Air Travel

Question:

> Don’t know why it’s ‘yours’ — it’s a subsidy, clear and simple. Our > society subsidizes people in their activity of making money, assuming > they do their money-making in certain ways.

Business expenses are not tax deductions. They are business expenses, they lower your bottom line (profit). You pay tax on your profit. They may reduce the amount of tax you pay, but they reduce your profits by a greater amount, unless your company has a 100% tax bracket. I can accept the argument that the extra expense of Business Class will raise your productivity, or will give you the power to run your laptop to finish that presentation you will be giving 20 minutes after the flight lands. But I do not give any credibility to anyone who justifies BC "because it is tax deductible".

Response:

> I meant the 1/3 saved by the deduction can be used to purchase real > goods, rather than government waste.

But the 2/3 are still wasted on a plush seat with champagne and caviar or whatever level/quality os service is offered in the USA’s definition of business class. But if you didn’t waste the money on BC fares, you could spend 3/3 of that money on more productive goods/services than a plush seat with caviar.

Response:

>> >normally be the case."  In other words, it’s a variation of the chicken-egg > >thing.  Is a deduction which decreases taxes keeping what is yours, or the > >government subsidizing certain things, such as business/enterprise? > Don’t know why it’s ‘yours’ — it’s a subsidy, clear and simple. Our > society subsidizes people in their activity of making money, assuming > they do their money-making in certain ways. (For example, the poor > salaried slob >in a job provided by whom?  Unless there is some incentive for a person or group >of people to take a risk and go off on their own, starting or expanding a >business, it wouldn’t be done.  Reminds me of the old Polish expression about >their economy "they pretend to pay us and we pretend to work."

Why shouldn’t the incentive of making money be sufficient? > who has to pay a higher rent so he can live near the bus > line he needs to get to work because he can’t afford a car is NOT > subsidized, not for his rent and not for his busfare. But if his boss > flies to the moon to close a deal in order to add to his coffers, the > flight is subsidized.) >Not necessarily.  At least in our tax code, there are two important limitations >on any deductibility, in addition to the myriad couple thousand pages of >specific rules.  First, an expense must be "reasonable" (and the onus is on the >taxpayer to prove this), so a trip to the moon to collect rock samples with a >view to making paperweights would not be "reasonable."  

Note, I said ‘close a deal’, not ‘collect rock samples with a view to making paperweights’ (tho that would probably be allowed in the US ). >Second, all business >losses (ie…"deductible" expenses exceeding revenue) must have a "reasonable >expectation of profit."  Profit = taxes.

Well, the poor slob’s expenses to get and hold a job are with the expectation of him making a ‘profit’ (salary). >Profits are "mine" because I earned them.  They are the product of my labour and >risk (unless you buy into surplus value theory which hasn’t seemed to have >worked anywhere in the world).  

As the poor slob’s salary is his. >  Would you >advocate a tax on gross revenue with no deductions?

Yup, assuming it were truly upheld across thw board. But it’ll never happen.

Response:

<snip> > let me remind you that there’s no > 11 commandment saying ‘Thou shalt not pay taxes on the money you spend > in order to make more money >Er, maybe not in the US (and I think there is), but there certainly is here.   >Absent a specific exemption (e.g. only 50% of the stereotypical business lunch >is deductible, even if it is for 20 people), one is allowed to deduct reasonable >expenses incurred for the purpose of gaining or producing income.  So if I spend >$5 in gas to go to the Registry of Deeds to perform a service for a client, who >then gets billed and upon which billing I pay tax, are you saying that the $5 >should not be offset against that?  And I thought Rev Can could be onerous!

I think this is going nowhere but one last attempt: Does the waitress get to deduct her $5 in gas that she needs to go buy a uniform that she has to wear on the job? Does the truckdriver get to deduct the $35 he had to pay someone for them to clean his gutters since he couldn’t do it because he’s on the road driving his truck all the time and his house is going to flood if the gutters don’t get cleaned? Both are outlays of money that are necessitated by the activity of making money. And the answer to both questions, in the US at least, is a resounding NO. And now I shall return to the fascinating problems of air travel.

Response:

> I think this is going nowhere

probably not, but it’s a far cry from the implied "idiot savant" first exchange I got.  As I’ve said, intelligent people can disagree on things like this.  And we should.  I’ve spent far too much time in totalitarian countries to not have a very healthy appreciation for that.  but one last attempt: Does the waitress > get to deduct her $5 in gas that she needs to go buy a uniform that > she has to wear on the job? Does the truckdriver get to deduct the > $35 he had to pay someone for them to clean his gutters since he > couldn’t do it because he’s on the road driving his truck all the > time and his house is going to flood if the gutters don’t get cleaned?

Well, with respect to the uniform/gas, see my other response about tax credits. As to the truckdriver, you will see it comes out in the wash.  He can stay home and clean out his gutters, at no cost and no income.  No tax.  Or, he can go out, earn money, pay tax, and have someone clean his gutters whom he pays with after-tax dollars.  The economic decision to do that is, "can I make more by driving than it will cost me to have ‘buddy’ clean my gutters for me?" Economists call it the "principle of comparative advantage."  Let me give an example.  I can mow my lawn twice as fast as the guy who does it for me (mostly b/c I hate yardwork and want to get it done as quickly as possible.)  The lawnmower man charges me $10 an hour.  So, in two hours, he bills me $20.  I can do it in an hour, but in that hour I can be at the office, working at $150 an hour, or roughly $50 after tax ($50 for overhead and $50 for tax, if you use the national average overhead).  So it costs me $20 even though I can mow the lawn faster, but I make $50.  And in the process, Rev Can gets roughly $55-$60 (my $50 and the lawnmower guy’s $5-$10, assuming he’s a good citizen and declares it).  On my math, everyone’s a winner. > And now I shall return to the fascinating problems of air travel.

And those rapists of the working class in the front of the plane

Response:

>>> And let’s not forget people who allegedly pay their own way — but >> deduct it as a business expense, meaning the other taxpayers are paying >> for over 1/3 of their ticket. >Anyone who uses "and its tax deductible" as an excuse to spend more is using >the same excuse as your wife who had just bough an expensive fur coat she >doesn’t need : "BECAUSE IT WAS ON SALE". >I don’t think Ellen has a wife, fur coat buying or not.

Tee hee. But, if I did have one, she wouldn’t have to present ‘excuses’ for her purchases. (If *I* had to, my husband wouldn’t have a wife either. At least not the one he’s got. )

Response:

> >of people to take a risk and go off on their own, starting or expanding a >business, it wouldn’t be done.  Reminds me of the old Polish expression about >their economy "they pretend to pay us and we pretend to work." > Why shouldn’t the incentive of making money be sufficient?

Principle of substitution.  In order to take the risk, there has to be the potential higher reward, on an "in the pocket" basis.  In other words, if I can make $x after-tax being an employee, I’m not going to "roll the dice" and create my own job (and jobs for others) unless I can do better than that. > Well, the poor slob’s expenses to get and hold a job are with the > expectation of him making a ‘profit’ (salary).

Well, we may be talking about the same thing here.  In Canada, most forms of relocation expenses, for example, are deductible if they’re for a new job or job transfer.  I don’t have a problem with that.  And, to take your argument a step further, I *do* believe that expenses directly related to a job should be deductible.  Until around 1984, all employees got a tax deduction as an allowance against gas, etc.  That’s no longer there, but there is a basic personal tax credit which amounts to around $1700; that should cover most employees’ gas to and fro (unless you live way out in the stix, which is a lifestyle rather than employment decision). >Profits are "mine" because I earned them.  They are the product of my labour and >risk (unless you buy into surplus value theory which hasn’t seemed to have >worked anywhere in the world).   > As the poor slob’s salary is his.

I agree.  So why do you argue that a deduction or credit is *not* the "keeping of more of what is yours" as opposed to a subsidy?  Is tax something that only the self-employed, and not an employee, should bear?  I shudder to think of the state of our economy in that system.  Even Lenin recognized around 1921 that this didn’t, and couldn’t, work. > Yup, assuming it were truly upheld across thw board. But it’ll never > happen.

have you ever thought of going to work for Revenue Canada? So, let’s see.  Let’s go back to the GM example.  If they sell a car for $35,000, they are taxed on revenue of $35,000 regardless of the cost of the land, labour, capital and resources that go into it.  OK, provided the tax is around 1%…this can’t work simply b/c some industries are more capital intensive than others.  For example, Canadian (and American, according to what I have read) law firms have average overheads of roughly 45-55% (mine are somewhat different, but I won’t say in which direction).  My father, who is a manufacturer, has overheads that are substantially different, because it is a completely different industry – 90% (cost of goods sold and fixed expenses such as plant, equipment, and poor working slobs) is not uncommon in his industry.   But, his revenue is substantially higher.  So, a tax on gross revenue cannot work b/c it would draw capital from high-overhead (read:  job creating) industries to low-overhead (service) industries.  

Response:

> And let’s not forget people who allegedly pay their own way — but > deduct it as a business expense, meaning the other taxpayers are paying > for over 1/3 of their ticket.

Anyone who uses "and its tax deductible" as an excuse to spend more is using the same excuse as your wife who had just bough an expensive fur coat she doesn’t need : "BECAUSE IT WAS ON SALE". Excuse me, whether tax deductible or not, YOU STILL HAVE TO PAY FOR THE GODDAM TICKET. And if tax deductibility was such a great thing, all big corporations would be sending all their employees on RTW first class tickets every year.

Response:

> > And let’s not forget people who allegedly pay their own way — but > deduct it as a business expense, meaning the other taxpayers are paying > for over 1/3 of their ticket. > Anyone who uses "and its tax deductible" as an excuse to spend more is using > the same excuse as your wife who had just bough an expensive fur coat she > doesn’t need : "BECAUSE IT WAS ON SALE". > Excuse me, whether tax deductible or not, YOU STILL HAVE TO PAY FOR THE GODDAM TICKET. > And if tax deductibility was such a great thing, all big corporations would be > sending all their employees on RTW first class tickets every year.

Yep.  Over and above all of the discussion about who pays how much, this is something a huge number of people never seem to get.  Yes, if I buy a ticket for a business trip for $500 and the guy next to me buys a ticket for personal pleasure for $500, it costs me $250 after tax and it costs him $500 after tax.   BUT it’s still $250 out of my pocket.  And, to be deductible, I have to have a reasonable expectation that I am going to garner more than $500 from it in the long run…on which I will pay tax…so it’s six v. a half-dozen. Doctors seem to be the worst for this.  I had one dr. who continually whinged that one of his investment properties continually had the audacity to MAKE money.  He was much more pleased with the losers, which he could offset against his (substantial) income.  What he could not get through his head was that it was still half his money.  And that’s not uncommon.

Response:

– Hide quoted text — Show quoted text -> >> And let’s not forget people who allegedly pay their own way — but > >> deduct it as a business expense, meaning the other taxpayers are paying > >> for over 1/3 of their ticket. > >And it is OK for them to subsidize a coach ticket? > I wasn’t speaking about different classes — just pointing out that > ‘those who pay for their own ticket’ are often getting some help… > >Right, and that 1/3 goes where? I might be mistaken here, but the 1/3 > >then goes into the US economy. This is far more valuable than spending > >it on government waste. > Gee, I like that line about the money going into the US economy [note > Kate Smith singing God Bless America in the background] — I’ll be > sure to use it next time I’m with some right-winger mouthing off about > welfare recipients. Merci. >I meant the 1/3 saved by the deduction can be used to purchase real >goods, rather than government waste.

And the entire welfare check indigent people receive is always used to purchase real goods… Thanks again.

Response:

– Hide quoted text — Show quoted text ->> And let’s not forget people who allegedly pay their own way — but >> deduct it as a business expense, meaning the other taxpayers are paying >> for over 1/3 of their ticket. >I wish.  50% here.  But it raises the debate I used to have with my Tax prof, >who once worked for Revenue Canada.  Her argument that a deduction or >deferral >was a rebate/concession/tax break from the government.  My response was, "no, >it’s keeping some or all of what is *yours* or transferring it later than >would >normally be the case."  In other words, it’s a variation of the chicken-egg >thing.  Is a deduction which decreases taxes keeping what is yours, or the >government subsidizing certain things, such as business/enterprise? >There is a difference between business expenses, deductions, and tax subsidies. >A business expense is a cost incurred to conduct the business – this would be >things like the purchase of inventory, the payment of employee salaries, and >the purchase of airline tickets. >A deduction (or exemption) is an allowable set aside of certain revenues, >exempting them from taxation – common to the US system is the personal >exemption in terms of Federal income tax for individuals – business have >similar exemptions. >A tax credit or subsidy is an amount credited directly against the tax >liability of the firm, or an amount paid (or rebated) to the firm for doing >certain things.  Credits can be earned, for example, by undertaking certain >research activities, subsidies for planting (or not planting) certain crops.   >Hence, the taxpayer does not subsidies the purchase of J class tickets.  The >business incurs an expense which is deducted from revenues prior to the >determination of net profit before taxes.

You are giving the technical definitions of these words within the US tax code, not the definitions of the words in the ordinary language as they apply to the situation. (And I don’t believe ’subsidy’ is part of the IRS definition of ‘tax credit’, but I may be wrong.) The basic law we live by is that we pay a percentage of our income in taxes, the percentage determined by the level of that income. HOWEVER, we are EXCUSED from paying part of that in a number of ways, among them your ‘deductions’, ‘exemptions’, and ‘credits’. In all cases, the country at large (i.e. the mass of taxpayers) is *subsidizing* those situations and activities that result in getting the tax an individual owes reduced. HTH. Btw, since the alternative to the current system seems so unthinkable to the average American businessperson, let me remind you that there’s no 11 commandment saying ‘Thou shalt not pay taxes on the money you spend in order to make more money (unless of course you spend that money on a lottery ticket or a crap shoot, on buying a decent outfit to go job-hunting in, on finding someone to do your wash while you’re busy making money, etc etc etc).’ Public subsidizing of the making of private capital is part of the religion of a capitalist society but there’s no Higher Truth behind it.

Response:

> The basic law we live by is that we pay a percentage of our income in > taxes, the percentage determined by the level of that income. HOWEVER, > we are EXCUSED from paying part of that in a number of ways, among > them your ‘deductions’, ‘exemptions’, and ‘credits’.

Not quite.  With respect, you’re mixing two very different and importantly different terms – "revenue" and "income."  Both are the same for the "salaried slob," as you call him/her except to the extent that specific exemptions and credits are allowed (some of them significant and many not available to we horrid capitalists…maybe I’m missing something, but I don’t see a child tax credit or dependent deduction on my corporate tax return).  "Income" is what is left after legitimate business expenses.  So it begs the question – what is "income" or, put another way, what should be allowed to be deducted from gross revenue. For instance, GM sells a car for $30,000.  It is not taxed on $30,000.  It is allowed to deduct, or offset against that, the glass, steel and rubber it has purchased to make it, and the wages and benefits of the "poor salaried slob" who puts it together (and on which substantial taxes are paid, which is part of my point of the risk/reward of creating jobs by starting/expanding a business).  As well, a certain portion of fixed costs, such as amortization of equipment, is set off in recognition of the fact that a $3 billion plant is not used up in one year, but it does have a useful life and should be written down over time (and then re-written up if modernized, expanded, etc.).  I don’t think most people have serious problems with any of that. So taxes are not on "income upon which certain relief is allowed," it is on "income," period.  The question is what offsets should be allowed against *revenue*, a very real and not, with respect, just a semantical difference.  let me remind you that there’s no > 11 commandment saying ‘Thou shalt not pay taxes on the money you spend > in order to make more money

Er, maybe not in the US (and I think there is), but there certainly is here.   Absent a specific exemption (e.g. only 50% of the stereotypical business lunch is deductible, even if it is for 20 people), one is allowed to deduct reasonable expenses incurred for the purpose of gaining or producing income.  So if I spend $5 in gas to go to the Registry of Deeds to perform a service for a client, who then gets billed and upon which billing I pay tax, are you saying that the $5 should not be offset against that?  And I thought Rev Can could be onerous! Public subsidizing of the making of private capital is part of > the religion of a capitalist society but there’s no Higher Truth behind it.

Depends on how you define, and what you consider, a "Higher Truth."  The fact that we have people who will take the risk to create jobs for themselves and/or for others, *is* a "Higher Truth" in my opinion.  The exchange of the value I produce (as measured by the willingness of others to procure and pay for it) with those of others (as measured by my williness to procure and pay for it).   The market has a funny way of telling us how we’re doing at that.  If we stuff it up, we go broke.  If we don’t, we are able to expand – to command a larger quantity of goods and services of others.  And, in the process, maybe – just maybe – let Adam Smith’s "Invisible Hand" create a couple spots for the "poor salaried slob" in the process.

Response:

The difference I have seen has between people who spend their own money and people who spend other peoples money. The general concencous among people who spend their own money (ie when money on travel decreases profit and hence reduces the hefty multiple one gains), with few execptions, FC travel is not worth it. Better to take the money and spend it on a decent hotel where one spends much more time. Consultants who chare their clients for the travel, however, love to travel FC. .  

: >But it makes sense that the gravy train won’t run forever! : > : >Even though I go to Moscow for vacation to see friends, one of the : >questions that I get when I visit friends at the  radio station is : >"where are you staying?" and "was your ticket expensive?" : > : >I definitely would be getting some strange looks if I said I was staying : >in the Palace or Metropol and said that I flew FC all the way.   : As I type this, I’m in a hotel in Tokyo. Many of the people with : whom I meet ask me where I’m staying. If I were to tell them the : name of a "budget" hotel, I’d get strange looks indeed. Almost as : strange as if I said I had flown here in coach. : — Craig — Hassan Alam

Response:

>The difference I have seen has between people who spend their own money >and people who spend other peoples money. The general concencous among >people who spend their own money (ie when money on travel decreases >profit and hence reduces the hefty multiple one gains), with few >execptions, FC travel is not worth it. Better to take the money and spend >it on a decent hotel where one spends much more time.

And let’s not forget people who allegedly pay their own way — but deduct it as a business expense, meaning the other taxpayers are paying for over 1/3 of their ticket.

Response:

> And let’s not forget people who allegedly pay their own way — but > deduct it as a business expense, meaning the other taxpayers are paying > for over 1/3 of their ticket.

I wish.  50% here.  But it raises the debate I used to have with my Tax prof, who once worked for Revenue Canada.  Her argument that a deduction or deferral was a rebate/concession/tax break from the government.  My response was, "no, it’s keeping some or all of what is *yours* or transferring it later than would normally be the case."  In other words, it’s a variation of the chicken-egg thing.  Is a deduction which decreases taxes keeping what is yours, or the government subsidizing certain things, such as business/enterprise?

Response:

>>And let’s not forget people who allegedly pay their own way — but >deduct it as a business expense, meaning the other taxpayers are paying >for over 1/3 of their ticket. >If it is a business expense, should it not be deducted?

If you mean ’should’ according to the laws (of the US at least), yes. If you mean ’should’ according to some moral code, we could debate that, tho I doubt this is the most appropriate forum. In any event, the ticket buyer is being subsidized for a part of the price of the ticket if it is deductible.

Response:

>> And let’s not forget people who allegedly pay their own way — but > deduct it as a business expense, meaning the other taxpayers are paying > for over 1/3 of their ticket. >I wish.  50% here.  But it raises the debate I used to have with my Tax prof, >who once worked for Revenue Canada.  Her argument that a deduction or deferral >was a rebate/concession/tax break from the government.  My response was, "no, >it’s keeping some or all of what is *yours* or transferring it later than would >normally be the case."  In other words, it’s a variation of the chicken-egg >thing.  Is a deduction which decreases taxes keeping what is yours, or the >government subsidizing certain things, such as business/enterprise?

Don’t know why it’s ‘yours’ — it’s a subsidy, clear and simple. Our society subsidizes people in their activity of making money, assuming they do their money-making in certain ways. (For example, the poor salaried slob who has to pay a higher rent so he can live near the bus line he needs to get to work because he can’t afford a car is NOT subsidized, not for his rent and not for his busfare. But if his boss flies to the moon to close a deal in order to add to his coffers, the flight is subsidized.) I think your tax prof was on the mark — but obviously didn’t manage to do her teaching job too stellarly.

Response:

> >The difference I have seen has between people who spend their own money >and people who spend other peoples money. The general concencous among >people who spend their own money (ie when money on travel decreases >profit and hence reduces the hefty multiple one gains), with few >execptions, FC travel is not worth it. Better to take the money and spend >it on a decent hotel where one spends much more time. > And let’s not forget people who allegedly pay their own way — but > deduct it as a business expense, meaning the other taxpayers are paying > for over 1/3 of their ticket.

And it is OK for them to subsidize a coach ticket? Right, and that 1/3 goes where? I might be mistaken here, but the 1/3 then goes into the US economy. This is far more valuable than spending it on government waste. High taxes (> 1/3, of course), are not good news for the economy. Michael Michael

Response:

> Don’t know why it’s ‘yours’ — it’s a subsidy, clear and simple. Our > society subsidizes people in their activity of making money, assuming > they do their money-making in certain ways. (For example, the poor > salaried slob who has to pay a higher rent so he can live near the bus > line he needs to get to work because he can’t afford a car is NOT > subsidized, not for his rent and not for his busfare.

I don’t know any city in the US where the fares covers the cost of the transit system. I have seen rates in some places of 15 percent. That would be an 85 percent portion paid by taxes. >But if his boss > flies to the moon to close a deal in order to add to his coffers, the > flight is subsidized.) I think your tax prof was on the mark — but > obviously didn’t manage to do her teaching job too stellarly.

If he flies to the moon, the trip is deductible. You would assume this enables the company to make more profit, giving more money to the government.  And how are higher income people being "subsidized", if their tax rate is higher? Michael

Response:

>> >The difference I have seen has between people who spend their own money > >and people who spend other peoples money. The general concencous among > >people who spend their own money (ie when money on travel decreases > >profit and hence reduces the hefty multiple one gains), with few > >execptions, FC travel is not worth it. Better to take the money and spend > >it on a decent hotel where one spends much more time. > And let’s not forget people who allegedly pay their own way — but > deduct it as a business expense, meaning the other taxpayers are paying > for over 1/3 of their ticket. >And it is OK for them to subsidize a coach ticket?

I wasn’t speaking about different classes — just pointing out that ‘those who pay for their own ticket’ are often getting some help… >Right, and that 1/3 goes where? I might be mistaken here, but the 1/3 >then goes into the US economy. This is far more valuable than spending >it on government waste.

Gee, I like that line about the money going into the US economy [note Kate Smith singing God Bless America in the background] — I’ll be sure to use it next time I’m with some right-winger mouthing off about welfare recipients. Merci. >High taxes (> 1/3, of course), are not good news >for the economy.

Depends of course on where you are in the society and which ‘economy’ is relevant to you…

Response:

- Hide quoted text — Show quoted text ->> And let’s not forget people who allegedly pay their own way — but >> deduct it as a business expense, meaning the other taxpayers are paying >> for over 1/3 of their ticket. >And it is OK for them to subsidize a coach ticket? > I wasn’t speaking about different classes — just pointing out that > ‘those who pay for their own ticket’ are often getting some help… >Right, and that 1/3 goes where? I might be mistaken here, but the 1/3 >then goes into the US economy. This is far more valuable than spending >it on government waste. > Gee, I like that line about the money going into the US economy [note > Kate Smith singing God Bless America in the background] — I’ll be > sure to use it next time I’m with some right-winger mouthing off about > welfare recipients. Merci.

I meant the 1/3 saved by the deduction can be used to purchase real goods, rather than government waste. Michael

Response:

> >normally be the case."  In other words, it’s a variation of the chicken-egg >thing.  Is a deduction which decreases taxes keeping what is yours, or the >government subsidizing certain things, such as business/enterprise? > Don’t know why it’s ‘yours’ — it’s a subsidy, clear and simple. Our > society subsidizes people in their activity of making money, assuming > they do their money-making in certain ways. (For example, the poor > salaried slob

in a job provided by whom?  Unless there is some incentive for a person or group of people to take a risk and go off on their own, starting or expanding a business, it wouldn’t be done.  Reminds me of the old Polish expression about their economy "they pretend to pay us and we pretend to work."  who has to pay a higher rent so he can live near the bus > line he needs to get to work because he can’t afford a car is NOT > subsidized, not for his rent and not for his busfare. But if his boss > flies to the moon to close a deal in order to add to his coffers, the > flight is subsidized.)

Not necessarily.  At least in our tax code, there are two important limitations on any deductibility, in addition to the myriad couple thousand pages of specific rules.  First, an expense must be "reasonable" (and the onus is on the taxpayer to prove this), so a trip to the moon to collect rock samples with a view to making paperweights would not be "reasonable."  Second, all business losses (ie…"deductible" expenses exceeding revenue) must have a "reasonable expectation of profit."  Profit = taxes. Profits are "mine" because I earned them.  They are the product of my labour and risk (unless you buy into surplus value theory which hasn’t seemed to have worked anywhere in the world).  Her Majesty has decided, in her wisdom, to have her hand out for a part of that; I am entitled to "arrange my affairs to minimize tax" through legitimate means, and that includes deducting reasonable expenses incurred for the purpose of gaining or producing income.  Avoidance or evasion are other matters and…not recommended. Unlike the majority of tax whingers, I do *not* take great umbrage at paying a certain amount of taxes…the road I drive over to get to work, the hospital which provides a (tattered) safety net in our still-envied medicare system, a system of at least generally objective law enforcement and administration, etc. etc. all have a legitimate call upon a reasonable portion of my taxes.  What is reasonable?  Well, that’s a good question.  But 52% is not.  And so long as I have chosen to take the risk of creating my own job (and, sometimes, jobs for others), I am entitled both by law and by morality set off reasonable expenses for the purpose of gaining or producing income against my revenue.  Would you advocate a tax on gross revenue with no deductions?  I think your tax prof was on the mark — but > obviously didn’t manage to do her teaching job too stellarly.

No need to get nasty.  Teaching the tax code is one thing.  The debates on the philosophy of taxation is quite another and, so far as I recall, wasn’t in the curriculum.  Like so many scores of other threads in this and sundry other newsgroups, this is a matter upon which theoretically intelligent people can, and should, differ.  One of the nice things about a generally free society.   Let’s hope it stays that way.

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- Hide quoted text — Show quoted text -> And let’s not forget people who allegedly pay their own way — but > deduct it as a business expense, meaning the other taxpayers are paying > for over 1/3 of their ticket. >I wish.  50% here.  But it raises the debate I used to have with my Tax prof, >who once worked for Revenue Canada.  Her argument that a deduction or >deferral >was a rebate/concession/tax break from the government.  My response was, "no, >it’s keeping some or all of what is *yours* or transferring it later than >would >normally be the case."  In other words, it’s a variation of the chicken-egg >thing.  Is a deduction which decreases taxes keeping what is yours, or the >government subsidizing certain things, such as business/enterprise?

There is a difference between business expenses, deductions, and tax subsidies. A business expense is a cost incurred to conduct the business – this would be things like the purchase of inventory, the payment of employee salaries, and the purchase of airline tickets. A deduction (or exemption) is an allowable set aside of certain revenues, exempting them from taxation – common to the US system is the personal exemption in terms of Federal income tax for individuals – business have similar exemptions. A tax credit or subsidy is an amount credited directly against the tax liability of the firm, or an amount paid (or rebated) to the firm for doing certain things.  Credits can be earned, for example, by undertaking certain research activities, subsidies for planting (or not planting) certain crops.   Hence, the taxpayer does not subsidies the purchase of J class tickets.  The business incurs an expense which is deducted from revenues prior to the determination of net profit before taxes. amp

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                      Craig says:                         >it’s not poor business practive if                       >you get enough work. But it makes sense that the gravy train won’t run forever! Even though I go to Moscow for vacation to see friends, one of the questions that I get when I visit friends at the  radio station is "where are you staying?" and "was your ticket expensive?" I definitely would be getting some strange looks if I said I was staying in the Palace or Metropol and said that I flew FC all the way.   Maryanne.  

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to appear as if it was written: >                      Craig says:   >                      >it’s not poor business practive if >                      >you get enough work. >But it makes sense that the gravy train won’t run forever!

Huh? >Even though I go to Moscow for vacation to see friends, one of the >questions that I get when I visit friends at the  radio station is >"where are you staying?" and "was your ticket expensive?" >I definitely would be getting some strange looks if I said I was staying >in the Palace or Metropol and said that I flew FC all the way.  

On the other hand, do you think that the hottest property in radio (whoever that might be these days… Howard Stern?  Whoever) wouldn’t be able to dictate the conditions of travel? And if you happen to be self-employed, or the owner of the company, guess who decides on your travel policy?  And who decides about the quantity of gravy on the train? >Maryanne.  

Malc.

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