LOL Amazing spin you have there, jsuati. Ok, there are five major categories of financial transactions: revenue, expense (cost), assets, liabilities, owners equity.I believe currently due income taxes would be a liability and, actually, if a business has paid more taxes than it owes at the end of the year, it would be listed as an asset.
What category would you place taxes in? Assets?
"Go look at any annual report and see if income taxes are listed under expenses."
Ok, I did just that. All three annual reports that I checked showed income taxes as a line item on the INCOME STATEMENT and were subtracted from revenues to arrive at Net Income.
Have you ever heard of EBIT (Earnings Before Income Taxes)? Any idea what the difference is between EBIT and Net Income?
Geez. I can't believe we are actually debating whether or not income taxes are an expense. This may be even dumber than the time we debated whether costs have any effect on prices. Actually, we have debated that obvious point several times on FR threads.