Why would someone on true welfare pay any tax? No earnings should mean no taxes to pay.

The argument against a flat tax was that the percentage would be such that the bottom bracket would actually end up having to pay more than they do now. But if a flat tax were to cover all business as well I believe we would pay very little in tax. I've quoted Warren Buffet before on here but he stated that if the top 450 corporations would pay the tax they should be paying then no American would have to pay any tax at all. A zero deduction flat tax, however, would radically alter the American economy. There would be no subisdies for R & D, investments, real estate, etc. But, true capitalism shouldn't include subsidies that artificially prop up businesses and industries any way. And it would kill the tax prep profession but save the tax payer billions via a drastically reduced IRS. Imagine a world where congress decides on the next years budget which then equates into the tax percentage all Americans must pay. A huge incentive to keep that budget within reason without pork or the voters will have your head. Very measurable to the voters if their percentage went from 10% to 12%. It would have to be an absolute zero deductions or else Congress would gradually throw in perks and morph it into what it is now. Of course it's all idealistic and will never happen.

"the top 450 corporations would pay the tax they should be paying then no American would have to pay any tax at all. "

Where do you think the corps would get the money?

1.Manufacture it?

2.Donations?

3. Mark up goods and services to the end user?


So you still end up with the poor paying disproportionate because the goods and services would be a higher % of their income than that of the rich. Secondly they have fewer options to avoid using these goods and services since they are trageted at the masses and the truely rich are about 1.6% of the population.

Ever hear of a wolf in sheeps clothing?

TK, as usual you make absolutely no sense.
We are talking about income tax here. Are you saying that without income tax breaks the prices of goods would rise? So? True competition without subsidies means goods are priced at what the market will bear. Nothing wrong with that. Where would a top 450 corp get the money to pay their taxes? Exactly where they get it from right now. But, due to loop holes, aka subsidies, in the tax code many currently pay no tax at all. You seem to be implying that corporations pay no tax because they are broke or something and I haven't a clue where you would get that idea.

Stlhd,

You quoted a Buffet conjecture that if the top 450 corps paid what they were supposed to pay we would have little tax burden as individuals. I merely pointed out that not only is that a fairly tale but an unbalnced fair tale on top of it when fleshed out for parctical use.

Please stay on your original point and back it up or Crawdad back and around like you normally do. Would the cost of goods and services not have to go up in order for he 450 corps to pay the majority of the US tax debt? yes or no? If so then take the fortune 500 and tell me who would most be inpacted by higher prices the rich or the poor. All Buffet did was shift the tax burden so the ignorant would jump on the band wagon and say " yeah those dam corps are ripping us off and Bush is helping them do it" . Well if you bite that hook it must mean you are one of them. BTW the Buffet practice what he preaches? Of course not even more reason for the libs to love him. Say one thing do another and blame someone else if you get called on it.

Once again you know nothing of what you spew forth. And I thought you were trying to play yourself out as a financial wiz lately.
Buffet brought that up because his companies pay an absolute fortune in taxes compared to what most corporations pay. He made the point that he is doing his share and he wishes all companies would also. And the quote was that we would pay no taxes at all not minimal. He is pointing out just how large a sum it is that is being withheld from Americas coffers. Would prices have to go up? No. You don't understand taxes and loopholes do you? Taxes are based on net earnings. Loopholes allow the hiding of earnings. Earn zero pay zero. Without loopholes in the tax code I will go on record saying that many large corporations would report a heck of a lot more in net income.

Brickhead,


A $ is a $ no matter how you cut it up. A corp has to have a minimum of 50% GP and kick 5% to 10% to the bottom line to stay in business. If you remove all the tax incentives and they pay more tax it affects profit and loss and ultimately the bottom line. They have to raise prices to keep the numbers whole in terms of GP and Bottom line contribution. There is no other way to do it. You are talking trillions of dollars being shifted out of the private sector into the treasurey from 450 companies. Only a blank idiot would assume that the corps would stay whole and the consumers as well. All Buffets idea does is shift the burden much like a sales tax any way you want to slice it.

I have stayed out of this financial discussion until now, I am reminded of the old quote, "Better to be thought an idiot, than to open your mouth and remove all doubt". However, The King makes an absolutely false statement when he says that Corporations must make a minimum of 50% Gross Profit. I have been involved with several Corporations, some in the Fortune 500 and none of them have a GP of 50%. The rain we had must have grown a new crop of 'shrooms out there in Fall City.

Eddie,


You can always find an exception but the rule is 50% gross GP on the sales of the goods ( does not always apply to services) on the gross sales side of the ledger. Some do not apply certain expenses at that time but recapture the expense eleswhere as to not reflect it in the GP. Usually for compensation reasons. It's possible but rare. Give example please. Now how does that minor point change the arguement? If 450 corps are to make up trillions in taxes so the avg citizen has almost no tax burden how would they do it and not increase prices to the consumer? As stlhd claims

50% gross profit required to stay in business?

Dans,

Yes if you buy a lure wholesale for a dollar you would have to have a GP of 50% or more on the sale of the lure to offset your expenses related to selling it. It really depends on the product but in general the smaller ticket items take a higher gp ( 300 to 400%) to offset. Where higher ticket items like cars etc. It would be lower. It can also be shifted internally which is most likely what Eddie expirienced. Cars for example the GP is lower on the car and the majority of the profit is on the Parts and services. yet when you look at the financials of the dealer you would see a 50% or greater gp for the sales.

I hope everyone's 'paying attention'.


:rolleyes:

My company has been doing business for 60 years on a 32-35% margin. The 50% mark may be true of a large corporation, though.

Whats the product? Service or goods?

I worked for a computer hardware manufacture for a few years after we sold the family business. We did $165 million with 32 employees. The GP was out of this world. The founder of the company was a janitor at MS the 3 years before. Someone wished they had a certain type of device in the server room he wass cleaning. He went to radio shack that night and bought some parts, built the device and brought it back the next day and they loved it. 3 years late he chased out his stock in a sale to a competitor at 50+ million. Crazy world sometimes.

Both.

Aircraft parts sales and service.

There is even better money in broads and booze...

We all gotta have something to aspire to, huh grandpa.

If you DO get some braods and booze lined up, 4S might want to talk to you.

Hell if 4s doesn't want some of that action, I sure will Grandpa. Once again, King I think you are absolutely wrong. You may be right on the small ticket items, your arguement makes sense. However, with big capital goods or services - 50% is an unheard of GP. Grandpa, what do you think - your company making 50% on sales?

We operate on the famous "bottom line"..If that is 5% we are heroes. The profit "margin" may start out high but in the end the net profit is what counts and allows for reinvestment in the business. Personally I never subscribed to the "gouging" theory...what is that anyway? If the consumer is happy with his or her purchase at a given price it is great if the merchant makes a decent profit. I can actually service my customers much better with a good profit. Too little profit breeds poor service and nickel and dime added costs. No one can operate a business for long at too low a profit margin. Accounting can manipulate things for only so long. Some businesses such as oil exploration and pharmaceuticals require immense start up and research costs that either have to be financed by capital or internal profits.

I was thinking about a Hooters franchise. Anyone know what the profit potential is there?

just kidding about the Hooters thing...Having three beautiful daughters keeps me from going to Hooters....I did tell one of my daughters once that she could get a job there...didn't go over too well.

I don't know where that 50% number comes from but there are no hard and fast rules. The only rules I am aware of are to stay listed on the exchange. You can still run de-listed however. Has nothing to do with taxes.