American Presidential Politics and foreign affairs Message Board

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Politics : American Presidential Politics and foreign affairs

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To: haqihana who wrote (9628)	6/24/2006 8:02:56 PM
From: Peter Dierks	Read Replies (1) of 71588

Business owners have many tax advantages available to them. One of those advantages is capital investment. A very successful business that is run for tax advantages will invest in itself in profitable years. By buying capital equipment and utilizing the Section 179 write off and the depreciation of equipment, as business can convert income into investment, thus deferring taxes. There is a certain logic to not taxing businesses. However if one did that, the system would be abused by businesses. Right now they are often run for the benefit of management to the detriment of stockholders. If you allowed them to accumulate profits indefinitely they might be tempted to keep the money with logic like, if we never pay it out it will never be taxed. Stock prices would rise to reflect the retained earnings for a time, then as people realized they could never get their money out, stock ratios would fall. The world might quickly evolve into a horrible place controlled by a few huge monopolistic and inbred corporations. The fears of leftwingers could become a horrible reality.

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