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audioguru · 03-21-2011, 12:24 AM

Most of us know that there is a political philosophy regarding tax exemptions to wealthy corporations magically getting back into the economy.

Those weakly making that argument could find a way to argue the facts I am going to talk about, but it would be a lot of gobbledygook that has no relation.

The fact of the matter is that generally smaller closely held corporations don't claim much in the way of profits. A company can be doing fantastic and it simply bumps the salaries and compensation to it's owners and management.

If a corporation is posting a substantial profit after all expenses and investments have been used as write offs against the profits taxes are going to stimulate the desire for that corporation to invest more money into equipment and research and development which means more employees. If I'm looking at a tax against a hundred million dollars of thirty million I'm going to look at what things I could invest in for the company rather than paying taxes.

Give this company an exemption on thirty million dollars that should be paid in taxes and you have just taken away all reasons and incentive to invest a lot of money in that business that is fantastic for it's future revenues.

I don't know the wealthy person that does anything differently with tax exemptions they should be paying except put more in the bank, right now that's buying up foreclosed real estate. The wealthy people I know take advantage of so many loopholes that they don't pay any taxes at all. One friend buys two new Mercedes a year, of course they are largely business write offs. He does my taxes and is always recommending tax exemptions that are too much like evasions for our comfort.

Here's an example, and I will get the tax code number if anyone wants to really look at the wording. We are going to owe about $50k in taxes for the 2010 year. His suggestion is that we pay someone he will provide that has set up multiple businesses that were designed to post substantial losses. The losses exceed the write offs needed by that business and are excess, so this clause allows another person to buy the losses of that corporation so as to offset the need for more write offs to eliminate a tax obligation at all.

So... instead of us having to pay IRS $50k, we only pay $25k to this guy who is ripping off our government in multiple ways.

It's in the tax code and my wife and I read it thoroughly. We are going to pass on this one.

03-21-2011, 12:24 AM	#1 (permalink)
audioguru Upright	Realities Of Tax Exemptions Most of us know that there is a political philosophy regarding tax exemptions to wealthy corporations magically getting back into the economy. Those weakly making that argument could find a way to argue the facts I am going to talk about, but it would be a lot of gobbledygook that has no relation. The fact of the matter is that generally smaller closely held corporations don't claim much in the way of profits. A company can be doing fantastic and it simply bumps the salaries and compensation to it's owners and management. If a corporation is posting a substantial profit after all expenses and investments have been used as write offs against the profits taxes are going to stimulate the desire for that corporation to invest more money into equipment and research and development which means more employees. If I'm looking at a tax against a hundred million dollars of thirty million I'm going to look at what things I could invest in for the company rather than paying taxes. Give this company an exemption on thirty million dollars that should be paid in taxes and you have just taken away all reasons and incentive to invest a lot of money in that business that is fantastic for it's future revenues. I don't know the wealthy person that does anything differently with tax exemptions they should be paying except put more in the bank, right now that's buying up foreclosed real estate. The wealthy people I know take advantage of so many loopholes that they don't pay any taxes at all. One friend buys two new Mercedes a year, of course they are largely business write offs. He does my taxes and is always recommending tax exemptions that are too much like evasions for our comfort. Here's an example, and I will get the tax code number if anyone wants to really look at the wording. We are going to owe about $50k in taxes for the 2010 year. His suggestion is that we pay someone he will provide that has set up multiple businesses that were designed to post substantial losses. The losses exceed the write offs needed by that business and are excess, so this clause allows another person to buy the losses of that corporation so as to offset the need for more write offs to eliminate a tax obligation at all. So... instead of us having to pay IRS $50k, we only pay $25k to this guy who is ripping off our government in multiple ways. It's in the tax code and my wife and I read it thoroughly. We are going to pass on this one.