▲ | AnthonyMouse 13 hours ago | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business expenses are tax deductions because business taxes are on profits and profits are calculated as revenue minus expenses. Taxing businesses on revenue rather than profits doesn't work because it would bankrupt every business with slim margins, which is most of them, while effectively cutting taxes for the ones with the thickest margins and creating a massive tax subsidy for vertical integration. > It falls under the fallacy that rich people can avoid investing their fortunes, inflation already makes that a nonstarter. If all someone cared about was avoiding inflation they could just buy a stack of precious metals. Moreover, the return from typical passive investments (e.g. S&P 500) significantly exceeds the rate of inflation. The preference for investment is as opposed to spending. If inflation is at 3% and someone is getting a 10% return from stocks, they can avoid real value loss while still spending up to 70% of the nominal profits. But we'd rather people build factories and develop new drugs and technologies than buy second private jets and third personal mansions. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
▲ | Retric 13 hours ago | parent [-] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
> Business expenses Investment isn’t a business expense. > If all someone cared about was avoiding inflation they could just buy a stack of precious metals. Capital gains of precious metals “yield” drops you below inflation. > But we'd rather people build factories and develop new drugs and technologies than buy second private jets and third personal mansions. Someone needs to do that for your hypothetical 10% S&P gains. Giving handouts to wealthy people hardly discourages them using a private jet, just the opposite. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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