Last post on Mar 17, 2005 at 7:57 PM
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Alternative Fuels, Hybrid Cars, Fuel Efficiency (MPG), Truck, Sedan, SUV
#170 of 178 Re: Is Toyota recovering the $1900 premium? [kernick]
Mar 16, 2005 (6:29 am)
Troy: So, Toyota says it costs $1900 per Prius for the hybridization.
Kernick: what does that mean, can you tell us specifically? Is it the parts? Is it parts and labor? Is it parts, labor, overhead, and design?
(shrug) Ask Toyota. Since they say "per car", I'm guessing they're just talking about the hardware, not R&D.
Mar 16, 2005 (6:37 am)
"That is not a "big" corporate loophole. Advertising costs are part of the cost of doing business, and can be written off by all companies, and rightfully so."
I can think of no logical reason why Corporations should use advertising as an EXCUSE to pay less taxes & screw the government. I don't get to write-off my expenses.
#172 of 178 Re: bull [electrictroy]
Mar 16, 2005 (10:41 am)
"I can think of no logical reason why Corporations should use advertising as an EXCUSE to pay less taxes & screw the government. I don't get to write-off my expenses."
Probably because you aren't operating a business, but are subsisting on wages.
As an example that a regular person can envision.
If you own a vacation cottage, and you rent it out when you're not using it, you may want to place an advertisement to rent it.
When it comes time to pay taxes, you don't pay taxes on all the rent you got, you pay taxes on the PROFIT.
PROFIT = INCOME - EXPENSES
The Advertising was an expense that was necessary for you to produce the income, so you subtract it from the income, and pay taxes on the remainder.
It's not an exuse, it's the way businesses work, whether it's one person with a rental cottage or a multi-national.
Mar 17, 2005 (6:57 am)
Ahhh yes, I see your point.
Still if companies like GM or Toyota are labeling their Hybrid R&D as "advertising", that's still wrong, and something should be done to eliminate that loophole. No wonder most corporations pay Zero taxes.
#174 of 178 Sarbanes-Oxley will eliminate the loophole! EOM
Mar 17, 2005 (8:36 am)
#175 of 178 Re: yep [electrictroy]
Mar 17, 2005 (9:56 am)
you: Still if companies like GM or Toyota are labeling their Hybrid R&D as "advertising", that's still wrong, and something should be done to eliminate that loophole.
me: It is not necessary to call R&D = advertising. R&D is an expense, and Advertising is an expense. All expenses are deducted from revenues, and if anything is left that's what gets taxed. These aren't "loopholes".
you: No wonder most corporations pay Zero taxes.
me: If a company has no profit they pay no income tax. The income tax rate for a company is typically 40%. But even if the company pays no income tax, they still have paid or generated considerable taxes. How you ask?
They must contribute 7% of wages to social security, they must pay Unemployment Insurance, they pay for health insurance which otherwise might be under Medicare, and they pay wages to employees who pay income taxes and social security.
So just by being in business a corporation such as GM or Toyota generate large amounts of revenue for the governements, and keeps down government spending, just by being in business, whether they pay income tax or not. Look at the big picture and not just 1 single point of an issue.
Mar 17, 2005 (12:13 pm)
The corporation doesn't pay SS Tax, or Healthcare. They simply compute your wage as $40 an hour, subtract those costs, and give you the remainder as $30/hr to your paycheck. YOU are paying those expenses, but you don't realize it, because it's hidden.
#177 of 178 Re: no, you pay [electrictroy]
Mar 17, 2005 (7:52 pm)
OT: Ask your employer how it works. Yes, you pay 7% or so from your paycheck, but your employer also has to match that, which doesn't come out of your paycheck. See: http://www.ssa.gov/pubs/10059.html
If you make $20/hr and work 40hr you get $800 gross. You'd have $56 taken out of your check. but your employer has to match that $56 and send it to SS.
And many people who work at mid-to-large size companies get health insurance (usually the employer will pay 80%).
Those SS, Medicare, health, 401K contributions, advertising, property tax ... are all expenses that get subtracted from revenues. They are all deductible, before profits are calculated. Believe me, I've just taken graduate classes in Accounting and Economics.
And I'm sure the system is very similar in Japan, as competition in different industries usually means that expenses are large compared to profits. A company may need to pull in $1,000,000 in revenue, have expenses of $950,000, to make $50,000 profit, and then get taxed 40% on that $50K, to net $30K.
#178 of 178 Re: no, you pay [kernick]
Mar 17, 2005 (7:57 pm)
OK - off-topic. Let's get back on track please.