# Does Raising Taxes Really Kill Jobs?



## fantasymaker (Aug 28, 2005)

That's always the first thing said but it just doesnt make sense to me.
For instance if I'm in a 99% tax bracket and I pay a gardener $40,000 a year so I don't have to take care of my yard it only costs me $ 400 bucks out of pocket.
That really wont add much to my yacht
But if I'm in a 0% bracket that's $40,000 grand out of pocket that might get me another bedroom.
Same with investment the higher the taxes the more sense it makes to put money into my company not my lifestyle.


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## 7thswan (Nov 18, 2008)

Yes, come to Michigan and see what high Taxes have done here. Used to be the high expense was the Union $$$ paycheck. Then the state raised the Taxes on the Auto co.s, now they have had enough reason to move south. Non-union and a business friendly local government. Now all of our workers are moving out- no auto jobs=no building of houses=builders move out=restaurants close=no wait staff, on and on.


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## JJ Grandits (Nov 10, 2002)

The less you have (taxes) the less you can spend. The less you spend and someone loses a job. This pretty much applies to individuals and businesses. In businesses the taxes are figured into the cost of the product or service. By raising that price of that product or service you eliminate some of the market, demand falls, someone loses a job. If they have more money the more they spend. By spending more demand increases and jobs are created.


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## Wags (Jun 2, 2002)

And there are a lot of Mom & Pop businesses that are barely eeking out a living with their business maybe they have no employees or maybe they have less than a dozen. Those higher taxes definitely affect them.


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## The Paw (May 19, 2006)

2 points.

I think raising taxes has more of a dampening effect on growth rather than direct job loss as such.

Second, it depends greatly on the amount of the tax hike. Small incremental tax increases have virtually no disemployment effect, but if you add a 30% payroll tax out of nowhere, obviously there would be some immediate consequences.


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## 65284 (Sep 17, 2003)

Every dollar a business had to send to the IRS is a dollar less it has to spend on expanding that business, less or no new machinery, inventory, or more workers. Of course less inventory or machinery means less business for the suppliers of those goods, and if no new workers are hired it means fewer jobs.

On an individual basis the more a person sends to the IRS the less that person has to spend on automobiles, travel, clothing, dining out, and a multitude of things they need or want. Again, that ripples back through the employment sector, less jobs in the areas that supply those needs and wants.


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## fantasymaker (Aug 28, 2005)

I think you may be missing a point about our tax system. It starts low and works up while there isn't a 99% bracket, at one time there was a 90% bracket but you had to be making a million or so to get there. So its the wealthy with big money that get the choice of "would I rather have a tiny bit more after tax money or would I rather hire another employee or make a investment that makes my life easier".


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## fishhead (Jul 19, 2006)

Yes the higher the taxes the more incentive to avoid taxes by investing in your company.

Someone always pays when taxes are shifted. There always winners and losers. I believe for the past 3 decades the middle class has been the loser as nearly all of the wealth created by increases in productivity went to the top 10% and nothing went to the worker. If fact middle class workers lost ground.

Now those same workers are calling for even more of the wealth to get "redistributed" to the wealthy. I find that hard to believe.


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## JJ Grandits (Nov 10, 2002)

The one that gets me is that Corporations don't pay taxes. Corporations are owned by shareholders and shareholders pay taxes on the dividends they recieve and when they sell a stock and make a profit they pay a lot of taxes.


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## 7thswan (Nov 18, 2008)

Simply not true. Alot of people that Create, as in the type of person that has the drive and ambition to produce things for consumption. They do it simply out of that love to create. Reaching a goal,sometimes has nothing to do with the amount of money one makes. But I can assure you that being over regulated and Taxed sure can put a damper on wanting to produce when it's not appreciated. Look at a marriage, act like it doesn't matter how you treat your wife, never say thanks. Every Time she does your laundry, hand her the neighbors laundry and expect her to do that too. That won't last long. Get the jealousy and the excuses out of your head, think about common human nature.


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## 7thswan (Nov 18, 2008)

JJ Grandits said:


> The one that gets me is that Corporations don't pay taxes. Corporations are owned by shareholders and shareholders pay taxes on the dividends they recieve and when they sell a stock and make a profit they pay a lot of taxes.


They do pay Taxes,they are passed on to the consumer in the price of a product.


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## beowoulf90 (Jan 13, 2004)

7thswan said:


> They do pay Taxes,they are passed on to the consumer in the price of a product.


Thank you, glad someone pointed that out.. It's obvious that they never owned a business... If my prices or taxes ever went up, the customer had to pay it.

While it may only be a penny on an item, it was on all items.. The same thing for property taxes.. If the State raises the property taxes and a person owns and rents Apartments, then guess who is going to pay for it.. Not the landlord, but the renters are going to cover the increase in costs..


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## watcher (Sep 4, 2006)

Business are in business to make money. If they can save 5-10% by moving the odds are they will move. So if your state or nation has a tax that is much higher than another the odds are most businesses which can will move taking jobs with them. CA and NY are two very good examples.

People want to keep as much of their money as possible. If your state has a high overall tax rate most people who can will move. Again CA and NY are good examples.


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## fishhead (Jul 19, 2006)

Are the wealthy now called the "Creators"? LOL!

Why are working class Americans looked down on now as if they are second class citizens?

I remember a time when being called an American worker was a sense of pride. It was also a time before the "redistribution" of the past 3 decades when a single worker could support a family of 4 in a modest house with the ability to set aside a nest egg for retirement.


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## Chuck (Oct 27, 2003)

Fantasymaker, I'll just relate my personal experience. I hire people for various endeavors on a regular basis. And I almost never hire anyone inside the US, because of the taxes I'd have to pay on what I pay them. For a US employee, I have to pay twice - the employee and the government. For an overseas employee, I only pay once.


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## Chuck (Oct 27, 2003)

fishhead - that is correct. The wealthy are those who create jobs. The workers are those who fill the jobs. The workers produce, but their "creativity" is not their own.


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## pancho (Oct 23, 2006)

No, everyone is just so happy to pay taxes, the more the better.
Much like asking how many enjoy catching the flu.


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## Txrider (Jun 25, 2010)

fishhead said:


> Yes the higher the taxes the more incentive to avoid taxes by investing in your company.


Or relocate to a place with lower taxes.

Capital gains increases harm business more I think. The tax is paid when the gain is realized, when the stock is sold, so it tends to lock up the money and people who could be investing money in a company keep it locked up because selling to free up the money is too costly in taxes.


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## 65284 (Sep 17, 2003)

Our tax system is badly broken. It's become an insane wealth re-distribution scheme that politicians use to achieve their social engineering aims and reward their friends! This wacky method of taxation is actually a disincentive to invest, work hard and succeed. 

Who, in their right mind, would intentionally devise an upside down tax policy that penalizes the producers of wealth, the creative, hard working folks that take a chance and buy or start a business that supply goods or services, and provide jobs for themselves and others, while at the same time rewarding many who don&#8217;t? 

What's even more perverse is how this system rewards those who don't produce much of anything except children. How strange is it that the more kids produced, kids that add additional stress to the social service and infrastructure systems, and the less wages earned result in fewer taxes, if any, being paid. Or, worse yet, tax "refunds" when little or nothing was ever paid in to be refunded.

The whole mess needs to be scrapped and replaced with a revenue system based on tariffs on imported goods, as originally intended when the country was founded. This would provide revenues and negatively impact, as it properly should, those companies that have shipped jobs overseas, and import cheap Chinese junk.

If this should prove insufficient revenue and an income tax become absolutely necessary, it should be temporary, severely limited as to rates, uses of income tax monies raised, and tamper proof from politicians. Everyone should be taxed at the same rate on ALL income, if that income be one dollar or one million dollars. I can see no sane justification for financially raping people that earn more.


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## SquashNut (Sep 25, 2005)

On one hand they want us to consume, on the other they call us selfish for it, so what is it?
we had a small business and we passed all costs of the item on to the consumer, by multiplying all costs by a multiplyer. that included taxes, raw material, labor, fuel ect.
So yes, our customers paid for every thing. So when they want to raise taxes on the rich, they are raising them on the middle class.

but does it really matter, the federal goverment needs to stop trying to make jobs, it's costing us too much.


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## MoonRiver (Sep 2, 2007)

I used to own a company and usually had 8 - 12 employees. I was in a very competitive environment so tightly controlling expenses was critical. I provided 50% matching retirement and health care to my employees. As the cost of health care went up it became more and more difficult to continue to match retirement at 50%.

I think many small businesses are in a similar situation. So any increase in the cost of doing business would most likely lead to letting 1 or 2 employees go and filling the void with contract labor as needed. People usually think of corporate income tax, but it could be an increase in medicare or social security employer rate, unemployment tax rate, or even an increase in my personal rate.

On the other hand, if taxes were lower, I would have additional money to spend. Even if I didn't spend it on hiring a new employee, by spending more money I am increasing the likelihood that other businesses may be able to hire new employees.

It really comes down to lower taxes means more money to spend which leads to increased demand which leads to hiring.


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## poppy (Feb 21, 2008)

fishhead said:


> Yes the higher the taxes the more incentive to avoid taxes by investing in your company.


Sorry, it doesn't work that way. The old saying that if you want less of something, tax it is true. Higher taxes does not encourage people to do things that would increase their income so they can give a large part of those increased profits to government. Higher taxes do encourage people to hunker down and fond ways to avoid those high taxes, like move the business overseas.


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## fishhead (Jul 19, 2006)

That's why we need to shift taxes from labor to pollution. Reward hard work and put the true cost of pollution on polllution. Let the free market work.

I just took a entrepeneur (sp) class. Our instructor said that 95% of all jobs are created by businesses with 10 or less employees. By the time they deduct building, energy, payroll, supplies, etc. I doubt that very many show a profit of $250,000.


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## MoonRiver (Sep 2, 2007)

fishhead said:


> I just took a entrepeneur (sp) class. Our instructor said that 95% of all jobs are created by businesses with 10 or less employees. By the time they deduct building, energy, payroll, supplies, etc. I doubt that very many show a profit of $250,000.


No, but they all hope to make $250,000 at some point in the future. So they are aware that the government increasing taxes on people making over $250,000 is in fact a future tax on them.


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## wyld thang (Nov 16, 2005)

fantasymaker said:


> That's always the first thing said but it just doesnt make sense to me.
> For instance if I'm in a 99% tax bracket and I pay a gardener $40,000 a year so I don't have to take care of my yard it only costs me $ 400 bucks out of pocket.
> That really wont add much to my yacht
> But if I'm in a 0% bracket that's $40,000 grand out of pocket that might get me another bedroom.
> Same with investment the higher the taxes the more sense it makes to put money into my company not my lifestyle.


First off there is a HUGE difference between a business paying taxes, and a private individual paying taxes. Do some research to how many taxes a busines pays(don't forget STATE AND MUNICIPAL taxes:nono. 

Private individuals employing individual gardeners/workers DOES NOT make the majority of jobs in America. A lot of that work is paid by cash under the table--no SS, worker's comp insurance, health insurance etc paid(no bennies either on the worker's part, but they sure can sue later, or if they slip n fall).


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## MoonRiver (Sep 2, 2007)

wyld thang said:


> First off there is a HUGE difference between a business paying taxes, and a private individual paying taxes. Do some research to how many taxes a busines pays(don't forget STATE AND MUNICIPAL taxes:nono.
> 
> Private individuals employing individual gardeners/workers DOES NOT make the majority of jobs in America. A lot of that work is paid by cash under the table--no SS, worker's comp insurance, health insurance etc paid(no bennies either on the worker's part, but they sure can sue later, or if they slip n fall).


Plus paying a gardener to do work around your house isn't tax deductible.


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## Pouncer (Oct 28, 2006)

Lots of misunderstandings voiced here....where did the idea come from that corporations don't pay taxes?

Oh my. I remember seeing the size of a check made out to the IRS for corporate income tax and I was astounded at the size-over a quarter million. That does NOT include the payroll, state, city taxes paid every week, month, quarter or year. Let's just say it was well past a quarter of net profits for the entire year.

Most small businesses operate on a relay thin margin, and anything that eats into that hampers expansion. That huge check my boss wrote every year? Kept him from being able to purchase and install newer equipment-that would make the company more competitive. The more sales, the more employees.

No sales = No paycheck.

Amazing how that simple fact is often overlooked by lawmakers.


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## Razorback21 (May 13, 2003)

watcher said:


> Business are in business to make money. If they can save 5-10% by moving the odds are they will move. So if your state or nation has a tax that is much higher than another the odds are most businesses which can will move taking jobs with them. CA and NY are two very good examples.
> 
> People want to keep as much of their money as possible. If your state has a high overall tax rate most people who can will move. Again CA and NY are good examples.


Great post!!! Think about our households...why is it we raise our kids in New York, New Jersey, etc., but when it is time to retire, we move to Florida, Alabama or Arkansas? People want to keep as much of their money as possible. The corporate mindset is not that much different.


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## Txrider (Jun 25, 2010)

Pouncer said:


> Lots of misunderstandings voiced here....where did the idea come from that corporations don't pay taxes?
> 
> Oh my. I remember seeing the size of a check made out to the IRS for corporate income tax and I was astounded at the size-over a quarter million. That does NOT include the payroll, state, city taxes paid every week, month, quarter or year. Let's just say it was well past a quarter of net profits for the entire year.
> 
> ...


It goes even deeper than that.

If a state has state income tax, employers have to pay employees more to compensate. If the state has high sales tax, same deal. Inflated property values, same deal.

Cost of living for employees is also a factor in why a company chooses a state to do business in.

Anything that affects the cost of doing business, taxes, property costs, regulations, employee cost of living, all figures into how competitive a business can be or if it can even break even.


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## fantasymaker (Aug 28, 2005)

65284 said:


> Every dollar a business had to send to the IRS is a dollar less it has to spend on expanding that business, less or no new machinery, inventory, or more workers. Of course less inventory or machinery means less business for the suppliers of those goods, and if no new workers are hired it means fewer jobs.
> 
> On an individual basis the more a person sends to the IRS the less that person has to spend on automobiles, travel, clothing, dining out, and a multitude of things they need or want. Again, that ripples back through the employment sector, less jobs in the areas that supply those needs and wants.


 EXACTLY! so rather than send 100 bucks to the IRS wouldn't it make more sense for most people chose to employ someone grow the vale of their assets and not have to send Irs that 100?

You guys do relize you dont pay taxes on business expences?:buds:


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## 7thswan (Nov 18, 2008)

fantasymaker said:


> EXACTLY! so rather than send 100 bucks to the IRS wouldn't it make more sense for most people chose to employ someone grow the vale of their assets and not have to send Irs that 100?
> 
> You guys do realize you dont pay taxes on business expenses?:buds:


Not true they changed the law here. You get taxed every year on every chair/desk, any piece of equipment it takes to run your business. Yup every year you have to do an inventory and the the amount of depreciation is taken off, then you are Taxed.


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## Curtis B (Aug 15, 2008)

7thswan said:


> Not true they changed the law here. You get taxed every year on every chair/desk, any piece of equipment it takes to run your business. Yup every year you have to do an inventory and the the amount of depreciation is taken off, then you are Taxed.


Now I haven't had to deal with taxes every place I have worked, but the three that I have you are partialy correct. You do depreciate equipment, but it is on your tax role for a specified period of time (if I am remembering correctly 1-10 years). If you buy a peice of equipment for 100K and it has an allowable 10 year depreciation, about 10K per year on your amortorization schedule. After that ten years you can no longer write off the depreciation (which takes say 10K off the "bottom line") and then start paying taxes on the 10K again. The downfall for alot of companies is that they have to take out a loan for the initial expense, which is why the "credit crisis" hurt many companies. Also it is correct that labor does come off on taxes. Taking inventory usually has to do with company policy (traking) and some banks will loan out a large sum of money for various items and then come later to inventory those items to make sure the money was spent on what the company said it spent it on.


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## watcher (Sep 4, 2006)

Pouncer said:


> Lots of misunderstandings voiced here....where did the idea come from that corporations don't pay taxes?


From the simple logic only people can work and to produce a good or service. Which means only people can make money therefore only people can pay money to the government, i.e. taxes.


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## Sumer (May 24, 2003)

7thswan said:


> They do pay Taxes,they are passed on to the consumer in the price of a product.


Then when the price gets too high I dont buy it. Or buy something cheaper which is probably made in China.


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## dixienc (Apr 11, 2008)

7thswan said:


> Not true they changed the law here. You get taxed every year on every chair/desk, any piece of equipment it takes to run your business. Yup every year you have to do an inventory and the the amount of depreciation is taken off, then you are Taxed.


Its the same here in NC.


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## dixienc (Apr 11, 2008)

watcher said:


> From the simple logic only people can work and to produce a good or service. Which means only people can make money therefore only people can pay money to the government, i.e. taxes.


Am I mistaken or don't corporation get started by, funded by, and ran by people? Or have robots taken over??


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## fantasymaker (Aug 28, 2005)

Opps I should have specified We were talking income taxes...LOL it would have made this a MUCH different conversation.


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## Bret4207 (May 31, 2008)

fantasymaker said:


> EXACTLY! so rather than send 100 bucks to the IRS wouldn't it make more sense for most people chose to employ someone grow the vale of their assets and not have to send Irs that 100?
> 
> You guys do relize you dont pay taxes on business expences?:buds:


No, because you aren't factoring in all the associated costs that go with hiring someone. If you hire me for $10.00 an hour it's probably costing you more like $25.00 an hour to have me working there. And workers aren't an asset, physical property and cash are assets. A lathe is an asset, a worker is a potential liability. 

You are partially correct on expenses- you get a break on SOME expenses, not all, and on many things it's a partial break.


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## watcher (Sep 4, 2006)

dixienc said:


> Am I mistaken or don't corporation get started by, funded by, and ran by people? Or have robots taken over??


I'm confused. . .are you trying to counter my statement?


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## beowoulf90 (Jan 13, 2004)

Sumer said:


> Then when the price gets too high I dont buy it. Or buy something cheaper which is probably made in China.


Not necessarily true. I as a business may actually cut my work force to make -up the difference..

So if I employ 15 people and they raise my taxes and my operating costs go up and the market won't bear a price increase. I may lay off 3-5 employees, which will lower my operating costs and still allow me to make a profit.

Or move the business to China or some other place with a cheap work force..


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## CocalicoSprings (Mar 12, 2008)

Nobody wants to pay taxes. If we were fortunate enough to have the politicians vote to eliminate the federal income tax, what would happen? Would everything get privatized?
Could we have Social Security, hospitals, interstate highways, schools, a military?
How could we do it?


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## Sawmill Jim (Dec 5, 2008)

CocalicoSprings said:


> Nobody wants to pay taxes. If we were fortunate enough to have the politicians vote to eliminate the federal income tax, what would happen? Would everything get privatized?
> Could we have Social Security, hospitals, interstate highways, schools, a military?
> How could we do it?


You got any idea how much tax is on one gallon of gas :umno:
Indirectly i bet we pay over 50% of our income in a tax of some sort or more .:shrug:


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## Bret4207 (May 31, 2008)

CocalicoSprings said:


> Nobody wants to pay taxes. If we were fortunate enough to have the politicians vote to eliminate the federal income tax, what would happen? Would everything get privatized?
> Could we have Social Security, hospitals, interstate highways, schools, a military?
> How could we do it?


Income tax doesn't cover Social Security, schools and some highway funding. Regardless, we could do somethings, just not everything. You can also go to flat or consumption tax or a value added tax. Our problem is we've come to think all these entitlements and programs and grants are required. It's simply a mind set we can't afford anymore.


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## kmam10 (Aug 5, 2007)

MoonRiver said:


> No, but they all hope to make $250,000 at some point in the future. So they are aware that the government increasing taxes on people making over $250,000 is in fact a future tax on them.


As one who used to be in that category, first during the Clinton years before the Bush tax cut then after the Bush tax cut, I will tell you it really didn't matter. The extra amount of tax was not much compared to what I made, and I really never noticed the Bush tax cut that much. Most of the people I hear arguing about how awful letting those tax cuts expire will be (those I know, not on this board as I don't know you) have never made that much money, and as they are working class or middle class, probably never will. If the tax cuts were sustainable, why were they made temporary and not permanent?


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## poppy (Feb 21, 2008)

CocalicoSprings said:


> Nobody wants to pay taxes. If we were fortunate enough to have the politicians vote to eliminate the federal income tax, what would happen? Would everything get privatized?
> Could we have Social Security, hospitals, interstate highways, schools, a military?
> How could we do it?


You have fallen into the trap of thinking we cannot live and prosper without a federal government doing everything for us. Social Security is funded by payroll taxes, not income taxes. It is not constitutional for government to even be involved in schools and hospitals. They can be privately funded as many are or funded by states and localities. It is the responsibility of the feds to maintain a military according to the constitution and that can be accomplished by various tax methods.


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## Bret4207 (May 31, 2008)

kmam10 said:


> As one who used to be in that category, first during the Clinton years before the Bush tax cut then after the Bush tax cut, I will tell you it really didn't matter. The extra amount of tax was not much compared to what I made, and I really never noticed the Bush tax cut that much. Most of the people I hear arguing about how awful letting those tax cuts expire will be (those I know, not on this board as I don't know you) have never made that much money, and as they are working class or middle class, probably never will. If the tax cuts were sustainable, why were they made temporary and not permanent?


One of the Bush tax cuts was an additional $500.00 a year child tax credit. That helps around here. It's not just the $250K earner that's affected.


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## edcopp (Oct 9, 2004)

Tax on a gallon of gas. That is called a "fair" tax. Everybody gets nailed.:awh:


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## tgmr05 (Aug 27, 2007)

Yes, raising taxes kills jobs. The less money in the private sector, the less money for payroll, etc. Raising taxes makes folks in government think they have more money, yet in a few years, they actually have less, but have spent more. The problem is government spending.

Even the wealthy have to keep track of their money, or they become poor, too. Too many people think having money makes you live in some fantasy world where things do not cost money, anymore. Conversations about spending 40,000 on a groundskeeper and how it only costs the business owner 400 out of pocket is a joke. It still costs 40,000. If the business pays it, then that is 40,000 less the business makes, which would put quite a few businesses under. Instead of being able to pay the 400 out of pocket, after taxes, they would have 39,600 worth of debt somewhere......and would have to pay the groundskeeper in walmart gift cards or something they could charge to credit.....

A big reason we have such ludicrous ideas about the wealthy not having to worry about money is simply this - the welfare mentality. A good reference is this. The average income in the world is roughly 2000 per year. Most people in this country would be considered extremely wealthy in comparison. Especially those on food stamps, welfare, disability, etc. While those in other countries have to work very hard just to get 2000, we have folks in this country who are considered poor, yet receive more in food stamps and welfare benefits for doing NOTHING, than those who work their butts off in other countries. It is the mentality that brings about the silly idea that things are free to the rich........, yet the opposite is actually true. Another example of a well intentioned program doing much more harm than good. When you grow up in a household that earns 15,000 a year through work, and yet that household lives a lifestyle equivalent to a 30,000 income due to earned income credit, food stamps, welfare, etc. - you create a problem with folks not being able to deal with the reality of what things actually cost....


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## Evons hubby (Oct 3, 2005)

Its really pretty simple.... the money the government steals from a company cannot be put back into growing the business. Business cannot expand, and often cannot even maintain their current size..... fewer jobs are the result. Tax cuts on the other hand allow businesses to flourish, our economy grows and more people have jobs. This is not rocket science.


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## bowdonkey (Oct 6, 2007)

I'm all for giving tax breaks to companys, buisness, whatever as long as it's creating jobs in the USA. And as long as any public infrastrure used is also payed for by the company.


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## Pouncer (Oct 28, 2006)

Imagine the conversations I have been having with folks about the changes coming as a result of Obamacare.

Marriage penalty back
Child care credit halved
All base income taxes raised at least three percent
Paying taxes on health insurance-whether you use it or not

Mostly I get a "deer in the headlight" look and they're stunned. 

How is it I got to be so aware and they are so ignorant?


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## Sawmill Jim (Dec 5, 2008)

Pouncer said:


> Imagine the conversations I have been having with folks about the changes coming as a result of Obamacare.
> 
> Marriage penalty back
> Child care credit halved
> ...


Wait till you see the look when gas hits 5 bucks a gallon or bread 10 bucks a loaf :smiley-laughing013:


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## bowdonkey (Oct 6, 2007)

Gotta pay off the deficit somehow boys.


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## Sawmill Jim (Dec 5, 2008)

bowdonkey said:


> Gotta pay off the deficit somehow boys.


Well i am sure those Co moving out of the US will volunteer to pay tax. :icecream: Also other people are moving out of the US to less regulated places .:bow:


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> Conversations about spending 40,000 on a groundskeeper and how it only costs the business owner 400 out of pocket is a joke. It still costs 40,000. If the business pays it, then that is 40,000 less the business makes, which would put quite a few businesses under. Instead of being able to pay the 400 out of pocket, after taxes, they would have 39,600 worth of debt somewhere......and would have to pay the groundskeeper in walmart gift cards or something they could charge to credit.....
> ....


LOL I think it must be you that dosent understand how income taxes work , if you have a expence you deduct it from the income you make before you pay taxes thus if you hire someone your taxbill is reduced by the amount you paid them.So your cost of hireing them is reduced by the percentage of your your marginal tax rate.


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> LOL I think it must be you that dosent understand how income taxes work , if you have a expence you deduct it from the income you make before you pay taxes thus if you hire someone your taxbill is reduced by the amount you paid them.So your cost of hireing them is reduced by the percentage of your your marginal tax rate.


There is a difference between hiring someone at 40,000 and getting say a 25 percent reduction in taxes for the added expense, versus the added cost of payroll taxes, general liability, workman's comp, health ins., other benefits, etc. not to mention overhead costs on that employee - which, by the way, includes the entire 40,000 expense of the employee, as that employee is not actually producing the product you charge customers for, etc. You need to do more research before you claim hiring folks is such a boon for employers. If it was so simple, it would be done everywhere, already..... 

Lets take the 99 percent tax bracket, and the mere 400 out of pocket to pay for the gardner. To make that 400, you would still have to show an extra 40,000 in profit to make the 400 out of pocket to pay the gardner. Not to mention, the business owner would need whatever income needed to live. Let us say the person is frugal, and only needs 10K a year after taxes to live on - that is 833.33 per month, as he expenses some of his personal stuff through the business, as allowed by law/tax code. He would only need a mere 1 million to get that 10,000 he needs to live day to day. So, the company needs to make 1 million 40 thousand above and beyond ALL other expenses, etc.

Now, take the 0 percent tax rate. Same person, same 10K needed for frugal living, only now the 40,000 gardner must be paid out of pocket. So, the 40,000 gardner requires 40,000 in profit, and the 10,000 for the frugal living only requires 10,000 . Now the business only needs to make 50,000 above and beyond ALL other expenses. Now to help make it more understandable, is it easier to make 50,000, or 1,040,000 - off the same size company? And, when you take out the 40,000 gardner, it becomes 10,000 versus 1,000,000. Does that help you understand how higher taxes make things worse?


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## tgmr05 (Aug 27, 2007)

Forgot to mention, in the 99 percent example, there is still the added expense to the company for the 40,000 employee.

In the 0 percent example, you save that 40,000 expense, as well, as you are paying the employee from straight profit.

So, if you get right down to it. The company in the 99 percent bracket must make nearly 80,000 extra in gross sales to pay for the same person, versus 40,000 extra in the 0 percent example. And that does not include the cost of insurances, benefits, etc. that must be paid by the company if the employee is expensed out, either - not to mention the overhead costs....


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## Aintlifegrand (Jun 3, 2005)

Businesses whether they are small or large are all about margins ...if they are small and private they make these decisions about margins..if they are large and publically traded then they are mandated to specific profits..one must achieve a certain margins in any case and they are usually competitive within a specific industry. Once that is understood then it is also understood that everything that affects those margins affects the business. Be it taxes, increases in min. wage, health care costs, and such fall into one of three categories as to what effect it has on that business:

1) Prices to consumer increase ( currently cannot really be done considering the unemployment and wage deflation of the people)
2) Bottom line cost such as operating costs or labor is reduced
2a) That can be done by buying less stuff (domino to other businesses) or reducing hours, wages, benefits or people
2b) There will be no expansion or capital spending during this period either
3) Close down or move business to a more friendly environment

One other truth.. even if one could prove that there was no "harm' to a business by a slight increase in taxes it would still have an affect based on *perception which in business is always your workable reality*...look at how just the recent discussion of letting the tx cuts expire has caused more economic down turn even though we were declared out of the recession in June 09...keep it up and we will all be unemployed


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> You need to do more research before you claim hiring folks is such a boon for employers. If it was so simple, it would be done everywhere, already..... ?


It is and we dont even have a 99% bracket




tgmr05 said:


> Now the business only needs to make 50,000 above and beyond ALL other expenses. Now to help make it more understandable, is it easier to make 50,000, or 1,040,000 - off the same size company? And, when you take out the 40,000 gardner, it becomes 10,000 versus 1,000,000. Does that help you understand how higher taxes make things worse?


You do understand that the 90 % rate didnt kickin till you were over a million in personel income? Id assume a 99% rate would be up around 10 million.
That original 10 grand your owner is living on would be taxed at a very low rate most likley nothing at all in income taxes.:sing:


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## tgmr05 (Aug 27, 2007)

Ok, let's simplify this. A company does 500,000 in gross sales annually. The owner's salary inside the company, not the profit, is taxed at 25 percent. They wind up with 50000 in profit at the end of the year, shown on their tax forms. This corporate profit is then taxed at the maximum rate of 35 percent or better put, 17,500 in taxes and 32,500 in actual hands on profit.

The next year, they hire this wonderful 40,000 per year gardner to take care of their house, because of the wonderful tax advantage you claim is so great. The business now has an additional expense of 40,000 just to pay for the salary on the new employee. Based on the 9.8 percent workman comp rate for a lawn maintenance type employee, the company now also has an additional 3920 in cost. Oh, but wait, there is also the payroll taxes that the employer pays, that the employee does not. There is another 5198.80 to add to the cost of the employee. But wait, it does not end there. The employee has a family, and needs health insurance, which the company pays 50 percent of - yet another 5038.00 cost added - based on the BC/BS rate for the company of that size in this area.

So, to simplify, this 40,000 expense that is added, now actually costs the company 54156.

So, how in the world does increasing expenses 54156 benefit a company made 50,000 in profit and was paying 35 percent tax rate? The company is now 4156 in debt, or better put, lost 4156 on their year end. Sure, the employer did not have to pay the ridiculous 35 percent tax rate to the IRS, but now he is short 4156, and may not be able to make payroll next month, due to the fact he no longer makes the 32,500 in profit to put away to cover extra expenses that pop up..., thus putting the business under and putting more than the gardener out of work.

Plus, how would hiring two people benefit the company so much, based on what you are positing???


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## Sonshine (Jul 27, 2007)

kmam10 said:


> As one who used to be in that category, first during the Clinton years before the Bush tax cut then after the Bush tax cut, I will tell you it really didn't matter. The extra amount of tax was not much compared to what I made, and I really never noticed the Bush tax cut that much. Most of the people I hear arguing about how awful letting those tax cuts expire will be (those I know, not on this board as I don't know you) have never made that much money, and as they are working class or middle class, probably never will. If the tax cuts were sustainable, *why were they made temporary and not permanent*?


Because they couldn't get the Dems to vote to make them permanent.


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## fantasymaker (Aug 28, 2005)

I want to quit
I didnt make it clear AT THE BEGINING that I was talking about the INCOME tax and Now Dispite stating that no one seems to be able to get to that point.
So go ahead and talk about any randum tax you care too.
Tgmr5
I think by making the jump to that 35% rate you made my point agin, as stated in a99% tax that emplyee with all the additional stuff you want to add still only cost the company $541.56 LOl he wouldnt have to add much value to the company to justifiy that would he!


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## Sawmill Jim (Dec 5, 2008)

That's always the first thing said but it just doesnt make sense to me.
For instance if I'm in a 99% tax bracket and I pay a gardener $40,000 a year so I don't have to take care of my yard it only costs me $ 400 bucks out of pocket.
That really wont add much to my yacht
But if I'm in a 0% bracket that's $40,000 grand out of pocket that might get me another bedroom.
Same with investment the higher the taxes the more sense it makes to put money into my company not my lifestyle.
__________________ 

First you done paid that 99% income tax and with what is left is your income. A house gardener is not deductible any way you go . If you hire the gardener at your factory then it would lower the corp tax making your large take home for your gardener at home less . 

Play with a down scale model if you paid a gardener $4,000 would you miss the real cost of $40.00 dollars would that add much to your row boat :bouncy: Will that $40.00 add a room to your dog house .

What kind of business have you ever owned and operated ?? Any business right now is a huge risk one miss and they are out . Some would rather take as large a salary out of the Co as they can which in a small Corp gets taxed twice . With taking all they can home their finger at the business is on the speed dial to their bankruptcy lawyer


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## tgmr05 (Aug 27, 2007)

Ok, let's take this number you mention, 541.56. That is the cost, you say, to the owner/employer. Who pays the rest, the remaining 48740? Where does that money come from? 

The mistake you are making is assuming the business can absorb rising expenses and/or costs. Whether a small business, or a multi-billion dollar corporation, all companies have to adjust to the market in a free market system. When costs go up - for example, income taxes - business expenses either must go down, or revenue up. You cannot simply add employees to make things better. There are people who have owned multi-million dollar companies, who have learned the hard way, that went bankrupt because they fell prey to a common fallacy that somehow budgeting goes out the window when you have millions and fancy tax advisers.


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## tgmr05 (Aug 27, 2007)

kmam10 said:


> As one who used to be in that category, first during the Clinton years before the Bush tax cut then after the Bush tax cut, I will tell you it really didn't matter. The extra amount of tax was not much compared to what I made, and I really never noticed the Bush tax cut that much. Most of the people I hear arguing about how awful letting those tax cuts expire will be (those I know, not on this board as I don't know you) have never made that much money, and as they are working class or middle class, probably never will. If the tax cuts were sustainable, why were they made temporary and not permanent?


This has to be one of the most ridiculous statements I hear, not to mention the most condescending. If it really does not matter how much more of your income you got to keep was, please redistribute that wealth you obviously do not need to someone who does. I can provide you with a good mailing address. What, ??? No??? Hmmm. Have not had one taker, yet. Obviously no truth to that statement about making so much money it really did not matter. 

The only people who have such a cavalier attitude toward money wind up in bankruptcy court, if they do not come to their senses. If you truly know people with money, you know they account for every penny, and NONE sent that tax cut back because it really did not matter and was so unsustainable......


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> Ok, let's take this number you mention, 541.56. That is the cost, you say, to the owner/employer. Who pays the rest, the remaining 48740? Where does that money come from?
> 
> The mistake you are making is assuming the business can absorb rising expenses and/or costs. Whether a small business, or a multi-billion dollar corporation, all companies have to adjust to the market in a free market system. When costs go up - for example, income taxes - business expenses either must go down, or revenue up. You cannot simply add employees to make things better. There are people who have owned multi-million dollar companies, who have learned the hard way, that went bankrupt because they fell prey to a common fallacy that somehow budgeting goes out the window when you have millions and fancy tax advisers.


LOL Where does that $48740 come from? You and me .It comes out of taxes that dont need to be paid. In the 99% bracket example we are talking about where you have many thousands of dollars worth of taxes to pay. If you pay the employee costs of $541560 then you reduce your tax bill by $48740 and that offsets that same amount thus your out of pocket cost for that employee is only $541.56


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## tgmr05 (Aug 27, 2007)

I understand where you are coming from, but you have to realize that the company still has to pay 48740 for the employee. While they no longer have to pay the IRS 48740, the company still is the one paying, not John Q Public. The company either pays the IRS or the employee, and the rest of the TAXPAYERS have NOTHING to do with it.

Ok, let's say McDonalds gives you 40 cents off Big Macs and over the course of the year your family ate 1000 Big Macs. During that year, you also spent 400 on a TV - Does that mean McDonalds bought your TV???? Whether you spent the 400 on Big Macs or a TV, did McDonalds have anything to do with where the 400 originally came from???? Whether McDonalds got the 400, or the TV place got the 400, YOU still had to come up with and pay the 400.


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## Sawmill Jim (Dec 5, 2008)

tgmr05 You get the idea that you are :bdh:


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> I understand where you are coming from, but you have to realize that the company still has to pay 48740 for the employee. While they no longer have to pay the IRS 48740, the company still is the one paying, not John Q Public. The company either pays the IRS or the employee, and the rest of the TAXPAYERS have NOTHING to do with it.
> .


While the company is paying the employee it is the US treasury that isnt getting those taxes so the rest of the taxpayers in the land do without the benefit of those tax dollars and have to make up the diference somehow.Yes in a way we all make that payment when we decide that wages are a ligitamate deduction.


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## zito (Dec 21, 2006)

fantasymaker said:


> While the company is paying the employee it is the US treasury that isnt getting those taxes so the rest of the taxpayers in the land do without the benefit of those tax dollars and have to make up the diference somehow.Yes in a way we all make that payment when we decide that wages are a ligitamate deduction.


You keep mentioning that this is about personal income taxes, not corporate taxes. To someone's personal income tax situation, paying that gardener 40K a year doesn't cost only $400 out of pocket, it costs 40K. The gardener would not be tax deductible as a personal expense. 

So let's decide that the gardener now somehow miraculously -is- tax deductible. Probably he's now a business expense as maintenance on the residence where you do corporate entertaining. Your tax bill does not suddenly drop by the 40K you pay him. Let's use the 35% corporate tax rate mentioned in an earlier post. The 40K paid to the gardener simply goes into the "expense" side of the ledger, and only adds 40K to the total deductibles sum. So paying your gardener 40K will reduce your tax bill by 14K. The other 26K comes out of your/the corporation's pockets.

I'm trying to figure out your reasoning, and I can't entirely believe you're simply not trolling :shrug:


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## tgmr05 (Aug 27, 2007)

The reason the US Treasury is not getting the taxes, is because it is not their money, legally, period. It is not owed, it is not collected, it CANNOT be counted as tax revenue, ever. So, the taxpayers are not somehow having to come up with a shortfall. The only way the taxpayers are shorted, is when someone fails to pay their taxes, or cheats on their returns. Trying to say tax income that is NOT OWED is somehow a shortfall, well, is simply ludicrous. It does make for entertaining conversations, though.

For example, based on that flawed logic, McDonalds has purchased nearly every TV in America.....Now, have they really??????


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> The reason the US Treasury is not getting the taxes, is because it is not their money, legally, period. It is not owed, it is not collected, it CANNOT be counted as tax revenue, ever. So, the taxpayers are not somehow having to come up with a shortfall. The only way the taxpayers are shorted, is when someone fails to pay their taxes, or cheats on their returns. Trying to say tax income that is NOT OWED is somehow a shortfall, well, is simply ludicrous. It does make for entertaining conversations, though.
> 
> For example, based on that flawed logic, McDonalds has purchased nearly every TV in America.....Now, have they really??????


 I didnt mean to imply that the government has a right to that money simply that if the money didnt come from there at some point it has to be made up some where...even if the government keeps living on borrowed money at some point it would have to borrow that much extra.



zito said:


> You keep mentioning that this is about personal income taxes, not corporate taxes.


 Nope I don't think I did say that ,while I did make a mistake in not mentioning at the beginning of the thread I meant INCOME taxes I never meant to exclude corporate taxes since I wanted to explore people thoughts on spending money on taxes verses employees..Although I can see how it would be easy to assume since I made such a major mistake in the OP how I could be off on that one too.



zito said:


> To someone's personal income tax situation, paying that gardener 40K a year doesn't cost only $400 out of pocket, it costs 40K. The gardener would not be tax deductible as a personal expense.
> 
> So let's decide that the gardener now somehow miraculously -is- tax deductible. Probably he's now a business expense as maintenance on the residence where you do corporate entertaining. Your tax bill does not suddenly drop by the 40K you pay him. Let's use the 35% corporate tax rate mentioned in an earlier post. The 40K paid to the gardener simply goes into the "expense" side of the ledger, and only adds 40K to the total deductibles sum. So paying your gardener 40K will reduce your tax bill by 14K. The other 26K comes out of your/the corporation's pockets.
> 
> I'm trying to figure out your reasoning, and I can't entirely believe you're simply not trolling :shrug:


Your logic here is correct in a 35% tax situation you get what is essentailly a 35% incentive to hire.
Thats why I postulated a 99% tax level, to exagerate the effect.


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## Common Tator (Feb 19, 2008)

watcher said:


> From the simple logic only people can work and to produce a good or service. Which means only people can make money therefore only people can pay money to the government, i.e. taxes.


A corporation is a person in the eyes of the law.

http://en.wikipedia.org/wiki/Corporation


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> I didnt mean to imply that the government has a right to that money simply that if the money didnt come from there at some point it has to be made up some where...even if the government keeps living on borrowed money at some point it would have to borrow that much extra.


This, again, shows the flaw. The flaw being, the money has to come from somewhere. What money? The money is not owed, so how in the world is it something that has to be made up? You cannot claim money as revenue that is not legally eligible to be collected. The amount may not be the same, year to year, because tax rates change, business revenue changes, the economy goes up/down, etc. The amount owed is what is due, period. Not what could have been owed, if so and so did not hire someone, or buy another piece of equipment, or whatever.


[/QUOTE]Your logic here is correct in a 35% tax situation you get what is essentailly a 35% incentive to hire.
Thats why I postulated a 99% tax level, to exagerate the effect.[/QUOTE]



Sadly, this is misleading/false. While it sounds good on the surface, it does not take the full picture of what is going on into consideration. See previous posts in this thread. This is one of the reasons so many go out of business. They believe one tiny speck of information is the solution to a problem that requires so much more detailed information about so many other aspects of the business. Thus, they think they are doing something good, yet, once spelled out, either A: realize the truth, that it is misleading information and is bad, or B: go bankrupt under the delusion they are doing the right thing.


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## bowdonkey (Oct 6, 2007)

Sawmill Jim said:


> Well i am sure those Co moving out of the US will volunteer to pay tax. :icecream: Also other people are moving out of the US to less regulated places .:bow:


And if I could convince my wife, I'd be one of those moving too!


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## watcher (Sep 4, 2006)

Common Tator said:


> A corporation is a person in the eyes of the law.
> 
> http://en.wikipedia.org/wiki/Corporation


Funny. . .I've never seen a corporation handcuffed and taken to jail. Have you?


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## watcher (Sep 4, 2006)

bowdonkey said:


> And if I could convince my wife, I'd be one of those moving too!


A lot more people than most people realize are moving out of the US due to taxes.


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## Sawmill Jim (Dec 5, 2008)

watcher said:


> Funny. . .I've never seen a corporation handcuffed and taken to jail. Have you?


No but if laws were followed their CEO would be :flame: Like a parent is responsible for the child


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## watcher (Sep 4, 2006)

Sawmill Jim said:


> No but if laws were followed their CEO would be :flame: Like a parent is responsible for the child


Which is my point. Only people can go to jail and only people can pay taxes.


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## Sawmill Jim (Dec 5, 2008)

watcher said:


> Which is my point. Only people can go to jail and only people can pay taxes.


Got ya :bow: Ever since Ca took that toy out of my happy meal my thinking has been off :smiley-laughing013:


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## bowdonkey (Oct 6, 2007)

watcher said:


> A lot more people than most people realize are moving out of the US due to taxes.


I wouldn't be moving due to taxes. Bad economy and national debt. Yep I'd bail, just like the big boys.


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## pancho (Oct 23, 2006)

watcher said:


> A lot more people than most people realize are moving out of the US due to taxes.


Mexico is one of the most popular spots. Entire cities have been built for those coming from the U.S. who are retired and looking for a place where their money will last longer.


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## megafatcat (Jun 30, 2009)

Does the flu kill? As long as you are a robust adult in good health it is very unlikely. If you are already ill or some outside agency weakens you then it can cause serious harm.
A strong economy can take higher taxes in stride, up to a point. We are not in a strong economy.


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## fantasymaker (Aug 28, 2005)

watcher said:


> Funny. . .I've never seen a corporation handcuffed and taken to jail. Have you?


LOL THATS the point of a corporation..SO THAT NO ONE IS RESPONCEABLE!
Honestly and legally that is the point of a company.


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> LOL THATS the point of a corporation..SO THAT NO ONE IS RESPONCEABLE!
> Honestly and legally that is the point of a company.


Actually, the point of a company is to make money/profit. Without it, the company dies, along with killing off jobs and whatever product or service the company provides.

Incorporating does limit liability, but in no way does it make one completely not responsible.


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> Actually, the point of a company is to make money/profit. Without it, the company dies, along with killing off jobs and whatever product or service the company provides.
> 
> Incorporating does limit liability, but in no way does it make one completely not responsible.


 LOL you miss the point Your right it MAKES THE COMPANY responceable not the investers

LOL Nope no way on that, you can make a profit in a lot of ways but the sole point of a company is to limit liability of the investers (OWNERS). Its just another way to make a profit. Sometimes the only way a profit can be made in something is by limiting the liabilty and getting out with the profits while leaving a mostly assetless shell to absorb the liabiity.
Other than the liability issue a company has many disadvantages, dual taxation, a requirement to be represented in the courts by a lawyer, a unweildy chain of command etc.
Thus the letters Corp.+corperation and LLC= limited liability company, .LTD =Limited(liability)


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> LOL you miss the point Your right it MAKES THE COMPANY responceable not the investers
> 
> LOL Nope no way on that, you can make a profit in a lot of ways but the sole point of a company is to limit liability of the investers (OWNERS). Its just another way to make a profit. Sometimes the only way a profit can be made in something is by limiting the liabilty and getting out with the profits while leaving a mostly assetless shell to absorb the liabiity.
> Other than the liability issue a company has many disadvantages, dual taxation, a requirement to be represented in the courts by a lawyer, a unweildy chain of command etc.
> Thus the letters Corp.+corperation and LLC= limited liability company, .LTD =Limited(liability)


Incorporating does limit liability, but that is not all it does. You touch on some of the other points, but the perspective is a bit skewed. Most folks incorporate their business to protect themselves, and the investors,... not to take advantage of others, etc. 

Some of what you just posted is why folks are in jail, and rightly so, but it is not the way the majority of business owners operate. It is a very perverted way of looking at businesses, and sadly, is what some criminals try to hide behind, instead of facing/owning up to their malicious intentions from the get go. One example is Richard Scrushy of Health South.....He still thinks he did no wrong....

Because of individuals who do think this way, we see them highlighted in the news. You do not necessarily see the rest of the business owners, who will do whatever they can to keep their business running properly, AND will sever ties immediately with folks like that, no matter what it costs them. 

It is common for folks to view business negatively, when that is the only type of business that is typically plastered all over the news, etc. However, it is not the way the majority of business owners operate.


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> *Incorporating does limit liability*, but that is not all it does. You touch on some of the other points, but the perspective is a bit skewed. *Most folks incorporate their business to protect themselves, and the investors*,... not to take advantage of others, etc.


 Yep you got it the point as you say by *"MOST"* is to protect themselves.

LOL if you incorporate to "protect yourself by limiting liability" you are planning to NOT be responsible for the consequences of your actions and foist it off on others. To me that's taking advantage of them.


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> Yep you got it the point as you say by *"MOST"* is to protect themselves.
> 
> LOL if you incorporate to "protect yourself by limiting liability" you are planning to NOT be responsible for the consequences of your actions and foist it off on others. To me that's taking advantage of them.


So, using that method of thought, no one should buy car insurance, nor use seat belts. After all, they are planning to NOT be responsible for the consequences of their actions and foist it off on others. In other words, taking advantage of them.

As stated, it is a perverted/twisted train of thought, and presumes evil intentions.

Are there folks who drink and drive? Road rage? Is it everyone? Should we assume everyone is out to get us, run over us, kill us with their poor driving skills, run over babies, smash through houses, run into grandma, etc? It does happen, though, does it not?

If you understand the RISK associated with being in business, you understand the NEED for incorporation, especially in today's litigious society. It is not about taking advantage of others, unless you have evil intentions, and personally, I would never assume that of EVERY business owner - but apparently, there are those that do.... Just as I am not afraid or worried about every driver, but there are some folks who are....


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> So, using that method of thought, no one should buy car insurance, nor use seat belts. After all, they are planning to NOT be responsible for the consequences of their actions and foist it off on others. In other words, taking advantage of them.....


That's exactly backwards of how I would think of it. 
In those cases buying insurance would be planning to BE responsible and capable of taking care of the results of your actions.



tgmr05 said:


> As stated, it is a perverted/twisted train of thought, and presumes evil intentions.....


Nope its simply the truth...and you stated it






tgmr05 said:


> If you understand the RISK associated with being in business, you understand the NEED for incorporation, especially in today's litigious society. It is not about taking advantage of others, unless you have evil intentions, and personally, I would never assume that of EVERY business owner - but apparently, there are those that do.... Just as I am not afraid or worried about every driver, but there are some folks who are....


Right the risk causes you to not want to be responsible for your actions so you foist it off on the victims.Its sorta like backwards insurance, the victim doesn't get anything for what you do to harm them it simply guarantees they cant get anything from you.
Its not like people with evil intent can just take your stuff cause you are in business. For someone to get your stuff they have to go through the legal process so if in fact they get your stuff its because the courts found that you did wrong and are responsible.

LOl I think we are far afeild from the original thread as flawed as that was, mybe time for a new one?


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## Sawmill Jim (Dec 5, 2008)

I think you never been in any kind of business of your own . Even small scale business if someone enters your property and stubs their toe they can sue you . If it is in a LLC they can't go for your house . Even forty no trespassing signs don't protect you :flame:


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## fantasymaker (Aug 28, 2005)

Whats your point? That you should some how not be responsible for their injuries just cause you are in business?


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## Sawmill Jim (Dec 5, 2008)

fantasymaker said:


> Whats your point? That you should some how not be responsible for their injuries just cause you are in business?


My point is if you are to stupid to watch where you walk you should stay at home and if you are trespassing should be shot not rewarded .


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## fantasymaker (Aug 28, 2005)

Sawmill Jim said:


> My point is if you are to stupid to watch where you walk you should stay at home and if you are trespassing should be shot not rewarded .


Kinda rough on those that cant read.
I take it you have never stubbed your toe, thus you are not including yourself in those you call stupid?


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## Guest (Nov 13, 2010)

Liberals in charge get this country in a financial mess because they never can understand how money works.

Regardless of what kind of taxes we are talking about, personal or corporate, the results are the same.

Each dollar left in circulation generates something like $10 for the Treasury.

Take a dollar out of circulation, and the Treasury doesn't gain $1. It loses $10.



JJ Grandits said:


> The one that gets me is that Corporations don't pay taxes.


BWAHAHAHAHA. 

U.S. Companies Pay the Highest Taxes in the World

This is one of the reasons factories keep moving offshore.



Bret4207 said:


> If you hire me for $10.00 an hour it's probably costing you more like $25.00 an hour to have me working there.


True!

My brother works for a corporation. He climbed the ladder from the bottom, and is now in a high position, with an office and a secretary and everything.  

In his position, he is in charge of the financial operations for the entire company. It sure has opened his eyes. He has been able to explain it well enough to us peons so we can understand better how it works.

Here is an example.

Let's say you have three workers, each working 40 hours a week at $10/hr. Do the math- this is $1200 paid out in salaries.

Now the economy has a financial slump (or your corporate taxes were raised!!). You lay off one worker. But you give the other two workers overtime so that you don't lose production.

Now do the math.

2 workers, 80 hours regular time = $800 a week.

2 workers, each gets 20 hours overtime at $15 an hour. This is 40 hours @ $15 for a total of $600.

$800 + $600 = $1400.

On the surface, it looks like it is costing you an extra $200/wk for laying off one worker.

But in reality, it's costing you LESS because you're paying taxes, insurance, etc on two workers instead of three.


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## Sawmill Jim (Dec 5, 2008)

fantasymaker said:


> Kinda rough on those that cant read.
> I take it you have never stubbed your toe, thus you are not including yourself in those you call stupid?


Yep i get a case of stupid now and again :bouncy:
I nipped the corner off one my fingers on my 52" saw who should i sue the one made the saw ,the complete mill or you for not telling me to not do it :cowboy: 

Sometimes stupid can kill you,people do it every day .:help:

Had a cable across the drive with a sign on it guess the guy couldn't see the cable or beware of dog or the dog on a chain . So this blind fellow climbs over the cable gets with in inches of my dog that is snarling and growling and says will that dog bite :grumble::grumble: I said you got to be crazy what do you think mister :cowboy: 

Makes you wonder how some have lived as long as they have .

When i want people that are stupider than me at my sawmill i'll send out written invitations .


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> That's exactly backwards of how I would think of it.
> In those cases buying insurance would be planning to BE responsible and capable of taking care of the results of your actions.
> 
> 
> ...


QUOTE=fantasymaker;4748386]That's exactly backwards of how I would think of it. 
In those cases buying insurance would be planning to BE responsible and capable of taking care of the results of your actions.



Nope its simply the truth...and you stated it






Right the risk causes you to not want to be responsible for your actions so you foist it off on the victims.Its sorta like backwards insurance, the victim doesn't get anything for what you do to harm them it simply guarantees they cant get anything from you.
Its not like people with evil intent can just take your stuff cause you are in business. For someone to get your stuff they have to go through the legal process so if in fact they get your stuff its because the courts found that you did wrong and are responsible.

LOl I think we are far afeild from the original thread as flawed as that was, mybe time for a new one?[/QUOTE]


Here is a dirty little secret, Business owners are some of the few who WANT TO BE RESPONSIBLE for their actions. If their company does what it is supposed to do - make money and turn a profit - then the owner gets to keep it. The risk comes in employing others and getting them to do what is necessary to make the company run properly, purchasing equipment or products to provide services or products, and trying to collect from those who wish to buy/use their goods and services - not to mention protect from those who wish to sue over every little inconvenience imaginable, and take everything you own. 

The purpose of a company is far from taking advantage of folks, it is to make money. Viewing things as you do, anybody who has any money invested in any type of retirement account is doing the same foisting of responsibility to victims, as they are technically part owners of the corporation. Is that what you really believe??? Are folks with 401K instead of social security only trying to take advantage of victims? You do realize a very large chunk of retirement portfolios are based on incorporated businesses???? I am a little confused on this victim thing. Who exactly are the victims? The stockholder? The customer? The client? The supplier? The idiot who burned his lap with a cup of coffee?


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> Right you keep making my point. You may be in business in lots of ways but incorporating is the only way to limit liability.
> 
> 
> 
> ...


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## beowoulf90 (Jan 13, 2004)

fantasymaker said:


> Kinda rough on those that cant read.
> I take it you have never stubbed your toe, thus you are not including yourself in those you call stupid?


I take it you have never been sued by a trespasser on your property.

I've had people climbing in an old building from the 1880's that isn't structurally sound, even though I had multiple signs and Caution tape around the building..

What would have happened had it collapsed on them?
They or their parents would have sued, yet these people were there without my knowledge or permission.. The worse part is some liberal judge would probably awarded them some insane amount and I would have lost my home and property.. 

So the criminal has more rights then the property owner, imagine that! 
Typical liberal idea...


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## fantasymaker (Aug 28, 2005)

beowoulf90 said:


> I take it you have never been sued by a trespasser on your property....


 Well yes knock on wood o far I have missed that particular fun.
Believe it or not here in IL the sue capital of the world there is a law to protect you from suit from those that didn't pay to be on your property and are engaging in recreation.



beowoulf90 said:


> I've had people climbing in an old building from the 1880's that isn't structurally sound, even though I had multiple signs and Caution tape around the building..
> 
> What would have happened had it collapsed on them?
> They or their parents would have sued, yet these people were there without my knowledge or permission.. The worse part is some liberal judge would probably awarded them some insane amount and I would have lost my home and property..
> ...


Good grief you have set yourself up for a suit. You know the building is unsafe and yet you haven't fixed or removed it. A bit of caution tape wouldn't mean a thing to anyone that cant read (kids) a good 8 foot chain link fence might be a better deterrent and better protect YOU in court.

I believe this is whats known as attractive nuisance. 

This is the perfect example of how a corporation would be used to protect you from liability while foisting the costs off on the victims. You incorporate the property for $100 and thus save the $1000 a good fence might cost or the $5000 a demolition might cost or the $10,000 a restoration might cost.
Meanwhile a Kitten gets loose from a kid and 6 of then go in the building to get it out. It collapses like you have foreseen and costs their parents hundreds of thousands in medical bills.
But your safe from loss of anymore than the property and its saved you the$1000 a good fence would have cost.


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## beowoulf90 (Jan 13, 2004)

fantasymaker said:


> Well yes knock on wood o far I have missed that particular fun.
> Believe it or not here in IL the sue capital of the world there is a law to protect you from suit from those that didn't pay to be on your property and are engaging in recreation.
> 
> 
> ...


No I didn't set my self up for a suit..

This is the the stone walls of a Flint Mill, no where near any road. It sits along the creek that powered it.. If trespassers would stay off the property then there wouldn't be a problem.. I did remove that Delta Gray slate roof and timbers that covered it.. I do own a historic property, my home was built before the Revolution.. I have a Iron Furnace adjacent to my property and own the Iron Masters home.. The Flint mill was built in 1880 and destroyed in 1884 by a flood.. I still have pieces of quartz the size of the hood of my truck... Perfectly smooth on one side, the side against the grinding stone(s)..

Now as I said this isn't on the road, that would have been the grist mill which I knocked over for safety's sake..

So anyone at the Flint mill is trespassing and violating the law.. Yet I would be held liable for a criminals stupidity...


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> Right you keep making my point. You may be in business in lots of ways but incorporating is the only way to limit liability.
> 
> 
> 
> ...


Incorporating is only part of limiting liability. Purchasing general liability, workmans compensation, and other insurances are what really help limit liability AND help protect anyone else, too. 

Most companies, businesses, home owners, government contracts, etc. require that you be incorporated and have proper workman's compensation as well as general liability insurance before doing any work. Why??? Not because of the limited liability aspect to the owner, but to protect themselves in case of accidents, etc.

If you hire someone to come cut your grass, and they are not incorporated, nor do they have any insurances, they will be less expensive to hire. The downside is this - if they accidentally slip in your yard, causing their foot to slide under the mower, cutting off a toe or two, thus losing control of the mower which proceeds to your neighbors house and runs over their prize dog- guess what, you are liable. How's that limiting liability aspect of incorporating working out for you now??? Not only are you liable for the injuries of the person working in your yard, but you are now responsible for the neighbor's dog, too, since you hired that person. Kind of makes your point totally moot, does it not? You are more likely to become a 'victim' if someone is not incorporated, than you are if they are.

If you do not understand this point, check with any of your local federal government buildings, and see what they require for any business to do work for them. You must be incorporated, have general liability insurance with a minimum 2 million dollars coverage, and have workman's compensation insurance for everyone. You have to send in proof of such, before you can work on the property. 

While you are correct that limiting liability is part of incorporating, you are mistaken as to why folks do it. Otherwise, why would anyone want to invest in a company that intends to take advantage of folks. 

The limiting aspect is to keep one from losing their house, if they did not use it as part of the initial capital investment, nor borrow against it. It also protects their children from having the clothes taken off their back, and the food from their mouth. It does not keep the owner from any liability, though. They can lose everything they put into the company, AND what they got from the company - say that boat, car, airplane, etc, the company bought for them.....


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> Incorporating is only part of limiting liability. Purchasing general liability, workmans compensation, and other insurances are what really help limit liability AND help protect anyone else, too. .....


All of these are available to a private individual.
the only unique thing to a corporation is it stops liability at the corporate assets.

I have worked for many agencies of the federal and state government and NEVER seen a requirement to be incorporated . What I have seen is almost universal requirements to be insured.
In the mowing case you site having hired a incorporated business would set you up for the loss if the mowing corporation wasn't insured enough. A private individual on the other hand would also have his assets standing between you and suit in ADDITION to his insurance.


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## fantasymaker (Aug 28, 2005)

beowoulf90 said:


> No I didn't set my self up for a suit..
> 
> Now as I said this isn't on the road, that would have been the grist mill which I knocked over for safety's sake..
> 
> So anyone at the Flint mill is trespassing and violating the law.. Yet I would be held liable for a criminals stupidity...


LOL your worried about it right? Any good lawyer would use that as proof that you yourself don't think you have used enough precautions.
As for the whole criminal thing I'm not sure about where you live but in some places kids,lost people and others wouldn't be considered criminals for being on posted property.
Its hard to belive but here in IL you would be protected from suit if a mushroom hunter or such wandered across your place and hurt them selves....hard to belive Il has more reasonable laws than anywhere else.


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> All of these are available to a private individual.
> the only unique thing to a corporation is it stops liability at the corporate assets.
> 
> I have worked for many agencies of the federal and state government and NEVER seen a requirement to be incorporated . What I have seen is almost universal requirements to be insured.
> In the mowing case you site having hired a incorporated business would set you up for the loss if the mowing corporation wasn't insured enough. A private individual on the other hand would also have his assets standing between you and suit in ADDITION to his insurance.


Incorrect. If they do not have insurance, it falls on you, the property owner. They do not necessarily stand between you and suit. You can try to sue them, though. And just how many assets do you think a non incorporated, non insured individual has? Do you think they even own much??? You like going after little Susies wardrobe, toys, and food? Taking away her shelter, etc.? 

Either way, you are better off doing due diligence and making sure whoever works for you has insurance. And if a corporation, the limiting liability, in most cases, is not protecting that much - unless it is a very large company, of which there are not exactly many. In the case where significant assets are at risk, you can be assured insurance is also purchased, whether incorporated, or not. Once again, you presume folks are trying to take advantage of others, when they are simply trying to protect themselves. It is simply not true of everyone. There are people out there that give corporations, etc. a bad name, and hopefully all will get their just rewards in time.


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## tgmr05 (Aug 27, 2007)

Something else, even if you incorporate, you are not necessarily always covered by the limited liability. Examples:

# you have signed a personal guarantee for a loan

# personally you have injured someone

# you have acted in an irresponsible or illegal manner

# you do not operate your business as a separate entity 

In all these cases, the owner can still be held liable. So, incorporation does not automatically make you untouchable. You must be responsible with how you run the corporation, and you should purchase general liability/workmans comp insurance. I am pretty sure that most if not all states REQUIRE you purchase Workman's Compensation insurance, but not necessarily general liability - if you are a corporation. Most contracts, businesses, government entities, private folks needing work, etc. do REQUIRE it, so a RESPONSIBLE corporation has them.

So, just becoming incorporated does not necessarily limit all liability and foist it to whoever/whatever victims one may think are out there.


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> Once again, you presume folks are trying to take advantage of others, when they are simply trying to protect themselves.
> .


But what they are trying to protect themselves from is the possibility of having to be responsible for their actions.
I bet lots see it as you do simply being responsible to those around you like your family. But in the end what is it you are protecting yourself against? The consequences of your actions.
I believe most don't incorporate with malice towards others,its not that most corporations are formed intending to take advantage of others its simply a mater of seeing it like you do "I'm protecting myself" But what your protecting yourself from is having to pay as much as you can to make right something you did.
Your saying something sorta like this.
"Id rather they suffer than me"
"I don't care if I do ruin someones life Id rather keep my house car and boat than help alleviate their sufferings as much as I can."


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> But what they are trying to protect themselves from is the possibility of having to be responsible for their actions.
> I bet lots see it as you do simply being responsible to those around you like your family. But in the end what is it you are protecting yourself against? The consequences of your actions.
> I believe most don't incorporate with malice towards others,its not that most corporations are formed intending to take advantage of others its simply a mater of seeing it like you do "I'm protecting myself" But what your protecting yourself from is having to pay as much as you can to make right something you did.
> Your saying something sorta like this.
> ...


In the end, what you are protecting yourself against is the litigious society we live in. There are convicted criminals who have killed young children, suing the dead child's parents for allowing their children outside on a bike without a helmet. Now, is the parents concern mostly to protect themselves, or simply to make sure they do not have to pay the most to make right something they did? You must live in a fantasy land if you do not understand the nature of our litigious society.

Id rather they suffer than me? I do not care if I ruin someones life Id rather keep my house car and boat than help alleviate their sufferings as much as I can? Not even close. That is why responsible folks have insurance, as well. It not only protects the owner of the corporation from liability, as it provides coverage for accidents, it protects those who get harmed.

Honestly, they way you just lumped those who incorporate - about how they are saying something like that is quite offensive. You are presuming they do not care. That is simply, well, to put it nicely, false. You need to have more faith in your fellow man. If you ran a business, is that the attitude you would have???? Would you jeopardize everything your family has - to pay for a mistake your employee made? An employee trying to get even with you for making them do something they did not like, as in telling them they cannot miss another Monday - due to their inability to show up 9 weeks in a row after a weekend of partying - or they may be put on probation? Do you really think the employee will be held responsible, even if the truth is presented? Or do you think the employee will sue for pain and suffering for forcing them to work which led to the accident... Oh, and look again at what can cause limited liability aspects for incorporation to not apply. Hmmmm. Can it be any more clear that what you are positing is simply not true? The corporation protects the owner, only if the owner does things right. The owner is responsible for all the employees, all the accidents, etc., whether they - the owner - are personally involved, or not. Get it now???? It is about protection, pure and simple. It is not about not caring about what happens......


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> Hmmmm. Can it be any more clear that what you are positing is simply not true?......


 My posting is fact
Your postings are simply your feelings, I keep trying to explain why they are inaccurate


tgmr05 said:


> The corporation protects the owner, only if the owner does things right. The owner is responsible for all the employees, all the accidents, etc., whether they - the owner - are personally involved, or not. Get it now???? It is about protection, pure and simple. It is not about not caring about what happens......


What you don't seem to get is the protection they take in this case IS about deciding its better for someone else to suffer more so they suffer less for what they have done.Its the ONLY thing a incorporation offers that nothing else does. 
You keep going on about the litigation in our world like going o court makes you a shyster. People wouldn't have to go to court to get relief from their losses if everyone was honorable and willingly paid for the damage they do. 
I don't see that happening do you?
I suppose you could say incorporation gives them the choice of how much they pay after all they could willingly give up any of the protected assets to help someone they have hurt,BUT I just don't see that happening much Do you?


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> My posting is fact
> Your postings are simply your feelings, I keep trying to explain why they are inaccurate
> 
> 
> ...



Let us go over this in more simple terms, so it is very clear.

When an individual incorporates, they do receive the benefit of limited liability. This covers them from things that not only they may do, but also ALL the employees, etc. inside the company. Now, look again at the FACTS concerning what keeps an employer from being protected.

# you have signed a personal guarantee for a loan

# personally you have injured someone

# you have acted in an irresponsible or illegal manner

# you do not operate your business as a separate entity 

These are not feelings, these are facts. These keep an employer from doing what you posit, which is foisting problems on to others intentionally.

Now, to clear up the whole - keeping one from not paying as much as they could -, the FACT is that insurance does this. Not taking out an insurance policy is much more in line with what you are thinking/feeling/upset about incorporation, not the incorporation itself. Not taking out a policy really limits what someone can get, whether you incorporate or not. If you have nothing, you risk nothing, and you can pay nothing for your actions, so you are foisting the responsibility for your actions on others, and you are not paying what you should for the damages......This is why purchasing workman compensation insurance is REQUIRED for those who incorporate...

Once again, you fail to see the forest through the trees...... You are taking one small part, twisting it to fit your feelings, and trying so hard to make it apply to everything. While you are partially correct, you miss the mark by a mile.

To sum it up in a way you can understand clearly and factually, The point of incorporation is similar to insurance, in that you not only hope to never need it - You INTEND to never need it. But you have it, just in case you wind up with those one in a million kooks who wants to sue you, or you wind up with bad employees.. Plus, sometimes, accidents happen, you do not plan on them, you do intend for them, they just occur. You do not buy car insurance because you INTEND to wreck the car and not pay for it, just like you do not incorporate because you INTEND to foist the responsibility for your actions on others...but you have both, just in case something happens.

Now, it does happen sometimes, does it not - someone gets insurance because they want to avoid making payments, someone incorporates in an attempt to hide/protect their assets? But it is the person, not the incorporation, nor the insurance, that is the problem.


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## fantasymaker (Aug 28, 2005)

tgmr05 said:


> Now, to clear up the whole - keeping one from not paying as much as they could -, the FACT is that insurance does this. Not taking out an insurance policy is much more in line with what you are thinking/feeling/upset about incorporation, not the incorporation itself. Not taking out a policy really limits what someone can get, whether you incorporate or not. .


:bdh:

Once again you have it backwards.Insurance does not keep one from paying as much as they can.It adds to the amount they can pay. Hopefully adding a amount that is large enough to cover any liabilities BEFORE they reach a amount that would eat into the assets you are trying to protect.

Your right certain actions can pierce the veil of corporate responsibility.
That doesn't change the one simple thing that incorporation does that no other way of organizing your business does.
It limits liability.
Its the only unique thing about incorperating.
Yet for some reason your trying to convince me and others that its not really important and people incorperate for all sorts of other reasons.


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## tgmr05 (Aug 27, 2007)

fantasymaker said:


> :bdh:


Yep, I agree, probably time to put away the stick.


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