nom=de=plume wrote:
wrote in message
...

On Thu, 8 Apr 2010 14:50:23 -0700, "nom=de=plume"
wrote:


wrote in message
...

On Thu, 8 Apr 2010 10:37:19 -0700, "nom=de=plume"
wrote:


As long as that profit remains in the corporation and gets used to
build the business, the government should leave it alone, When it gets
pulled out, either as compensation, perks or dividends it should be
taxed.


When profit remains and is used to build the business, it's called a
business expense, which is deductible. Sounds like the incentive would
be
not to pay anyone much of anything. I think CEO pay should be tied to
performance by an independent board. A lot of excessive CEO pay is due
to
the stacking of the Board of Directors by the CEO.

It is not an expense until you spend it. If you bank the profit it
would be taxed and that money would not be available to build the
business. That encourages business to borrow money instead of saving
for expansion. Certainly the interest is deductible but it is still
paying more than you should for things because the banker gets a cut..


Umm... you said, "use it to build the business." And, I replied, "used to
build the business." How does one use it without spending it...
infrastructure, new equipment, etc.?

... but you want to tax it away before I can spend it to build my
business. I suppose "saving until you can afford something" is such a
foreign concept that you are having trouble getting your head around
saving money from one tax year to the next so you can buy without
borrowing.
It is no wonder we are in a debt crisis, the tax code encourages debt.


Where did I say that? Business typically have cash reserves, which they put
in various investment instruments. They're usually pretty sophisticated
about what is taxable and how to deal with it. I've got some minor
experience with "saving until you can afford something," since that's what I
used to buy the house, start the business, etc., etc. Feel free to think
otherwise.


Cash on hand = retained profits that were already taxed.

"Larry" wrote in message
...
nom=de=plume wrote:
wrote in message
...

On Thu, 8 Apr 2010 14:50:23 -0700, "nom=de=plume"
wrote:


wrote in message
...

On Thu, 8 Apr 2010 10:37:19 -0700, "nom=de=plume"
wrote:


As long as that profit remains in the corporation and gets used to
build the business, the government should leave it alone, When it
gets
pulled out, either as compensation, perks or dividends it should be
taxed.


When profit remains and is used to build the business, it's called a
business expense, which is deductible. Sounds like the incentive
would
be
not to pay anyone much of anything. I think CEO pay should be tied to
performance by an independent board. A lot of excessive CEO pay is
due
to
the stacking of the Board of Directors by the CEO.

It is not an expense until you spend it. If you bank the profit it
would be taxed and that money would not be available to build the
business. That encourages business to borrow money instead of saving
for expansion. Certainly the interest is deductible but it is still
paying more than you should for things because the banker gets a cut..


Umm... you said, "use it to build the business." And, I replied, "used
to
build the business." How does one use it without spending it...
infrastructure, new equipment, etc.?

... but you want to tax it away before I can spend it to build my
business. I suppose "saving until you can afford something" is such a
foreign concept that you are having trouble getting your head around
saving money from one tax year to the next so you can buy without
borrowing.
It is no wonder we are in a debt crisis, the tax code encourages debt.


Where did I say that? Business typically have cash reserves, which they
put
in various investment instruments. They're usually pretty sophisticated
about what is taxable and how to deal with it. I've got some minor
experience with "saving until you can afford something," since that's
what I
used to buy the house, start the business, etc., etc. Feel free to think
otherwise.


Cash on hand = retained profits that were already taxed.


Perhaps. I doubt Microsoft has stockpiles of cash in their mattresses. Any
interest made on the money is taxable... well, usually.

--
Nom=de=Plume