soldiernerd t1_itahwh4 wrote on October 22, 2022 at 3:30 AM

Reply to comment by Jv1856 in 8K Industry Faces Challenge with New EU Regulatory Ruling by SalmonellaTizz

That's because there was no personal income tax until 1913.

In 2021, US Government revenue was 2.04T from personal income tax (50.7%), 1.31T from payroll taxes (32.6%), and 372B (9.2%) from corporate income tax.

50% of payroll taxes (16.3% of federal revenue) are paid by corporations, which means money directly from corporations makes up 25.5% of federal revenue. The other half (another 16.3% of federal revenue) is from employee-paid payroll taxes, which is just money handed from the employer to the employee to the government, so essentially 41.8% of federal revenue comes directly from the employer.

Looking at IRS data from 2018 and 2019 it appears that salaries and wage makes up about 2/3 of reported personal income.

Now that doesn't mean it is the source for 2/3 of the tax revenue of course, as deductions and credits alter that. Notwithstanding, if tax revenue from wages and salaries makes up only 16% of total personal income tax revenue, that would mean 50.0% of federal revenue is derived, directly or indirectly from a company.

The reality is that personal income tax on wage and salaries probably far exceeds 16% of all personal income tax revenue, meaning businesses are likely responsible for well over 50% of federal revenue.

That's without taking into account any other federal revenue streams from companies such as excise duties and customs taxes.

So companies are still a very very large driver of Federal revenue.

Jv1856 t1_itaily6 wrote on October 22, 2022 at 3:37 AM

Payroll tax is not the same as income tax. Crediting corporations for employee-paid portions of payroll tax seems disingenuous to me

soldiernerd t1_itajfig wrote on October 22, 2022 at 3:45 AM

I didn't say it was the same as income tax.

Why is it disingenuous? Where do you think the money is coming from?

Jv1856 t1_itajwia wrote on October 22, 2022 at 3:50 AM

We don’t say that retailers pay 6% of tax on sales. They COLLECT the tax from the purchaser on behalf of the state. It’s the same with an employee’s share of payroll tax. That is money that theoretically would otherwise go to the employee, but the company collects on behalf of the government.

soldiernerd t1_itakabq wrote on October 22, 2022 at 3:54 AM

Sure but the difference is sales tax is money coming from the consumer, with no tie to the collecting company.

Payroll tax is money the company hands to the employee, who immediately hands it to the government. It's money which was created by the company and which the government receives as a direct result of the company's economic activity.

danielv123 t1_itbb5ek wrote on October 22, 2022 at 9:40 AM

Sales tax is avoidable. You can simply not buy anything and put it all in a bank account, so I agree that its something the consumer pays.

You cannot receive income without paying income tax. For that reason you might as well consider the tax part of the payout. Your income is paid by someone, and they are effectively paying your income tax as well.