You're not missing anything. You're probably on your way out of business, unless some entity is going to come to your aid.Originally Posted by Johns
You're not missing anything. You're probably on your way out of business, unless some entity is going to come to your aid.
Well, yeah...that's what I'm saying in response to the
"Again, you hire people with revenue, not profit. So the effect is lowered. Some places may hire an additional person to drop that profit from $265,000 to $249,000 to save taxes."
comment by For-Life.
If you're going out of business, how are your revenues going to help you to hire more people? Someone that looks only at revenue is known as a "former business owner."
And how does a comment that makes absolutely no sense "take away our fun"?
This is all like the "King's New Clothes" where nobody will say that he's naked.
Ophthalmic Optician, Society to Advance Opticianry
he has not gotten rid of the do nothing republicans yet
Agreed, if you're going out of business, you're not hiring. However, if I'm not mistaken, Amazon.com was doing quite a nice business without showing a profit for several years. So it's possible, difficult, but possible to stay in business and to expand a business without showing a profit. A good account and your write-offs negate your tax liability. I'll never forget sitting in the Army-Navy Club at Farragut Square in DC, listening to 4 gentlemen in hand-tailored suits chuckling about collecting Social Security and Medicare benefits, because their businesses owned everything. They did not show anything more than the minimum income allowed by Social Security.
Who's not having any fun anymore? The Republican Party who squandered their popularity and paid a dear political price for it. They are so bitter that I'm certain they'll find a way to connect President Obama to the Lindberg kidapping.
You only need to look at the comparative size and scope of the New Deal and then add the GI Bill to appreciate the role government must play in todays' economy. We may not all agree with the current plans and ideas, but we can neither stand still nor move backwards. I voted for President Obama and I'm proud of the stance he is taking and I'm willing to do what ever is necessary to get this great democratic experiment moving again.
Judy,
I'm am only addressing the absurd inference that profit is not relevant.
In your "Awwwww, you're taking away all their fun." comment, you quoted For Life's comment about revenue/profit. I took as your agreement w/ her statement.
Why the sour grapes (still). You guys won, and are having your way, but seem to continue to look in the rear view mirror for someone to blame when it doesn't work.
"Who's not having any fun anymore? The Republican Party who squandered their popularity and paid a dear political price for it. They are so bitter that I'm certain they'll find a way to connect President Obama to the Lindberg kidapping.
I voted for President Obama and I'm proud of the stance he is taking and I'm willing to do what ever is necessary to get this great democratic experiment moving again."
BTW, I'm still having fun.;)
[IMG]file:///C:/DOCUME%7E1/Admin/LOCALS%7E1/Temp/moz-screenshot.jpg[/IMG]
Ophthalmic Optician, Society to Advance Opticianry
Me too! Even with W at his most inane, I could still turn to Jon Stewart to save my sanity. :bbg:
Businesses do not pay income taxes if they take a loss. Taking a loss is supposed to be punishment enough. You pay the income tax on profit. So basically, you probably have to take in revenue around $2.5 million to take in a profit of $250k.
You are not going out of business if your profit is $250k. You do know the difference between revenue and profit?
Yes, I think I know the difference, but this statement tells me that one of us may not...
whatever you say...
Ophthalmic Optician, Society to Advance Opticianry
Johns, I presented to you a case of a $250k profit. You then turned that into revenue and showed a net loss. If you are taking a $250k profit, you are not taking a net loss. You cannot take a net profit and net loss at the same time.
So if this is my income statement:
Revenue $2,500,000
COGS $1,250,000
Salaries and Wages $500,000
Building and Rent $500,000
Net Profit = $250,000
I pay the taxes on the profit, not the revenue. So if the tax rate is 25%, I pay 25% of $250,000, not $2,500,000 ($62,500). That means, I walk home with $187,500.
So how is someone making $250,000 profit going out of business?
Otherwise, tell me what on my statement did not say what I just said above
"Otherwise, tell me what on my statement did not say what I just said above"
Never mind. If you don't know, I can't tell you. My brain is getting numb.
Thishas turned into a circle...
Ophthalmic Optician, Society to Advance Opticianry
Johns, what I meant by that is salaries are paid out before profit. Salaries are an expense. Therefore, salaries will lower your profit.
So, if you subtract the money from salaries, it will lower your taxable income. Instead of paying it out of profit after taxes.
That exactly right, it's an experiment that is going saddle many future generations with this out of control spending. 2010 budget almost 4 trillion dollars. I honestly hope it works because since Hillary is beging China to by more of our debt to cover this spending if we default on our payments we may all have to learn how to speak Chinese.(tung & cheek)
Preface: I realize either candidate would have done something similar...
The $800 billion bailout has me appalled. We've just spent close to $3,000 for every single American- to do what? You can't spend yourself out of a recession (which was the first Bush's point- and one of the reasons he didn't get re-elected).
Imagine if your own financial situation was dire. You've overspent, and perhaps made some bad investments- and now its time to pay the piper. But, rather than dig yourself out, you take on a 3rd, 4th, and 5th mortgage on your already over-levereged home.
It doesn't make sense for a country's, either.
Also a little silly to think raising taxes on someone making $250k a year will in any way offset this orgy of spending.
Like I said, we were doomed for this either way the election went- so I'm not disappointed in Obama per se.
http://www.timesonline.co.uk/tol/com...cle3419840.ece
What could have been done with this money at home? We can only wonder.
I am disappointed with the size of the deficit from the budget, but I am assuming part of it is the stimulus. Personally, from my knowledge, the leave everything alone approach would have doomed us. While more debt is not attractive (and hey, I have spoke out against the debt here for years), it is better than the alternative of no stimulus. With that said, his deficit is still high. I am really hoping that things work out and in the next few years, he does cut back the deficit like promised. It needs to be controlled like it was in the 90s.
Now, with that said, I am not really happy with the alternatives presented by the other side. On one hand, we have a group of individuals who want to do nothing at all. That, to me, is the scariest of the approaches, because if nothing stops the recession from proceeding (or slows it down), it will just snowball. On the other hand, we have a group that wants the stimulus, but for it to be mostly tax cuts. Well if you ask me, the stimulus has too many tax cuts as it is. Actually, I am critical of him for the tax cuts. I would rather see no cuts or allocate those cuts to infrastructure spending. I am a firm believer than the equal dollars properly allocated in tax cuts will have a weaker effect than the same dollars properly allocated in spend. But, he is trying to compromise. Offering 35% tax cuts to throw a bone to the Republicans who do not even have real power in congress is far more than what previous Presidents would have done.
So in the end, what is really the alternative being presented here? Seems like a bunch of people are just angry (and rightfully so) and do not really trust anything.
Now, onto what I like. I am really have been happy with his form of leadership. The town hall meetings, going to congress to talk to the other side, and explaining things in logical/understandable terms. He is not throwing out words and ideas that are used to confuse the public so we do not know what the government is doing. How he presented himself on Tuesday in Congress was amazing in the way that he was very clear with his message. This is something Clinton, McCain, Bush, Reagan, Jindal, Gore, and most other politicians there do not do. He is not using the whole bully approached used by previous predecessors. He is showing modern leadership. That side alone, he deserves an A. His policies, on the other hand, will take time before they can receive a grade. If he continues with huge spending increasing every year, it will definitely not be a good policy grade.
People hate when I say this, but once this recession crap is over, he should raise the taxes of everyone over $40k. Either that, or introduce a federal sales tax. Until the nation can get itself into a solid financial position, it should not be cutting anymore taxes. Once some of the debt is paid down and there are regular surpluses, then the taxes could be chomped down.
Of course, the same can be said with big spending. Yes, I believe in some programs like health care, welfare and education, but if items do not fit specific mandates, they should go. Government departments do not have to be axed, but the fat and bureaucracy can be cut.
If I may be so bold to give my take on what I think Johns was stating. For-Life, try sitting to the right in your chair a tad, and then explain to us how a business that looses $25,000, as in Johns example can afford to hire based on its " revenue?" So if I increase my revenue next year by $1,000,000, but my costs of doing that increase by almost said amount, I should hire 4 people?
Try running your household the way you think a business should be run, and see where that gets you.
Taxable pure profit is what is left after you get your shot at the IRS for your business, and then you still pay.
I don't think you understand what I am trying to say at all.
First off, we are not talking about businesses that take in a loss. We are talking about businesses that take in $250k profit and how the discontinuing of the Bush tax cuts will affect them. You would not hire more employees if you were taking in a net loss and I never indicated that you would. We are ONLY talking about profitable businesses and how hiring employees is actually calculated.
What I was saying to Johns is you do not have your profit, pay your taxes and then hire your employees. Your salaries are an expense that will determine your taxes and thus determine your profit.
So, lets say you take in $4 million in revenue. Your expenses are $3.6 million. If the tax rate is 25% and you have a $400k profit, at the end of the day, your net profit after taxes is $320k. Now, lets say you decide to hire all employees with 100% of that profit at $40k each, you would have 8 employees. Now, you have $0.
What I am saying is it does not work like that. What happens is you hire the 8 employees out of your expenses. So if you still hired 8 employees, and all other things are equal, you would raise your expenses by $320k. Thus, your expenses would be $3.92 million (up from $3.6). That means your profit is $80,000 before taxes. You take what ever off from taxes, even if it is the same rate (which it will actually be lower now, because your profit is less), so with the same 6 employees would have $60k left over instead of $0.
That is how it is calculated.
and no, I am not telling you to hire 6 employees. I was just using that to show you the calculation.
Wow! You've got this whole tax thing figured out.:hammer: I was making $320K just fine, and I decide that is too much because I have to pay income tax on it, so I hire more employees( most likely not needed, as I already made $320K without them), to reduce my tax burden. Now I make $80K, but have a boat load of employees, social security taxes, un-employment tax, disibility tax, payroll expenses, and the list go's on and on.So, lets say you take in $4 million in revenue. Your expenses are $3.6 million. If the tax rate is 25% and you have a $400k profit, at the end of the day, your net profit after taxes is $320k. Now, lets say you decide to hire all employees with 100% of that profit at $40k each, you would have 8 employees. Now, you have $0.
What I am saying is it does not work like that. What happens is you hire the 8 employees out of your expenses. So if you still hired 8 employees, and all other things are equal, you would raise your expenses by $320k. Thus, your expenses would be $3.92 million (up from $3.6). That means your profit is $80,000 before taxes. You take what ever off from taxes, even if it is the same rate (which it will actually be lower now, because your profit is less), so with the same 6 employees would have $60k left over instead of $0.
Now I make $80K, a tad less than the $320K,;) even after paying taxes, and I should feel like I'm better off? This is not the government, this is real. We need to make a profit to exist, and can not run in a deficit ever. Employees are hired based not off of revenue, but off of profits. If we aren't making money, we can't afford to hire, period.
why are you twisting my posts? I made it VERY clear that I am not telling you to hire new employees, but instead using the situation as an example,
Yes, you will still pay payroll taxes, but I have said over and over again that we are talking income taxes.
And if you read my example again, you are not making less than $320k. Read it again, PLEASE. You are in the same situation where you are hiring new six employees. I am just showing the way that people are fudging it and what is really happening.
Please read my post again, and read it carefully without the intention that you are trying to oppose my opinion or twist my words. Because I am tired of being told that I am saying something that I am not saying.
And in a roundabout way, For-Life, by using this $250,000 number the economy should be somewhat stimulated because these businesses that float around that number would increase expenses (buy more machines, upgrade stuff, hire new people) in order to keep below that mark?
And for the record, I'm not saying that these companies alone will bring around the economy. Rather they will be a piece in the puzzle.
good thing I looked before I left for work
In theory, if you know the profit will be of an exact certain amount and you can figure out that the purchase will be less than the tax payout, then of course. In some cases, it will be cheaper to pay the additional taxes.
But humans are not machines. We can map out all of the theory in the world, but when it is applied to humans, it is always subject to emotional changes (we are not 100% rational).
Make me vomit. When your democrates added 8000 earmarks to the omnibus bill, tell me why do we have to increase taxes? Why are we adding more programs and government spending? Let me see, would it be to make sure more people go on the government dole? I don't have to pay for medical insurance, college, my home(if foreclosed on). When more people are taking money from the government because it easy, I guess we should taxes on those people still working, paying their bills(take responsiblity for them), saving for college for their kids and encouraging them to responsible for their own education. I find it remarkable that people forget that the orginial "New Deal"took over 10 years to resolve anything and we had WWII to help.
As for businesses, tell me how many of you work for doctors? Do you think if they are taxed higher, you will get something from them in raises,bonus, or incentives. How about sucessful labs who are taxed higher, are any of you going to loving the increase in your cost of goods? How many high end opticals are going to love losing money because the wealthy patients have less money to spend on 1500.00 frames?
I realize that alot of the crew here love Obama, because he promised change, but have you really looked at the change, and thought how in the long run it will achieve little.
christina
ps I did GW to expand the government and spend too much money too
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