A tax deduction is still a loss. What if your boss told you that you were getting a fifty dollar a week reduction in pay to lower your tax liability? Just a true for a retailer.
“A tax deduction is still a loss. What if your boss told you that you were getting a fifty dollar a week reduction in pay to lower your tax liability? Just a true for a retailer.”
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Not correct.
Allowing companies to deduct “shrinkage” before tax lowers the loss by sum of the percentage of the tax rates (fed and state). In most states, that amounts to 40-ish%, shifting that amount of the loss to the general taxpaying public.
The current tax law provides a disincentive for companies to stop theft to that degree.
In your example of the individual, the employee would pay less taxes ($50 times the combined tax rates). Call that net $30 less to his paycheck after the tax effect. Take it out after taxes, and he loses the whole $50.
Store managers don’t override corporate bean counters.