Again your pipe dream.  NOw I want you to show me the company (not employee) that makes a consistent profit month to month.  ANy one will do.

MOre likely, what will happen with your company (before it goes out of business) is:

Month 1: Estimated Profit $10k (note the estimated part)

Month 2: Hire employee, But estimated profit goes to 0

Month 3: Fire EMployee (no money to pay them now), estimated profit goes to $20kl

Month 4: Hire 2 employees, estimated Profit $5k

Month 5: Hire no one (but do not fire).  Not enough to hire anyone. Estimated Profit -$15k

Month 6: Fire 2 employees (dont have the money, member?). Estimated Profit $10k

etc.

Now, not only are you jerking around employees (and have a damn hard time hiring anyone qualified with that reputation), but you are incurring more costs than you thought!  How?  I dont know if they have it in your place, but there is something here called the UI tax.  And guess what?  That goes up the MORE you fire people.  So if the company had waited to hire people when they KNEW how much money they had (note the estimated above), they would not have had to fire them all the time, and incur ANOTHER tax.

But with all this, I still donot expect you to understand. In your perfect world, companies make the same money every month, so they can work on fiscal month basis, and hire people before uncle sam gets his dough.  But as you can see (if you want to read and understand), is Uncle Sam is going to get his money anyway.

Oh, and one more thing.  While ALL profits are taxed, not all losses can be written off against future earnings.  And get this one, companies do not get rebates when they LOSE money.  They just can offset future tax payments with part of the current losses.

I did not have time last night to point out your naivete' and ignorance.  Consider this your rebuttal.  Not that I think you will understand, as you are trying very hard not to, but you have been rebutted.

From before:

If you can't understand the basic point of expenses being discountable against taxes, what point is there in me spending far more time making the example more realistic? The example is not meant to be realistic, it is meant to remove any other complications to see the one thing on it's own and the effect it has easily (without removing a complication that would in all, or almost all, cases reverse the result obtained through simplification). If you want the 'your example is too simplistic' point to carry much weight, then show what I've excluded from it that would affect the result (not the amount of the result, but the actual result itself), and which applies in so many cases that the exceptions where it doesn't apply are therefore of little significance.

As to the risk of firing people and incurring expenses relating to that, again see before:

In other words if you aren't very confident about your estimates, and hence want to wait until you have the money (or most of it), it doesn't affect the result (that you reduce your taxable profits and hence tax payable via the investment), it just affects the amount you reduce it by.

You likely didn't read my post fully seeing as I already answered your 'rebuttal' points in it anyway, and then you say I should read and understand? Priceless!

As to uncle sam getting his money anyway, yes, he probabily will - in the above example (if everything goes to plan) you'd expect the investments (that reduced your tax burden for the year undertaken) to yield a profit that would then be taxed in the future. It's simply a matter of timing - better to make an (allowable wholly or partially as an expense for tax purposes) investment in this tax year than waiting until the next tax year because you get the tax relief far sooner.

I'm guessing you didn't realise (one of the reasons) why I made sure the company in the example wouldn't have losses to avoid complication. Either that or you didn't bother reading it, but just jumped straight to responding to it.

If you're going to try and do a rebuttal, make sure you've read the post you're disagreeing with fully first - your above 'rebuttal' points suggest you didn't, since I'd already answered all of them in the previous post.

YOu still dont get it.  Where's the profit?  Again you say "if this, then that, but this then that".  You still dont get it.  I gave you a "simple" example.  I dont need to critique every line item of your example as it is unrealistic.  I used simple numbers to keep it simple.  Of course the real world is more complicated, but you cant even refute the simple example so how are you going to refute a real world one?

Yes it is priceless.  As in worth less.  To try to discuss something when you dont even have the basic knowledge to begin with.  You are a government worker, not a business owner.  They are the only fools that spend money they dont have in anticipation of getting the money (well at least not the successful businesses).  You keep talking about spending "profits" each month, and I keep trying to tell you - they do not exist.  They ESTIMATE profits more frequently, but report profits annually.  And as I explained to you already, that is both an accounting standard, and the law.

You cant spend what you do not have, unless you are a fool.  And business fools do not stay in business long.

What I and others are saying busniess can only lessen its tax burden, not get rid of it entirely.

  The taxes an employee pays to the government are matched in taxes on the employer. How do you expense that away?  The answer is you don't this tax gets paid regardless if money is made or not.

  What about taxes on items the business consumes? 

When I buy/sell/use shrink wrap I don't have to pay sales tax on what I buy and sell (though I do have to collect it.)  But when I use the shrink wrap I am supposed to pay the sales tax.  How do you propose I get rid of this tax?

If you're talking about taxes relating to the hiring of employees, that's treated as a cost of hiring those employees. As I already mentioned, I was talking about corporation tax (the tax on a company's profits).

What about them? If the company faces a sales tax on it's products it'll increase it's price either wholly or partially to reflect the tax. Again it's not a tax on the company's profit.

I did, both in my post before you even made the example, and again in my response to it:

(now for the third time!!!):

In case you need it spelled out even more, this means that you don't end up hiring employees only to fire them the next month when your profit estimate changes, as happened in your example. You could also of course just borrow to fund a temporary cash flow shortage if you managed to run out, which would similarly solve the problem.

Although a different topic (since you still don't understand that you can spend the money you do have), you can spend money you don't have and do better in business via borrowing. If you can undertake a low risk project which you expect to yield a 20% reteurn, and can borrow money (that you don't have) at 5% (and the difference in risk is worth less than 15%), you would be a fool not to spend that money you don't have.

Rather presumptious, to tell me what I do for a job, don't you think? I also don't see what relevance your guess as to what I do for a living has to do with this conversation. Still it was about as accurate as most of your latest posts.

Most businesses are not corporations.

The same applies for a non-corporate business, since it will still be taxed on a % of it's profits, and expenses such as staff will still be allowable (hence why I referenced both in earlier posts).

You ARE trying to be deliberatly obtuse.

No one said that they are trying to pay profit taxes on a monthly basis. At the end of their yearly report, they simply calculate gross revenue, they deduct expenses, they deduct other tax benefit they  might have earned, and then they have the net profit. They pay profit taxes on the net profit. There is no guesswork there.

But a man's paid salary is part of the expenses. So let's say Obama raises Stardock's corporate taxes from 40% to 45% (random numbers thrown in the air, for argument's sake) as Draginol seems to be so afraid. If Stardock has 1 Billion in gross revenu, but 900 millions in different expenses (salaries, real estate, etc...) he had to pay 40% of the 100 million left, and now it's 45%.

If he want to check wether he wants to hire a new employee, looking at the profit margin POST-tax when he makes a decision is.. well, stupid, since the money in excess that he will use is the one before taxes. Either a new employee will be worth the cost, and he should hire him regardless of the new tax rate, or it isn't. Before and after the tax cut, he has as much money to pay staff and expand. Actually, a tax raise is a good incentive to private companies to re-invest money, since it's considered a bad time to cash in on those company, and until the tax rate diminish, it's a better economical decision to merely wait and re-invest and hope to gain even more money.

Some public companies have to deal with sharky shareholders that are quite aggressive when it comes to final return on their investments, and the change in the corporate taxe rate will force the CEOs of those companies to fire people/hire less because they have to keep the shareholders happy. But the way I understood it, Stardock's shareholder (singular) is also their CEO. Whatever change there is in the corporate tax rate will only influence how much cash gets into his own personnal bank account, not the money available to pay new staff.

And since a talented new staff, new projects on his part, or any kind of expenditure will increase Stardock's networth anyway on the long run (merely delaying the money that was supposed to get to him), Draginol's personnal fortune grows anyway with Stardock's (the joy of private ownership). What was he whining about?

Oh yhea. His candidate lost, and he tries to make up excuses.

Did you go out and buy your BO plate and coin?

No, you are missing it.  I have stated that.  YOu and Maudlin think that a company can spend profits (as expenses) not yet realized.  YOu earn profits at the end of the year, not monthly.  YOu estimate monthly.  And if you "mis-estimate" you are our of business.  So you cannot hire someone before you have the money to. Unless you want to get your reputation and UI taxes ruined.

From what I understand, his candidate never had a chance.  As the last he mentioned it, he did not vote for McCain or Obama.

So perhaps it is you who is making excuses?  Understandable for anyone that backed Obama.

Actually, you earn profit trough the year. Your sales are coming constantly, and your expenses are spread trough the year (except some other expenses). Depreciation of assets is important to calculate what is your theoretical profit when it comes to taxes, but you aren't actually loosing money (except net worth) because of it.

At the end of the year only do you calculate how much you owe the governement in taxes. But then again, if you are at the middle of the 3rd Quarter and sales are good and you can definetly expect a profit at the end of the year, and if you have to choose NOW wether or not to hire new employees and start new projects, it's stupid to look at the tax rate, since the money used will be the one before-taxes. I don't think it's possible (or even legal) for a company to use post-taxes money to spend somewhere, since it's en expenses, and expenses are deducted from your profits.

Look at it another way. Let's say (for example), Stardock has 1 million in profit this year. It could try to find a specific project to start, or maybe buy new assets to use. If it still decides to re-invest that money the next year, even if the money was generated last year, the expenses will be noted in the new year, and Stardock will still get proper expenses. Hell, if next year, on an accounting basis, Stardock spends more money than it generated, it will have tax break for futur years. But since the money used to pay for such expenses is already there, Stardock won't go bankrupt.

You have to make the proper dichotomy between the accounting way of viewing money, and the "real" flow of money. Accounting is pretty abstract when you think about it, but it is the one that matters when it comes to tax evaluation. NOT the actual cash spent day-to-day.

So... if Draginol has to check wether it wants to hire new staff to expend its business, he's stupid to look at the tax rate, because it's irrelevant, period.

BO Plate and coin?... I don't think I understand. Is that a jibe, or a genuine question?

No, you have revenue through the year.  Profits are at the end of the year since many expenses are on an annual basis, not a monthly basis - by law.

Well, let's look at one example.  Oil was $140/barrel in the 3rd quarter of 2008.  SO I can then extrapolate out how much money I as Exxon would earn based upon that, and see my dough rolling in!  SO I spend it.  ANd if I had?  Yea, big loss for the bozos!

The only thing guaranteed in business is that estimates are not facts.  Again, you cannot spend what you do not have, and you do not have it, until the end of the year.  Before that, you only have revenue, not profits.

Probably both.  They already are huckstering those things.  I guess for the disciples of the new Messiah.  It is cultish, and stupid.  And they are probably making a ton of money off of them.

Depends. If they were stupid enough to think that oil price (which up until then had been extremally volatile) would somehow stabilise, then yes they would be stupid to heavily rely on that price remaining constant. If instead they had obtained the relevant futures/forwards or alternatively fixed price contracts that would allow them to actually count on the price (for them) being $140/barrel for a set period, then yes they could confidently project based on that.

Your 'accountancy' approach of waiting until the end of the year to see what your profits were for that year, and then (and only then) spending them just wouldn't make sense in businses - you're not utilising your assets effectively, your cash is just sitting in a bank earning little interest, and so a competitor who is prepared to actually use their money wisely will do so and overtake you, all else equal. In some cases your estimates may be so uncertain, and the negative impact of incorrectly investing based on them so high that it might be worthwhile to wait (if alternatives aren't available to negate the problem), but those are the exceptions to the rule, rather than the rule itself.

Wrong. You do have it, you just don't know exactly how much it is. Profit IS made throughout the year. You then decide on an arbitrary time period (typically a year, although it would be possible for a country to require profit to be reported semi-annually etc., and of course companies can have shorter and longer accounting periods) to look at what your profits are throughout that. Those profits will be the sum of all the profits made every single day, or every single hour, or every single minute (since those are all arbitrary time limits as well) throughout that period. That doesn't mean that you have made no profit until the final day of the year where you suddenly make a ton of profit (or alternatively you make no profit for all that year, and instead only make it a few months later when the accounts are finalised).

SO do you think any company is going to be that stupid?  WHy does it take an extreme example (considering all companies sales - i.e. revenue - is at the whim of the customer) to make you see that you cannot spend money not yet realized?  Projections are fine, but if you bank on them and they do not materialize, you either are in line at Bankruptcy court, or in front of congress asking for a bailout.

No, you are wrong.  All you have is a revenue stream - and it is unpredictable.