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Mark & Juanita

Dave Hall wrote:

On Sun, 16 Dec 2007 13:14:24 GMT, (Doug Miller)
wrote:

In article , Dave Hall
wrote:
On Sun, 16 Dec 2007 03:39:14 GMT, (Doug Miller)
wrote:

In article , Dave Hall
wrote:

So I assume in this world there would be no deduction for wages paid
to employees, no deduction for the purchase price of items you then
sell, no deduction for your factory's utility costs, etc., etc. So the
grocery store that sells $1,000,000 worth of groceries would pay the
same tax as the jewelry stoe that sells $1,000,000 worth of crap, even
though the grocery store had $950,000 in costs while the jeweler had
$500,000 in costs. HMMM, seems wrong.

No reason at all to think that. You seem to be misundertanding what is
meant by a tax deduction -- which is something subtracted from adjusted
gross income

to arrive at taxable income. In your example above, the grocery store's
adjusted gross income is $50K while the jewelry store's is $500K. What's
the problem?

So tell me, what goes in to computing "adjusted gross income"?

Look at your Form 1040.

Last I looked income from a business is not computed on a 1040. Most
of the whining about deductions and most of the tax avoidance schemes
are business based and the only part that shows up on a 1040 is the
part AFTER the deductions were taken and the income shielded. Maybe
you ought to get a clue before you invest too much into your flat tax
schemes.

So, what exactly is this idea of "shielding" income in relation to
legitimately computing the profit relative to a product? Just because a
business sells an item for $1000 does not mean that business has made
$1000. If the cost of the raw good was $500, the cost of the sales staff
to sell it was $250, the cost of the building and utilities $200, and the
cost to advertise the good to get it out the door $100, the business has
not made an income of $1000,but has a loss of $50. Has nothing to do
with "deductions" or some nefarious scheming -- its simply a fact of
business life.

--
If you're going to be dumb, you better be tough