# Tax Rates for the Superwealthy **URL:** \ **Category:** Great Debates\ **Created:** [January 20, 2012, 9:37pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172 "2012-01-20T21:37:07Z")\ **Posts on this page:** 20\ **Page:** 6
**Author:** ![Evil\_Economist](https://avatars.discourse-cdn.com/v4/letter/e/c89c15/32.png) [@Evil\_Economist](https://boards.straightdope.com/u/Evil_Economist)\ **Post date:** [January 24, 2012, 3:12pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/101 "2012-01-24T15:12:36Z")
> [@Terr](#): > > I quoted the paper to show you the graph. Do you agree that while the top marginal tax rate (in fact, all tax rates) went down from 2000 to 2006, charitable giving went up for every tax rate level? You know, when you posted a link to a math-dense NBER working paper, I thought you were a serious guy. I had an idea from undergraduate classes that the substitution effect outweighed the income effect, but I wasn’t married to the idea, and if you had presented a paper that said I was wrong, I would have said “huh, guess the income effect dominates,” and moved on with my life. Since I thought we were in a serious discussion I actually took the time to read the paper you linked to. I thought it was funny that the paper contradicted your claim, but it was a complex paper, and at first reading I wasn’t sure myself how they constructed the price variable. Now it’s become evident that you didn’t even read the paper, you just linked to it for the pretty pictures, and you don’t even understand those. You’re even flat out ignoring the entire left half of the pretty picture. You’re not in this to understand what the evidence shows; you’ve decided in advance what the result is going to be, and you will only accept a result that’s in line with your political beliefs, facts be damned. > [@Terr](#): > > Here’s more: [http://oldfraser.lexi.net/publications/forum/1999/06/04\_charitable\_donations.html](http://oldfraser.lexi.net/publications/forum/1999/06/04_charitable_donations.html) See, this is the kind of cite you should have given in the first place instead of an NBER working paper. It’s complete crap that wouldn’t get a passing grade in a decent undergraduate program, published by a organization that’s pushing political beliefs, written by a couple of individuals with no academic papers to their credit. It makes claims with no evidence to support them, makes egregious data mistakes and performs a clearly stupid analysis. If you had linked to this cite in the first place (instead of the NBER working paper) I wouldn’t have made the mistake of thinking you were a serious guy. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [January 24, 2012, 3:49pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/102 "2012-01-24T15:49:48Z")
> [@Martin\_Hyde](#): > > 1. **erislover** was hypothetically talking about basically levying a 35% excise tax on corporations (35% because that would be the rate any large corporation would pay, if I have my corporate tax rates memorized correctly I believe that is the top marginal rate.) I totally agree with you the pass through isn’t some automatic, uniform thing. I’ve even said that (in my example about how even in the same sector, businesses like Costco and Sam’s Club pass through costs at a different rate, due to a difference in business strategy.) But a 35% excise tax is simply too colossal for a substantial portion of it to not be passed on to consumers. I don’t think he was proposing that. He was using a backhanded way to ask why corporations get deductions where living breathing human beings would not. I tried to answer him but the distinction starts to get metaphysical at some point. > [@](#): > > As a Harvard economics professor correctly states: > > > [@](#): > > > > …When the government levies a tax on a corporation, the corporation is more like a tax collector than a taxpayer. The burden of the tax ultimately falls on people—the owners, customers, or workers of the corporation. Well, I could just as easily turn around and say that the vast majority of income taxes end up falling on the back sof employers who must increase their labor costs to provide their employees with enough after tax income to justify their continued labor. WTF is the difference between the two? Ultimately the person paying the tax is burdened with that tax (in this case the shareholder or owner of the business), if they can extract more elsewhere thats fine but the businessmen I know would have extraced that extra money before the tax if they thought they could get it. > [@](#): > > Professor Mankiw’s blog [post](http://gregmankiw.blogspot.com/2006/05/corporate-tax-rates.html) is a good quick read on this subject. I pretty much agree with him, I think in the short term a corporate tax will hit the shareholders initially (but again, **erislover** is proposing a massive excise tax, which would almost certainly mostly hit consumers right from the start), but over time I think the market adjusts so that the majority of the corporate income tax is eaten by average consumers and employees of the company, in the form of lost job opportunities and higher prices for the finished product. Bullshit. If markets operated perfectly such that only optimally efficient companies existed and they all operated at profit margins that approximated their cost of capital plus a premium for their junior position to debt then sure. A tax would only initially be borne by the shareholder who would suffer a reduction in share price so that their shares now yielded the required yield. And if the markets were in fact as seamlessly efficient as Mankiw posits then sure any new production would come at the expense of lower prices paid to suppliers and labor or higher costs to the consumer… eventually. But those higher costs would lead to higher labor costs, etc and would ultimately be absorbed by inflation. This is bad for people who have wealth but OK for people who earnt heir income. > [@](#): > > Tax policy is complicated, and even though all taxes _are_ paid by people, there are valid reasons to grab taxes from different forms of taxation (excise, property, income, estate, etc.) But people need to really understand how these different forms of taxation work and who they most impact. Its complicated and while many on the left don’t pretend to understand its imlpications the right thinks they can distill this complexity into a few pithy bumper stickers. > [@](#): > > 1. An excise tax on net income is economically the same as an income tax, but income taxes were not constitutional when it was created, so it is a legal distinction. But it’s worth knowing that historically taxes on corporations _started_ as an excise tax. Its a distinction without a difference. however they started, they are now an income tax. > [@](#): > > 1. As the discussion went on, I realized eris was interested in seeing corporations pay a 35% excise tax, which is certainly more practical to collect. I don’t think thats what he was talking about at all. He doesn’t want to tax corporations on gross income, he wants individuals to be able to deduct more of their cost of living. > [@](#): > > I’m all for lower taxes, I think it’d be great if we could deduct 90% of our income from our personal income taxes. But I’m also for having a working and functional society. So I think **erislover** needs to answer a few solid questions for me to even begin to understand where he is coming from. Yeah, I don’t think his ideas work either. Don’t tax you, don’t tax me, tax that man behind the tree. Ultimately, sure all taxes are paid by people. But which people. I can go through my logic but ultimately taxes should be borne by everyone but overwhelmingly by those who can most afford it. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [January 24, 2012, 3:56pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/103 "2012-01-24T15:56:21Z")
> [@Evil\_Economist](#): > > You know, when you posted a link to a math-dense NBER working paper, I thought you were a serious guy. \ It’s posts like this that make we wish we had a “vote up” feature or an applause smiley. Wonderfully done… ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [January 24, 2012, 4:02pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/104 "2012-01-24T16:02:50Z")
> [@erislover](#): > > **Martin** , I may not have been the hallmark of clarity in this thread, but you’ve not even tried to understand my position at all. Please continue in your fantasy land without me. I don’t know if this got lost in my disjointed posts but: "The classic definition of income is consumption plus savings (which can be negative). A corporation doesn’t have consumption the same way that person does. They don’t need food, clothing and shelter, everything they do is to maximise profits. To the extent that executives have coopted some value in the form of lear jets and country club memberships, that is probably consumption on the part of the executive and therefore their income." So with a lack of consumption to fill out the equation, corporations are basically left with nothing but net savings to tax. A lot of the disconnect you see is the tax code giving people a break when they receive in kind compensation from an employer but do not giving the same break when they spend the money themselves (classic example is health care premiums). Why should corporations be able to provide compensation in the form of health insurance without taxing the employee on the received benefit where the same employee would not be able to deduct the health insurance if they bought it for themselves? Is the answer to make health insurance premiums tax deductible for everyone or to make it taxable for everyone? Same can be said of company cars and all sort of other discrepencies you might see. ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [January 24, 2012, 4:24pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/105 "2012-01-24T16:24:08Z")
> [@Damuri\_Ajashi](#): > > A corporation doesn’t have consumption the same way that person does. They don’t need food, clothing and shelter, everything they do is to maximise profits. To the extent that executives have coopted some value in the form of lear jets and country club memberships, that is probably consumption on the part of the executive and therefore their income." I didn’t miss it, I was just trying to figure out what you meant, since every corporation spends a lot on such items. They need a place to conduct business (shelter), they purchase food on behalf of their employees on business trips (food), clothing I guess happens to not really apply in most cases but that’s pointlessly specific. > [@](#): > > So with a lack of consumption to fill out the equation, corporations are basically left with nothing but net savings to tax. This “lack of consumption” thing seems completely wrong. Do corporations buy durable goods? Yes. Do they buy services? Yes. Do they buy non-durable goods? Yes. Sounds a lot like consumption to me. > [@](#): > > Why should corporations be able to provide compensation in the form of health insurance without taxing the employee on the received benefit where the same employee would not be able to deduct the health insurance if they bought it for themselves? They shouldn’t. > [@](#): > > Is the answer to make health insurance premiums tax deductible for everyone or to make it taxable for everyone? It’s totally arbitrary which one you choose, but you should choose one or the other. ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [January 24, 2012, 6:18pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/106 "2012-01-24T18:18:03Z")
> [@Evil\_Economist](#): > > You know, when you posted a link to a math-dense NBER working paper, I thought you were a serious guy. Facts are facts. It shows that as tax rates went down, charitable donations went up. How those guys interpret that fact is secondary. ---
**Author:** ![Truman\_Burbank](https://avatars.discourse-cdn.com/v4/letter/t/ecc23a/32.png) [@Truman\_Burbank](https://boards.straightdope.com/u/Truman_Burbank)\ **Post date:** [January 24, 2012, 6:34pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/107 "2012-01-24T18:34:56Z")
> [@John\_Mace](#): > > I doubt the CFTJ numbers are wrong, although the CAP numbers don’t seem to quite match up. > > …But if anyone wants to bitch and moan about rich people paying about the same rate as middle class people, then bitch at the states, not at the federal government. That’s where the regressivity comes from. Hey John, don’t look now, but don’t you think Mitt just took a dump all over your post? ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [January 24, 2012, 6:48pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/108 "2012-01-24T18:48:25Z")
> [@erislover](#): > > I am not asking for fair tax, I’m asking for it to be consistent. Why does it need to be consistent? If you don’t care that it’s fair. Governments don’t need to be fair or consistent in their tax policy…they just have to raise enough to keep the lights on. ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [January 24, 2012, 7:27pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/109 "2012-01-24T19:27:08Z")
> [@Omar\_Little](#): > > Why does it need to be consistent? If you don’t care that it’s fair. Governments don’t need to be fair or consistent in their tax policy…they just have to raise enough to keep the lights on. Why does anything need to be anything? The point of consistency is to avoid special treatments and strong-arming market behavior through tax policy. I don’t mind government intervention, and I’m not afraid of things like carbon tax to guide policy, but special treatment for non-special entities is unsound. 15% rate on dividends—why? Income is income. Compensation is compensation. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [January 24, 2012, 10:37pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/110 "2012-01-24T22:37:44Z")
> [@Damuri\_Ajashi](#): > > Bullshit. > > If markets operated perfectly such that only optimally efficient companies existed and they all operated at profit margins that approximated their cost of capital plus a premium for their junior position to debt then sure. A tax would only initially be borne by the shareholder who would suffer a reduction in share price so that their shares now yielded the required yield. And if the markets were in fact as seamlessly efficient as Mankiw posits then sure any new production would come at the expense of lower prices paid to suppliers and labor or higher costs to the consumer… eventually. But those higher costs would lead to higher labor costs, etc and would ultimately be absorbed by inflation. This is bad for people who have wealth but OK for people who earnt heir income. “Okay.” I don’t think you understand basic tax incidence, and since I’ve cited a well known Harvard economics professor (who is **not** known for being right-leaning at all) and you’ve really done nothing but say “nuh-uh” I’ll not really argue _that_ point any further. (This isn’t a blind appeal to authority, but you don’t know my authority and I don’t know yours, so I went to an outside authority of some credibility to use as supporting evidence.) But I’ll say that it is really **irrelevant** to our discussion. Presume corporate income taxes mostly just hit shareholders or the wealthy. Don’t you still think the _most efficient_ and _effective_ way to tax shareholders and the wealthy is to _tax shareholders and the wealthy?_ There are direct taxes you can levy on shareholders if that’s where you want your revenue coming from (in various forms you can tax stock appreciation, dividends, stock transactions etc), and a properly constructed income tax can tax the wealthy far more effectively than any other method because it is directly targeted at them. (Things like luxury taxes have proven ill designed at taxing the wealthy.) > [@](#): > > I don’t think thats what he was talking about at all. He doesn’t want to tax corporations on gross income, he wants individuals to be able to deduct more of their cost of living. And I want to own a castle in France, my own private spaceship, and a mountain of gold. But those things cost money and I don’t have enough for any of them. The government is operating at over a trillion dollar deficit with our current tax system, I pretty much think the last thing we need is more deductions for individuals. I’m not advocating we soak the middle class to close the budget gap, but I’m also not on board with them paying any less at this point, either. I think we’re mostly on the same page now and I understand what **erislover** is saying, and while it isn’t quite as nonsensical as what I _thought_ he was saying it seems to boil down to: “I wish individuals could deduct more”, and I think everyone wishes that were true but some of us also wish to keep the lights on and society functioning and I don’t see how we do it with _more_ individual deductions. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [January 25, 2012, 6:04pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/111 "2012-01-25T18:04:02Z")
Don’t know if anyone has posted [this](http://abcnews.go.com/blogs/politics/2011/09/fact-check-the-richtheir-secretaries-and-taxes/), but it seemed relevant to the discussion. Sorry it’s just a drive by…I’m in-between flights atm and happened to be reading an article that was fact checking Obama’s SotU speech, and there was a link to this and I remembered this thread so figured I’d post it. > [@](#): > > Treasury Secretary Geithner yesterday declined to answer a key question about the president’s proposed “Buffett Rule”: How many millionaires and billionaires pay lower tax rates than middle-income families? > > The answer: not that many. > > The nonpartisan Tax Policy Center has crunched the numbers and found that Warren Buffett and his secretary are the exception to the rule. For the most part, the wealthy pay a significantly higher percentage of their income in taxes than middle-income workers. > > The key numbers: this year those earning over $1 million will pay, on average, 29.1 percent on federal taxes. Those earning between $50,000 and $75,000 will pay 15 percent. > > That’s not to say that there aren’t wealthy people who are even better than Buffett at avoiding taxes. In 2009, 1,470 people with incomes over $1 million a year paid absolutely no taxes. But that represents less than 1 percent of those earning over $1 million a year. Raising their taxes may be the fair thing to do, but it will not bring in much revenue. > [@](#): > > It’s a loophole for hedge managers, pure and simple. But while it may be an outrage that these uber-rich hedge fund managers pay such a low rate compared to the rest of us, there are just not many of them out there. > > But the top 400 tax filers represent a tiny sliver – just .00028 percent of all filers. The vast majority of those earning over $1 million a year pay at a higher rate, which is why the average tax rate for this group, according to the Tax Foundation, is 29.1 percent of taxable income. And, yes, this number includes income taxes, payroll taxes and capital gains taxes. > [@](#): > > The numbers change a bit if you look at total income before deductions and tax credits (Adjusted Gross Income), according to another non-partisan group, The Tax Foundation. Here’s how the numbers breakdown using IRS data from 2009 on Adjusted Gross Income for the income groups at issue in this discussion: > > - > > ``` > $10 million a year paid 22 percent. > > ``` > > - > > ``` > $1 million to $10 million paid 25 percent. > > ``` > > - > > ``` > $50,000 to $75,000 paid 7 percent. > > ``` > > The rate for the middle-income filers drop because many individual deductions and tax credits are phased out for higher income taxpayers. -XT ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [January 25, 2012, 9:03pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/112 "2012-01-25T21:03:10Z")
> [@Martin\_Hyde](#): > > And I want to own a castle in France, my own private spaceship, and a mountain of gold. What a condescending load of crap. Offering special exemptions for businesses but not for actual people is not some kind of wild “I want to be a pony when I grow up” fantasy. For someone _so concerned_ about the deficit, it’s surprising that adding more exemptions for people is a silly dream but maintaining those exact same exemptions for businesses is just common sense. I know we agree on the 15% capital gains rate being nonsense; it’s absolutely amazing that you cannot even imagine my proposal being anything but a little girl’s dream. ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [January 25, 2012, 9:47pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/113 "2012-01-25T21:47:23Z")
> [@erislover](#): > > Why does anything need to be anything? The point of consistency is to avoid special treatments and strong-arming market behavior through tax policy. I don’t mind government intervention, and I’m not afraid of things like carbon tax to guide policy, but special treatment for non-special entities is unsound. 15% rate on dividends—why? Income is income. Compensation is compensation. 15% on dividends? Last time I checked dividend income is taxed at ordinary income rates unless you are a corporation that is receiving the dividends then you are only taxed on 30% of the amount of the dividends you receive (dividends received deduction). For someone that’s terribly critical of the US tax code, you seem to not know much about it. Maybe you should brush up on it first before you start parroting back things you think you’ve heard. Is the 15% rate you are aggravated about possibly the capital gains tax rate? If so, there’s a logical reason for it being lower than the ordinary income tax rate. It’s purpose is to incentivize investment which should spur economic growth. Where do you think the money for new manufacturing plants, industrial plants, office buildings, call-centers, retail centers, etc., etc., that employs most of the people in our country comes from?..Uncle Sam? ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [January 25, 2012, 9:50pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/114 "2012-01-25T21:50:59Z")
> [@Omar\_Little](#): > > Is the 15% rate you are aggravated about possibly the capital gains tax rate? Yes, I misspoke. > [@](#): > > If so, there’s a logical reason for it being lower than the ordinary income tax rate. It’s purpose is to incentivize investment which should spur economic growth. People have never needed an excuse to want to be wealthy. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [January 25, 2012, 9:51pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/115 "2012-01-25T21:51:55Z")
> [@Omar\_Little](#): > > 15% on dividends? Last time I checked dividend income is taxed at ordinary income rates Then you have not checked for a long time. The rate was set to 15% for “qualified dividends” in 2003. Most US stocks issue “qualified dividends.” ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [January 25, 2012, 10:17pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/116 "2012-01-25T22:17:45Z")
Since part of the debate here is about deductions on corporation income tax, Obama’s speech becomes interesting: [QUOTE=2012 State of Union Address] … if you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home. [/QUOTE] Can we do an agree/disagree poll on this matter, right here in this thread? I vote “Agree with Obama.” (ETA: Yes, the _details_ of the tax code change involved might be a problem, but let’s agree first on big-picture answers.) ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [January 26, 2012, 1:32am UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/117 "2012-01-26T01:32:50Z")
**septimus** (or anyone else), what deduction would they be getting for it? ---
**Author:** ![SciFiSam](https://avatars.discourse-cdn.com/v4/letter/s/47e85d/32.png) [@SciFiSam](https://boards.straightdope.com/u/SciFiSam)\ **Post date:** [January 26, 2012, 7:11am UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/118 "2012-01-26T07:11:32Z")
> [@Damuri\_Ajashi](#): > > You aren’t arguing for a gross revenue tax on corporations you are arguing for a net revenue tax on individuals. > > Why should a corporation get a deduction for interest paid to fund the corporate jet but individuals don’t get to deduct interest paid to fund their commuter car? > > Why should corporations get to deduct anything that might remotely be considered a cost of production when individuals cannot deduct the cost of the education that is a prerequisite to their job (and frankly corporations get to deduct research and development on stuff that doesn’t provide income yet so why can’t I deduct those night classes in poetry, I might become a poet someday). > > Why shouldn’t I get to get to deduct the cost of work clothes? Or feeding and sheltering myself generally? > > Why shouldn’t I get to deduct the cost of feeding, clothing and educating my family when a corporation can deduct the costs of subsidiaries? > > IOW, why shoudn’t I get to take deductions that I would be able to take if I were a corporation? > > Perhaps what you are arguing for is a larger standard deduction. Weeell… I’m in the UK, but I get deductions on these things - not a corporate jet, but some of the rest, like a proportion of my rent, gas bills, tech upgrades and some travel costs, excluding normal commuting. That’s because, if I worked for someone else, they’d be paying for the heating and computers and so on that I’d use at work. If I worked for someone else I wouldn’t have the costs that are counted against tax. So I don’t see anything wrong with a company counting those costs against tax either. They’re not revenue - they’re the costs of providing a business. Not _going to work_, which is why everyday commuting and a nice suit don’t count, but providing a business. ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [January 26, 2012, 2:03pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/119 "2012-01-26T14:03:18Z")
> [@SciFiSam](#): > > If I worked for someone else I wouldn’t have the costs that are counted against tax. So I don’t see anything wrong with a company counting those costs against tax either. They’re not revenue - they’re the costs of providing a business. Not _going to work_, which is why everyday commuting and a nice suit don’t count, but providing a business. When a company buys some Ajax to clean the toilets, it is not different than when I buy some Ajax to clean the toilet, except in the tax code. “Cost of doing business” is something the _entrepreneur_ should worry about, not the government. ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [January 26, 2012, 2:20pm UTC](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172/120 "2012-01-26T14:20:05Z")
> [@erislover](#): > > Yes, I misspoke. > People have never needed an excuse to want to be wealthy. No, but they do need an excuse to risk being poor. What is it with people that fail to understand this?! Do they think that investments never fail? That it’s easy to find somewhere safe to invest your money and still get paid? What’s so hard to understand about tax rates lowering reward without lowering risk? [Previous page](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172.md?page=5) [Next page](https://boards.straightdope.com/t/tax-rates-for-the-superwealthy/610172.md?page=7)