). On the flip side, GE creates tons of jobs in the US and generates so much tax revenue (individual income tax revenue and social security).

Regarding that point in their annual report, the vast majority of companies will have that point. A large chunk of individuals who file individual tax returns (who have to itemize) would also have to have that point if they were subject to our SEC regulations.

[Brent & Kim]

Originally Posted by Rissask

well, 35% IS too damn high. Highest in the G7 countries, you are.

Ours is not as high, but as JG pointed out, they are also taxed additionally by some provinces....but he was wrong to say it's higher....the two highest provinces are 34%.

BUT the lowest is around 10%, in about 3 provinces, and I think a couple even did away with it entirely. So the provinces with the most business are at about 26.5% or less.


And you guys have state taxes too, right JG? SO that would be higher than 35%?

You do have to be business friendly in a global economy or they will just head to Mexico.

GM builds motors in Mexico and Canada...you tell me.