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Discussion Starter #1
I couldn't find this answer and I need it for a speech for class.
Thanks,
 

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You're new at this, aren't you.

<b>ALL </b> taxes are passed on to the consumer.

Businesses *collect* taxes, governments *spend* taxes, and assholes like you and I who are stupid enough to have jobs *pay* taxes.

Need any more Civics Lessons?
 

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Discussion Starter #3
Thanks for the quick response Andrew. I don't know that anyone can add anything to that, I think you spelled it out right to the letter.
Thanks!
 

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Any number of taxes, licencing fees, etc... have been created with the intention of taxing "those money grubbing corperations" while sparing Mr. John J. Taxpayer his hard earned money. However, these taxes are always taken into account as operating costs, which must be recouped for a business to make a profit. Therefore, as Mr. Caple said, all taxes are passed on to a consumer. However, I just wanted to clarify that corperations are separate legal entities under the law, and therefore subject to taxation in their own right. This is probably the only drawback to incorperating as a business: double taxation (you must pay both individual taxes and corperate taxes).

It just sounded in his post like corperations only "collect" taxes from consumers, which isn't, strictly-speaking, true.
 

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Ebaines said:
However, I just wanted to clarify that corperations are separate legal entities under the law, and therefore subject to taxation in their own right. This is probably the only drawback to incorperating as a business: double taxation (you must pay both individual taxes and corperate taxes).


Double taxation is true of C corperations, but not true of S Corps or LLCs. Both of these type companies pass all profit or loss into the name of the stockholders for tax purposes. In fact, All profit from these these companies is also FICA tax free. Saving you over 15% taxes.

I never thought that Accounting degree would come in handy.
 

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Funny you'd mention that, Todd.. I was going to post a similar thing, but you said it much better.

I just incorporated my business and my accountant is telling me that I"ll save a TON of money as an S-corp. Last year I paid $12,000 (approx) in self-employment related taxes (income, FICA, etc. etc.)... he did a quick re-figure for me, and if I would have been incorporated, I would have paid less than $7,000 in taxes!!

Put it this way:
My monthly salary is now $500, of which all but $1.75 goes to withholding taxes and to pay corporate taxes. Yes, I actually get a check for $1.75 every month. :)

I pay myself $250/month in RENT for my home office. that's taxable but not nearly as much as income tax.

I reinburse myself for any corporate expenses that I incur on its behalf.... including mileage at .345/mile... (that trip to AutoZone? Oh yeah, that was a BUSINESS trip. :))

After that I get "distributions" whenever I want them. Since I"m the only shareholder (also the CEO, Chairman of the Board, President and Secretary) I get any profits from the company. Those profits are AFTER TAX, of course, but corporate tax is less than income tax (especially considering the FICA).
Of course distributions are really where I get my money to live, etc.
 

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Turbo-Less
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Oh yeah, going back to the OP
Andrew is RIGHT... but Player's question is a bit vague..

What do you mean by "passed on"? "Passed on" as in PAID by the manufacturer and then the consumer pays it to the manufacturer? That's what I would think.

In other words, the tax is IMPOSED on the manufacturer but PASSED ON to the consumer.

I've found a couple different links and they have conflicting information... one says the manufacturer pays it (and then passes it on)... the other 2 are kinda vague but in context it appears they are saying the CONSUMER pays it.

First Link:
http://www.fueleconomy.gov/feg/info.shtml#guzzler

The Energy Tax Act of 1978 established a Gas Guzzler Tax on the sale of new model year vehicles whose fuel economy fails to meet certain statutory levels. The gas guzzler tax applies only to cars (not trucks) and is collected by the IRS. The fuel economy figures used to determine the Gas Guzzler Tax are different from the fuel economy values provided on this web site and the Fuel Economy Guide. The tax does not depend on your actual on-the-road mpg, which may be more or less than the EPA published value. The purpose of the Gas Guzzler Tax is to discourage the production and purchase of fuel inefficient vehicles. The amount of any applicable Gas Guzzler Tax paid by the manufacturer will be disclosed on the automobile's fuel economy label (the window sticker on new cars).
This one says it's taxed to, and PAID BY, the MANUFACTURER. That is then passed directly to the consumer.

The second link:
http://www.ott.doe.gov/facts/archives/fotw166.shtml
Consumers Pay More for Gas Guzzling Automobiles
When purchasing a new automobile which has an EPA gas mileage rating less than 22.5 miles per gallon (mpg), consumers must pay an extra tax called the Gas Guzzler Tax.
Now that one seems to say that the CONSUMER pays it (and therefore, it's not "passed on" in the purest sense of the words)... it's PAID, not PASSED ON. Of course this webpage links to the FIRST link, and the first link says the manufacturer pays it... :)

Another one:
http://www.epa.gov/otaq/imports/factmnc.htm
A "Gas Guzzler Tax" may need to be paid on your vehicle. These taxes range from $500 to $3,850 per vehicle.
Again, this alludes that YOU would have to pay it (not the manufacturer), therefore it's not PASSED ON, it's PAID.

From the same page:
Internal Revenue Service
Public Affairs Office
1111 Constitution Avenue, N.W.
Washington, DC 20224
(202) 622-4920
I guess you can call them to find out for sure. Maybe we're just talking semantics here but if you need to answer whether the tax is "passed on" then you need to find out who actually makes out the check to the IRS.

Commenting on what Andrew said, so elequantly.. it's very important to realize that EVERY PRODUCT/SERVICE has taxes PASSED ON TO THE CONSUMER. Whether they are hidden or not. Without taxes, you'd be amazed how cheap some products would be.

As an example, in my business, when I quote I try to get at least $20-30 per hour AFTER TAXES for my time spent. That means I hav to charge AT LEAST $35-60 per hour to my clients. If I didn't have to pay income taxes, my clients would only be paying $20-30/hour.

Other interesting links:

http://www4.law.cornell.edu/uscode/26/4064.html (looks like the actual code/law0

http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr600_main_00.html

http://caselaw.lp.findlaw.com/casecode/uscodes/26/subtitles/d/chapters/32/subchapters/a/parts/i/sections/section_4064.html

you may want to read the above links, maybe they tell whether the manu or the consumer actually pays it??
 

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><i>It just sounded in his post like corperations only "collect" taxes from consumers, which isn't, strictly-speaking, true.</i>

Well, look at it this way - when the IRS phones up General Electric and tells them that they have to pay a corporate tax of ten million dollars, do you think Jack Welch goes home and gets the money from under his own mattress, or do you think he adds a dollar to the price of every blender and washing machine and locomotive and jet engine that GE sells?

I love to read stories in the paper about stupid people who are so self-righteously happy when those big greedy corporations get their taxes raised. Hello?!? People?!? Those nasty corporations don't raise the money by asking all the secretaries to chip in - they raise the price of their products, and you doinks are the ones who end up paying the taxes.

If the government decides it wants to raise some revenue, it doesn't matter to whom they apply the tax directly - in the end, it comes out of my pocket and your pocket, because *we* are the only ones in the equation who are generating money.

This must be about the time of year that our schools teach the kids about Kwanza, and other stuff they'll find useful when they're adults.
 

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Whatever Man
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Either way the top 10% of income makers are paying 90% of the income taxes collected. Since I'm not one of those privileged bastards I'm happy with it.
 

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Yeah, well the top 1% in income pays 50% of all income taxes and I AM one of those people.

It sucks!!! Priviledged bastards?? No priviledge here, I've worked my ass off the get to this point. I've worked longer than alot of the guys on this board have been alive and now the government thinks they are my partner :mad: :mad:
 

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Spirit said:
Yeah, well the top 1% in income pays 50% of all income taxes and I AM one of those people.

It sucks!!! Priviledged bastards?? No priviledge here, I've worked my ass off the get to this point. I've worked longer than alot of the guys on this board have been alive and now the government thinks they are my partner :mad: :mad:
I'll agree with that...while some people may have inherited the money or won the Lottery, that money was originally worked for. it took someone a lot of work to get there. Unfortuntely, I don't think anyone can argue unless they can come up with a better tax plan than what is instated now. I'm not sayig the current plan is GOOD, I personally don't think so, but without a better solution, you can't go around saying it sucks...
 

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17% flat tax

This tax method has been discussed for years, but will never happen. It would put to many lawyers and accountants out of work.

Everyone pays 17% of what they earn in taxes. No deductions, no credits, no BS.

This way everyone pays their fair share of taxes and no one can aviod taxes. Tax revenue would be the same for the goverment.
 

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Discussion Starter #13
That would be nice.

Thanks a lot guys for all of the information and interesting conversations.

But I have one more question, why does the IRS get the money from the Gas Guzzler Tax?
 

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Internal Revenue Service

IRS collects all money owed to the federal goverment for any kind of taxes. That is their job. Remember the IRS does not write the tax codes, congress does.
 

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Discussion Starter #15
Oh yeah, I guess I've been thinking too much with all of these finals.
Thanks!!!
Player
 

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So, why is "everybody pays 17%" fair? Or any other figure?

Why is it fair that Bill Gates pays 17% of a million dollars, and Joe Cockroach pays 17% of $100?

Did the government provide Bill Gates with ten thousand times the service that it provided Mr. Cockroach?

Why not everybody pay the same dollar amount?

Come to that, why not everybody just pay for the service they actually receive from the government? That way, we'd all pay the same dollar amount for the military and the police and the judges, and after that it would be "user pay" for anything else.

You want to drive on an interstate? Pay a toll.

You want to go to the library? Pay per book.

You want to travel by airline? Pay the airport tax.

You want to go to Yosemite? Pay the entry fee.

You want to drop out of grade 10 and buy a used Mustang and buy cigarettes and beer and watch wrestling and go on welfare and be a lazy bastard and have 6 illegitimate brats and collect welfare? Pay for it yourself.

Pretty soon, you realize that government is largely nothing more than a big insurance company, one that puts a gun to your head and sells you a policy that you don't want, and your premiums are paying for all those lazy worthless do-nothings who pay way less in premiums than you do and yet make way more claims than you do.

Government is Robin Hood - steal from the rich, give to the poor.
 
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