PDA

View Full Version : Income tax is a profit tax



Donald
05-03-2014, 10:20 AM
I've studied the word "income" for a while, and it is becoming more clear that 'income tax' is a profit tax.

Burton's Legal Thesaurus:
Profits-> income.

The question remains...why are employees that labor for a living, paying the income (profit) tax?

State and Federal income tax is a State and Federal profit tax.... the tax is profit for the State and Federal Government.

Wozcreative
05-03-2014, 12:25 PM
Because a % of it needs to go to your community, guv, country, otherwise you don't get to "profit" from all the nice roads, the healthcare etc. If you don't want to pay income tax, you can go live in the bushes.

Donald
05-03-2014, 01:07 PM
Because a % of it needs to go to your community, guv, country, otherwise you don't get to "profit" from all the nice roads, the healthcare etc. If you don't want to pay income tax, you can go live in the bushes.

Woz, you will need to update your understanding. Your argument is a typical one.

If I have to labor for a living, how am I Profiting?

If the Local Government needs to collect income (profit) tax to collect and pay for the labor of road workers/police/firemen/teachers etc...
what exactly is the income tax paying for when they collect it from teachers,firemen police and so on...?

Another example....Homeowners have been led to believe they need to pay "property tax" to pay for police, teachers etc...
But have you thought about this:
When property tax is collected from teachers, firemen etc....who's labor do they need to collect it to pay for??

Income tax is a profit tax.

Financial institutions and Businesses pay the income/profit tax because that is what they receive.
But Laborers do not receive profits to pay the income/profit tax, so they must labor to 'create' the funds before they can pay it.
This creates slave labor.

An income/profit tax should not be collected 'directly' from employees labor.
It should be collected from Businesses or from those that are just "receiving".

Receiving value is not the same as 'creating' value.

Businesses/Companies are receiving value,
Employees/Workers are creating value.
There should be a tax on "value received" but not on 'value created'.
Just receiving checks already with value is far different than an employee having to go to work to 'create' their paycheck.

A Laborer's paycheck does not pre exist with value the way income/profits do.
By lumping the meanings together is allowing the local Government agencies to profit 'directly' from employees labor.

Can you show me any law that allows any Government agency (or anyone) to 'directly' profit from someones labor?

As I understand, this is not only illegal, but is also unlawful.
Any employer or Business owner forcing the income (profit) tax on its employees using fear,.... should consider investigating what exactly income tax truly is.

Fulcrum
05-03-2014, 01:59 PM
I think you need to rethink things a little bit. Employees in companies are trading their time and skills (the job) for profit (their wage). Just because they don't have an ownership stake doesn't mean that they are not turning a profit.



Any employer or Business owner forcing the income (profit) tax on its employees using fear,.... should consider investigating what exactly income tax truly is.

I don't follow your logic with this. Businesses are required to "personal income tax" from their employees pay every pay period. I don't know about remittance in the US, but in Canada we are required to pay the withheld tax monthly. If I didn't have to do this, I wouldn't.



An income/profit tax should not be collected 'directly' from employees labor.
It should be collected from Businesses or from those that are just "receiving".

So, what you're telling us then, is that we, as employers, should pay the income tax that is owed by our employees on behalf of our employees - out of our own pocket? Are you trying to kill off all businesses in existence (outside of the single person operation)? Corporation owners are already subject to a double tax - income to the business itself as well as tax upon disbursement of retained earnings to the owner of the shares.

How about those on government assistance and welfare? They are receiving money for not having a job. They should pay more of their, already meager, income back to the government (maybe those who use the system for their life style, but not those who truly need it and cannot work)?



The question remains...why are employees that labor for a living, paying the income (profit) tax?
Are you coming to the conclusion then that business owners do not labor for their profit? I average 60-70 hours a week working in my company, took home less free cash than my employee, and paid more in tax and other deductions than he did.

Donald, you really need to rethink your position on all this. Stop listening to what the media is preaching and start paying attention to what they are not saying.

Paul
05-03-2014, 02:33 PM
I believe all of us on here understand the basics of the economy, paying for goods and services, employment and business. Your references to "labor" and "profit' "value" etc sounds like a confused version of a Marxist theory.

it's simple, "labor" results in "goods and services". It is the goods and services that people pay for. If you provide the service directly to a customer or through an employer you get compensated.

An employer earns income by providing goods and services. Individuals earn income by working for the employer or by providing the service or goods directly to the customer. In any case income is income, no matter how you happen to get it. As Woz said we all pay taxes to support the goods and services that the government provides.

What makes you think a "laborer" shouldn't pay taxes? Everybody labors in some way. It's not just factory workers and construction people. Web designers labor at the computer, lawyers labor over contracts and in court, doctors labor over patients, business people labor, sales people labor, executives labor...everyone labors unless you live off a trust fund or investments. Even at that investors labor to be on top of their investments. So, who among us is not a laborer?

I know your argument. Somehow companies/corporations take advantage of workers...companies have no value without the workers...etc etc. I believe Marx refered to them as "landlords" in his mainfesto. He said the business belongs to the workers, not the "landlords" with no regard for the investment, work and risk associated with owing a business. I say to Marx...get all the workers gathered around an empty field and wait for the magic factory to pop up without an investor. Then see how long it lasts without profits.

Wozcreative
05-03-2014, 02:37 PM
I believe here in Ontario Canada (correct me if I'm wrong—not an accountant), you pay taxes when you make over $30,000. That's "profit" right there. Otherwise the guv returns those taxes to you at the end of the year (but keeps your CPP, EI until you need it).

In all honesty, I pay taxes up the wazoo... (personal and business taxes), however a family member of mine is on disability and although it only 2/3 of what she needs monthly (I pay the rest, and the guv gives me a discount on taxes because I help out). Point being, if I moved somewhere where the taxes were lower (or non existent), I'd be stuck with having to care fully for my family member. Atleast the guv can pay now for the emergencies, psychologies, councillors, family doctors, specialists, surgeries, medication (which used to cost me $400/m before she went on dissability), special diet, money for transportation (buses) etc. I'm only left with paying for 1/2 the rent and additional non-covered medical expenses (which I can claim at the end of the year) and additional food. I'm thankful that there is atleast that help that I get and I totally "see" where that money I pay in taxes goes to.

Wether you are paying taxes, or a company pays taxes for you (and pays you less to cover those costs), it's the same thing. You are atleast seeing how much of the money you are making goes into helping out your community.

Can you imagine if we have another crisis and businesses start shutting down? Who will pay for the paving of our roads? Are we also going to trust only businesses who scam to pay their taxes?

Donald
05-03-2014, 08:01 PM
I think you need to rethink things a little bit. Employees in companies are trading their time and skills (the job) for profit (their wage). Just because they don't have an ownership stake doesn't mean that they are not turning a profit.



I don't follow your logic with this. Businesses are required to "personal income tax" from their employees pay every pay period. I don't know about remittance in the US, but in Canada we are required to pay the withheld tax monthly. If I didn't have to do this, I wouldn't.



So, what you're telling us then, is that we, as employers, should pay the income tax that is owed by our employees on behalf of our employees - out of our own pocket? Are you trying to kill off all businesses in existence (outside of the single person operation)? Corporation owners are already subject to a double tax - income to the business itself as well as tax upon disbursement of retained earnings to the owner of the shares.

How about those on government assistance and welfare? They are receiving money for not having a job. They should pay more of their, already meager, income back to the government (maybe those who use the system for their life style, but not those who truly need it and cannot work)?


Are you coming to the conclusion then that business owners do not labor for their profit? I average 60-70 hours a week working in my company, took home less free cash than my employee, and paid more in tax and other deductions than he did.

Donald, you really need to rethink your position on all this. Stop listening to what the media is preaching and start paying attention to what they are not saying.

I do not listen to the media, I study this on my own, using a legal Dictionary.

"Employers earn income by providing goods and Services"...I agree with this statement, however, concerning the employees...the employees are providing the labor for those goods and Services.
It amazed me how quick you were to dismiss employees labor having/creating value.

Who do you think 'creates' the value resulting in profits for the Company??

Companies hire employees to work and create value for the Company, resulting in profits.

The Company keeps a portion of what the employees create... it is the employees paying the Company, not the other way around!
It is the Company receiving value...value employees create using their labor.

The Company receives value, therefore, the company receives income (profits).

The employees do not receive income because employees paycheck does not pre exist .
Through laboring, value is being created, resulting in the employees paycheck.

Fulcrum
05-03-2014, 09:34 PM
I do not listen to the media, I study this on my own, using a legal Dictionary.

"Employers earn income by providing goods and Services"...I agree with this statement, however, concerning the employees...the employees are providing the labor for those goods and Services.
It amazed me how quick you were to dismiss employees labor having/creating value.

Who do you think 'creates' the value resulting in profits for the Company??

Companies hire employees to work and create value for the Company, resulting in profits.

The Company keeps a portion of what the employees create... it is the employees paying the Company, not the other way around!
It is the Company receiving value...value employees create using their labor.

The Company receives value, therefore, the company receives income (profits).

The employees do not receive income because employees paycheck does not pre exist .
Through laboring, value is being created, resulting in the employees paycheck.

I don't think anyone has dismissed the value a quality employee brings to any organization. On the other hand, you appear to be ignoring the fact that the business owner has provided the means for the employee to produce said value. We supply the equipment, workspace, training, worker's compensation in case of injury and funding, as well as taking on all the risk associated with running a successful business. A small business owner can no longer use the corporate structure to try and avoid paying back obligations (debt, taxes, leases, etc.) if the business fails.

I don't understand where you are coming from when you say the employee's paycheck doesn't exist. Should I pay employees for work they may, or may not, perform before they actually perform the work? If I have an employee come in for a day when there is no work to be performed, I still have to pay him for the hours that he is "at work" even though he did nothing but make puppies all day.

On a side note, you need to be able to differentiate between income and profit. They are not the same thing. A business cannot profit without income, but even when there is income a business may not profit. Just because I may have had $100,000 of income, it does not mean that I have profited $100,000. There is a good chance that I may have had $200,000 in operating costs that year but chose to loose only $100K by taking on what I could to help alleviate said loss.

Tin foil hat time:

I want you to go out and research people and companies that have tried to do as you suggest. Give us successful case studies where a person or business has proven their right not to pay taxes.

Donald
05-03-2014, 11:01 PM
I don't think anyone has dismissed the value a quality employee brings to any organization. On the other hand, you appear to be ignoring the fact that the business owner has provided the means for the employee to produce said value. We supply the equipment, workspace, training, worker's compensation in case of injury and funding, as well as taking on all the risk associated with running a successful business. A small business owner can no longer use the corporate structure to try and avoid paying back obligations (debt, taxes, leases, etc.) if the business fails.

I don't understand where you are coming from when you say the employee's paycheck doesn't exist. Should I pay employees for work they may, or may not, perform before they actually perform the work? If I have an employee come in for a day when there is no work to be performed, I still have to pay him for the hours that he is "at work" even though he did nothing but make puppies all day.

On a side note, you need to be able to differentiate between income and profit. They are not the same thing. A business cannot profit without income, but even when there is income a business may not profit. Just because I may have had $100,000 of income, it does not mean that I have profited $100,000. There is a good chance that I may have had $200,000 in operating costs that year but chose to loose only $100K by taking on what I could to help alleviate said loss.

Tin foil hat time:

I want you to go out and research people and companies that have tried to do as you suggest. Give us successful case studies where a person or business has proven their right not to pay taxes.

I said employees paycheck does not "pre exist", meaning....it does not exist until the employee works to create it, that is one reason why the employees paycheck is not income.

Income is checks just coming in already with value without any direct physical or mental energy involved.

Examples:
LandLord's rent collection is '"coming in" for the Land Lord, but the tenant has to go to work to 'create' his paycheck before he can pay the Land Lord.

It is income for the Land Lord, but not income for the tenant (depending on tenants job of course)
Lottery winnings coming in would be income.

Paid vacation would be income, and so on ....

Can you give more detail concerning a Small Business and the corporate structure? I'm trying to understand the Corporate part a little more.

Paul
05-04-2014, 11:59 AM
I said employees paycheck does not "pre exist", meaning....it does not exist until the employee works to create it, that is one reason why the employees paycheck is not income.

Income is checks just coming in already with value without any direct physical or mental energy involved.

Examples:
LandLord's rent collection is '"coming in" for the Land Lord, but the tenant has to go to work to 'create' his paycheck before he can pay the Land Lord.

It is income for the Land Lord, but not income for the tenant (depending on tenants job of course)
Lottery winnings coming in would be income.

Paid vacation would be income, and so on ....

Can you give more detail concerning a Small Business and the corporate structure? I'm trying to understand the Corporate part a little more.

I think maybe this is where your over analysis and parsing of terms is confusing you. In your example of a landlord and a tennent you are assuming the landlord just magically collects rents. You don't consider that the landlord had to purchase the building with money that he earned from his "labor". The landlord also has to maintain the building, the property, comply with regulations, pay taxes, keep the books, make sure oil burners and other equipment is operating. This is all work, labor as you put it. You say the tenent has to create his paycheck to pay the landlord. Well..the landlord has to create his paycheck also by providing and maintaining the property. Landlords usually are paying off large mortgage loans and end up with very small percentage of the actual rent roll. That is his "creation" of his income. Basically he is payed a small percentage for providing the service to the tenents.

In response to your question about small business and corporations you are probably a little confused by the large size of some corporations and the "mantra" of corporate greed. You as a handy man can start a company, a corpporation. Once you hire a helper YOU are the greedy corporation taking advantage of workers. But think, if you worked for years on your own developing a reputation and customers that resulted in you needing employees don't you deserve to benefit from that? You created and maintain the circumstance that provides a job for someone. So if you charge
$ 50 and hour for handy man services and you pay your employee $ 40 an hour are you are you receiving $ 10 "income" for nothing?

Large corporations are no different. They have built up a business that needs employees. The company developed the circumstances for those jobs. Does the company not deserve to benefit from what it has developed?

Don't let the largess of some corporations muddy the basic concept.