Fair Taxation

If there is income, there should be a tax levied on it unless there is a valid expense to offset it. So, for example, does a business (like Google) need a basketball court to do business? They would argue “yes,” because it helps the employees be more relaxed and in the end they do more and better work. I agree. The court stays at the company and is used for employees during work hours. It’s locked at night so it can’t be used for non-business purposes.

This is a real example that I witnessed. Does an owner need a $120,000 car that is paid for by the company which then declares that vehicle as a valid expense? I mostly don’t agree. If the vehicle is used 100% for business activities it should be used as an expense to offset taxes. However, a $40,000 vehicle would do the same job and besides that, the vehicle is only used 5% of the time for business and 95% of the time for personal uses. In this case, the expense that should be used to offset taxes should be $2000 plus a small amount for gas and maintenance.

In one company I worked for the owner’s wife would take any cash payments, delete the invoice, create an inventory adjustment in that amount for those parts, claim shrinkage for the parts, and pocket the cash. One year it amounted to over $12,000. No income tax was paid on that $12,000 and the company’s tax was reduced by $12,000 – another example of double tax evasion.

If everyone paid a fair amount of tax, we wouldn’t be in the position we are currently in. The bigger the Job Creator you are the bigger the amount of taxes you can evade.

What is fair?

What would be more fair is a higher sales tax. If you have the money to buy something, you are making the money to pay the taxes on it.

What would be more fair is to have a maximum expense deduction per line item. If you need a vehicle to do business, you need to prove it and there should be a limit. Let’s say that limit is $50,000. On a $120,000 car, $70,000 would be considered either income for the Job Creator or at least not an expense for the business.
If you need to take a trip for business, there should be a maximum amount for air fare, car rental, food, hotel, etc. First class which may be thousands more than economy would not be deductible. Only employees are paid for so a hotel with 3 rooms for the entire family would be over the maximum and therefore a portion of it would not be deductible.
I understand that this would be laborious to set up and monitor but the benefits could outweigh the costs a huge amount. I haven’t done a study or done a cost-benefit analysis but either have most politicians when they make up some of these policies.

Copyright - This website and its content is Copyrighted by its owners