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ar243 t1_j0r07mk wrote

It's weird that companies pay taxes after operating expenses, but regular people pay taxes as soon as they get their paycheck. Seems a little unfair.

Why not just make companies pay taxes on their total income? Is it to incentivize spending on stuff like R&D? Maybe someone can explain this to me

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spros t1_j0s93u6 wrote

Regular people can choose not to pay taxes until tax day.

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pricktive t1_j0secu5 wrote

You can write off all business expenses in your taxes; the government pays for your business expenses, including frivolous bullshit like luxury dinners. It is only pure profit that's taxed. The individual is taxed as soon as they get any money, even if the paying that tax means they don't eat that week.

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Obvious_Chapter2082 t1_j0yx3sk wrote

Frivolous expenses aren’t usually tax-deductible. And the government doesn’t pay for it, it just means that the company reduces their taxable income by that amount

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Obvious_Chapter2082 t1_j0udskq wrote

It’s mainly because businesses need high expenses to operate. If you were to tax total income, you’d have to do it at a very low rate so that businesses don’t go bankrupt

But even still, Boeing is paying tax on a loss here. So they have no income, but still owe tax

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