Last post on Mar 17, 2005 at 7:57 PM
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Alternative Fuels, Hybrid Cars, Fuel Efficiency (MPG), Truck, Sedan, SUV
#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.