Whatever value might be added is encompassed by the example and the fact you can't/won't see that changes nothing. In asddition, the fact that you are not a Sub C corp changes nothing. You business still accrues tax liaibilities even though they may be paid via your 1040. The effect of those taxes still remains in the business and pretending it does not is (at the very least) shortsighted.
"Embedded net profits" BTW is a meaningless concept since these are different businesses in the example. The profits are not cascaded and accumulated (remember Nightie already tried that one), but the taxes are as part of the costs passed ahead in prices. The example shows costs that can be removed from prices - and the assumption is that profits remain. If you'd like to "embed" profits and remove them also ... well ...???
As for the C-corp figures you present, I can only offer a big yawn and say "so what". If those are correct figures (and I doubt they are), there are many tax-abatement stunts that can be used (frequently short term ones) but over a longer term the taxes would most likely go back up.
According the The Institute for Taxation and Economic Policy for 2004:
"ITEP's new report examines the U.S. profits and federal income taxes of 250 of the nation's largest and most profitable corporations over the 1996-98 period. Although big corporations ostensibly are supposed to pay 35 percent of their profits in taxes, the 250 companies in ITEP's survey paid only 20.1 percent in 1998. "
Perhaps you were able to cherry pick only those corporations (and keep in mind that many other business entities pay taxes, too) who paid very low taxes it contributes nothing to your argument except, perhaps to show your desperation by the tactic.
Actually, longer term sutudies by the IRS (I believe it was) show the "typical" (whatever that means) tax rate for C-corps is about 25% and has held right around that rate for many years with occasional slight variations.
Dear pigdog,
"Nonsense, s-test."
LOL. Because you say it? * chuckle *
"It's unfortunate you can't understand a simple example of cascading of embedded taxes which do not even include paroll taxes or commpliance costs."
I understand your example just fine. Better than you do. It comprises profits and taxes only. So, wonder of wonders, it has all "embedded" profits and taxes!! LOL.
Your example is the classic example of "GIGO," garbage in, garbage out.
Make a spreadsheet with real world, realistic profit margins, value added, and effective tax rates, and you'll see "embedded" tax costs of a couple of percent. If I have time to waste later, I'll do it for you.
However, we actually KNOW the embedded cost of corporate income taxes in the US. It varies from year to year. In recent years, it's been as high as nearly 2%, and as low as 1.3%. It's the percentage of GDP that's paid in corporate income taxes.
"Whatever value might be added is encompassed by the example and the fact you can't/won't see that changes nothing. In asddition, the fact that you are not a Sub C corp changes nothing. You business still accrues tax liaibilities even though they may be paid via your 1040. The effect of those taxes still remains in the business and pretending it does not is (at the very least) shortsighted."
I think you mean Chapter C corporation.
In any event, why don't you ask groanup's opinion of that? He seems to think that if you're not paying corporate income taxes, well, you're not paying corporate income taxes.
Why don't you explain for everyone here your theory of why all other workers should get back all their personal income and payroll taxes, but small business owners using Subchapter S corporations, LLCs, partnerships, and proprietorships, should not get back their personal income and payroll taxes?
"The effect of those taxes still remains in the business and pretending it does not is (at the very least) shortsighted."
You assert, assert, assert, in the face of all evidence and reason arrayed against you. LOL.
"As for the C-corp figures you present, I can only offer a big yawn and say 'so what'. If those are correct figures (and I doubt they are),..."
Look 'em up yourself.
"...there are many tax-abatement stunts that can be used (frequently short term ones) but over a longer term the taxes would most likely go back up."
Nope. These businesses just don't pay a lot of taxes. That's all.
" According the The Institute for Taxation and Economic Policy for 2004:
'ITEP's new report examines the U.S. profits and federal income taxes of 250 of the nation's largest and most profitable corporations over the 1996-98 period. Although big corporations ostensibly are supposed to pay 35 percent of their profits in taxes, the 250 companies in ITEP's survey paid only 20.1 percent in 1998. '"
I don't disagree with that.
You are confused, pigdog. You have confused "to pay 35 percent of their PROFITS in taxes," with "percentage of their REVENUES in taxes."
Wal-Mart paid nearly 30% of its profits in federal corporate income taxes. Nearly THIRTY PERCENT.
But, its profits were only 5.6% of its revenues.
For every $100 of sales Wal-Mart makes, they make a pre-tax profit of about $5.60. THAT'S their profit. That's all. And of that $5.60, they pay about $1.60 or so in federal corporate income taxes.
So, if you get rid of the corporate income tax, the price of $100 of Wal-Mart stuff could conceivably fall to $98.40.
Read what I've written very carefully, pigdog. You are confusing REVENUES with PROFITS.
It doesn't matter if the tax rate on profits is ONE HUNDRED PERCENT (the absurd case). If profits are only a very small part of revenues, then taxes will only be a very small part of revenues.
sitetest