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Comment by pathseeker | Hacker News Reader

>Correct me if I'm wrong, but I think payroll expenses are not a part of profit, so no double taxation here.

The point is that any money that exits a corporation gets taxed again somewhere.

So if a company does really well one year and makes a profit, it gets taxed on that profit even if it keeps it in the bank. Then they use that remaining profit to pay payroll next year and then employees or owners get taxed again.

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I don't think that's quite how that works.

But your point on double-taxation is certainly valid in some contexts.

It is exactly how it works. Apple has been taxed on the profits that make up their giant cash balance. Once that is paid out to investors through dividends or to employees through payrolls, it will get taxed again.

You're right about dividends, but payroll comes out before profit calculations.

Some jurisdictions (Australia) have input credits that offset tax already paid on dividends. If a company has paid 30% tax on a profit and distributes dividends to shareholders, the individual pays tax on it at their marginal tax rate less the tax already paid by the company (fully franked dividend).

Franking credits minimise the double taxation issue in these instances.

Will never happen in the US: too reasonable.

Sales tax is a double-tax. So what?

Double taxation is unethical.

Double taxation is generally a bad idea. What you think is double taxation is not.

Double taxation is the concept where a dollar could, in theory, be taxed at over 100% from the aggregation of taxes owed on it. There are to my knowledge only two real examples of double taxation in America. The first happens due to the new cap on SALT deductions. The second is with regards to FICA taxes.

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