Re:California wants to tax companies for executive pay ratio
by thaumasiotes on Saturday January 18, 2020 @09:04AM
(#22084481)
> Setting aside the oddity of talking about profit of people, given constant income, you pay less consumption tax as your profit goes up.
> Consumption is expenses, profit = income - expenses.
No, a person's profits are their consumption. Savings are not profits -- they don't benefit you at all.
There's a chain going like this:
Company spends money so that company receives (more) money so that person receives money so that person can spend money.
The goal of the company is to accumulate money for someone else and that's how its profits are measured. Profit is money the company loses by paying it out to its owners. (Money the company loses by paying it out to non-owners is "expenses".)
The goal of the person is to spend money on things it can actually use; for the person, money is an accounting tool, not an end goal. But we can identify profit the same way. Money that you lose by paying it out to yourself ("consumption") is your profit; savings is just money you might one day allocate to profit.
> Consumption is expenses, profit = income - expenses.
No, a person's profits are their consumption. Savings are not profits -- they don't benefit you at all.
There's a chain going like this:
Company spends money so that company receives (more) money so that person receives money so that person can spend money.
The goal of the company is to accumulate money for someone else and that's how its profits are measured. Profit is money the company loses by paying it out to its owners. (Money the company loses by paying it out to non-owners is "expenses".)
The goal of the person is to spend money on things it can actually use; for the person, money is an accounting tool, not an end goal. But we can identify profit the same way. Money that you lose by paying it out to yourself ("consumption") is your profit; savings is just money you might one day allocate to profit.