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Originally Posted by nofnway
Sorry to butt in this way but in this example you would end up paying $4500 in taxes as the 170,000 is a cost of doing business (expense) not a deduction...Sales-cost of goods sold-other expenses=income blah blah blah
A flat tax would not change that
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Cost of doing business is a tax deduction off your income.
Are we talking no-deductions or not?
Ok, lets deduct the cost of gaining your income. From everyone. From the McDonalds employee who has to take a bus to work, to the lawyer who needs to buy a suit, to the wage-slave who spends 80% of her gas mileage on commuting.
You need to eat to work. If you spend 1/3 of your life at work, 1/3 of your food budget should be deductable.
You need to travel to and from work. Cars are mostly used for commuting. Cars and gas thus should be deductable from a salary.
You need clothes for work. If 70% of the time you are wearing a piece of clothing is at, going to, or coming from work, it should be 70% deductable.
Stess from work increases your medical bills. Hard to calculate, but it is a cost of working.
Commute time is an unreimbursed cost of working.
Child care can be required for work.
Working in a city means you have to trade off between location and travel time. So, higher housing prices near the city core should be somewhat deductable.
So, do we deduct the costs of working, or not?