Fair Tax Act
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Re: Fair Tax Act
Except for the bizarre explanation of how taxes are handled your narrative would be a great synopsis for an Econ 101 class. Thank you for explaining it all yet again.
Re: Fair Tax Act
A companies profits are realized after all the expenses are paid. This is then their taxable income.
What they paid out in taxes on that income is not only tax deductible for next year, it is included as an expense in the pricing for the next years product sales.
As an individual, you get taxed on your income, then taxed again when you buy something with that already taxed money.
But then their are many other taxes you pay that have no income to offset those taxes.
And a lot of them are not tax deductible either. The government claims those taxes are covered in your primary deductible amount when you file a return.
What they paid out in taxes on that income is not only tax deductible for next year, it is included as an expense in the pricing for the next years product sales.
As an individual, you get taxed on your income, then taxed again when you buy something with that already taxed money.
But then their are many other taxes you pay that have no income to offset those taxes.
And a lot of them are not tax deductible either. The government claims those taxes are covered in your primary deductible amount when you file a return.
Re: Fair Tax Act
We will just have to agree that we have two different understandings about corporate and individual taxes. Not a problem. We don't agree on several things. 
Re: Fair Tax Act
Grandpa changed the name of our company from The Wayside Market, to The Wayside Florist in 1913 when he incorporated the business. Being Incorporated means not only does the Company pay taxes, but the owners all pay taxes also on what they draw.
Over the years, as more and more taxes were placed on businesses of all kinds, grandpa's sons who took over the business all took classes on accounting, dad and one brother became certified, but chose to remain private rather than public. Then since my dad is who handled all the accounting for the company, he also took a refresher class each year on taxes.
Like most businesses, he grumbled big time every year around tax time, about all the taxes he had to pay out, including all of those he paid out throughout the year.
Dad kept immaculate books, and his penmanship was so nice, folks though it was a girl who did the books, hi hi.
He was careful to have full documentation and receipts for every allowable deduction, and he took them too.
But then too, he also had ALL of the totals for the taxes he paid out over the course of the year. Which included those which were tax deductible, those which were not, and all the excise taxes he couldn't claim either.
He came up with a single figure that represented all of the taxes we paid out, plus the cost in labor it took in time to account for those taxes. He would then come up with a percentage of taxes against net income.
Then he would go to our item pricing schedule for everything we sold, from individual items all the way up to completed arrangements we delivered. This first chart showed our costs to make those items, or buy to sell, in other words materials costs, plus labor for handling those items. So from that we had the base selling price with no markup.
He would take that figure, and first add to it, using a percentage to come up with the sale price after all expenses, including the taxes we paid out, then the last step was to add our 15% markup for wholesale sales, 50% markup for individual item retail sales, meaning components used in design work sold to customers as a good will gesture, and finally the 100% markup to get the final retail sale price of all designed arrangements we sold, or plants sold at retail in the greenhouse.
My point here is to show, the amount we paid out in taxes is added to the selling price of items BEFORE we add our markup.
This is true for nearly every business I know about! It's just the way it is done.
And the reason I say, no matter how much we are taxed, when the smoke clears, it is the end consumer who pays for all those taxes. Not one red dime comes out of our own pockets.
Over the years, as more and more taxes were placed on businesses of all kinds, grandpa's sons who took over the business all took classes on accounting, dad and one brother became certified, but chose to remain private rather than public. Then since my dad is who handled all the accounting for the company, he also took a refresher class each year on taxes.
Like most businesses, he grumbled big time every year around tax time, about all the taxes he had to pay out, including all of those he paid out throughout the year.
Dad kept immaculate books, and his penmanship was so nice, folks though it was a girl who did the books, hi hi.
He was careful to have full documentation and receipts for every allowable deduction, and he took them too.
But then too, he also had ALL of the totals for the taxes he paid out over the course of the year. Which included those which were tax deductible, those which were not, and all the excise taxes he couldn't claim either.
He came up with a single figure that represented all of the taxes we paid out, plus the cost in labor it took in time to account for those taxes. He would then come up with a percentage of taxes against net income.
Then he would go to our item pricing schedule for everything we sold, from individual items all the way up to completed arrangements we delivered. This first chart showed our costs to make those items, or buy to sell, in other words materials costs, plus labor for handling those items. So from that we had the base selling price with no markup.
He would take that figure, and first add to it, using a percentage to come up with the sale price after all expenses, including the taxes we paid out, then the last step was to add our 15% markup for wholesale sales, 50% markup for individual item retail sales, meaning components used in design work sold to customers as a good will gesture, and finally the 100% markup to get the final retail sale price of all designed arrangements we sold, or plants sold at retail in the greenhouse.
My point here is to show, the amount we paid out in taxes is added to the selling price of items BEFORE we add our markup.
This is true for nearly every business I know about! It's just the way it is done.
And the reason I say, no matter how much we are taxed, when the smoke clears, it is the end consumer who pays for all those taxes. Not one red dime comes out of our own pockets.
Re: Fair Tax Act
Your dad was an excellent cost accountant. I have no disagreement there. The point you are missing is that the incorporation made your flower business a legal entity that is subject to taxes. In other words, like your customers, your business was a consumer of goods, a benefactor of government services, and a tax payer. All taxes on those goods were paid in full prior to selling the product. Those already paid taxes do not compound, accrue by your buyers, nor are they hidden. The tax liability ends at the point of sale. The claim that your customers are paying for your trouble is true. Your business was doing the exact same thing for whatever they purchased. It's how business is done in this country.
Re: Fair Tax Act
Yes Sir, like I've always said, it is the End Consumer who pays ALL the taxes levied on any business!
Since we are a business, all OVERHEAD must be included in our Cost of Goods Sold.
That is a benefit John Doe Consumer does not have. Sure, they can take a tax deduction on their income, but they have no way to recoup those taxes they paid out. But they cannot deduct the taxes which are Hidden in the Purchase Price of what they are buying!
Since we are a business, all OVERHEAD must be included in our Cost of Goods Sold.
That is a benefit John Doe Consumer does not have. Sure, they can take a tax deduction on their income, but they have no way to recoup those taxes they paid out. But they cannot deduct the taxes which are Hidden in the Purchase Price of what they are buying!
Re: Fair Tax Act
I'll just state it one final time. Overhead is not a tax.
Re: Fair Tax Act
I never said Overhead was a tax. But Tax is part of the Overhead!