Why doesn’t a business pay social security taxes, why can’t individuals deduct vehicles expenses, etc? We’re both persons under irs definition. Please explain.
Why doesn’t a business pay social security taxes, why can’t individuals deduct vehicles expenses, etc? We’re both persons under irs definition. Please explain.
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Because corporations aren’t actually considered people, they’re considered to have personable rights in specific situations. The context and nuance doesn’t make for nice, quippy statements so we wind up with “corporations are people”
The tax code is overly influenced by wealthy business owners so they get the breaks. But regular people, to an extent, can take advantage of the same things. Some people have small businesses and deck their cars out in their logo/brand and are able to write off their car.
Because rich people run the country and make the rules and rich people care far more about the corporations they’re getting rich off of than they do the wellbeing of their fellow countrymen.
Why cut into their obscene profits when they can just bleed the middle and lower classes dry?
Corporations donate to politicians and basically make the laws and regulations that govern their businesses. And they have a cozy relationship with politicians- Nancy Pelosi’s stock investing outperforms that best hedge funds by a factor of like 10.
Because one has a lot more money for influence
The “business is a person” is way overgeneralized.
No legal decision gives a business all the rights of a person.
A business can’t vote, and isn’t protected by the 5th Amendment rights against self incrimination. Businesses aren’t protected by rent control.
If you want to go by very specific definitions, like “IRS definition”, then continue with that same rule for yourself.
The IRS uses the definition of “person” given under 26 U.S. Code § 7701 (a), which specifically says the definition is “When used in this title”.
You can look up why other taxes are or aren’t paid in that same title – Title 26 of the US Code.
Some people don’t pay Social Security taxes. If that’s an issue for you, then consider joining the Amish community.
Corporate personhood is a concept in certain Supreme Court rulings that corporations are entitled to protections under the constitution such as free speech and due process – it has nothing to do with taxes. The IRS doesn’t treat corporations the same as individuals, there are several entity types that are all governed by different rules.
And businesses do pay social security taxes, they have to match their employees contributions.
This isn’t to say that the current corporate tax laws are good, it’s just not this particular thing that makes them bad.
One can afford accountants to muddle the works the other can’t. A business gets incentives to move to a town, like tax breaks for 10 years, because they are, in theory, bring prosperity but their trucks tearing up the roads is on the taxpayer not the business.
Corporations do pay Social Security. They also pay taxes on income.
It goes both ways. Business are subject to taxes people are not. And people get deductions and credits that businesses can’t.
We are not both persons under IRS definition.
The rich need to get richer.
Would you expect Disney to be able to retire? How would Disney get medicare?
Great points, OP. Illustrates the phoniness of the concept well.
Who says corporations don’t pay taxes to social security administration?
Who says an individual W2 taxpayer is not able to write off their annual vehicle mileage?
Who says the IRS definition of a corporation is same as an individual taxpayer?
Because those are all incorrect.
What I don’t seem to understand is WHERE you’ve been getting your information.
You should really, really, really reconsider getting ANY MORE info from that source(s).
My goodness. 🫣
They are not both people under irs laws. They are both people under campaign finance court rulings
You know businesses pay half of Medicare and Social Security taxes, right? A self-employed person pays twice as much!
Corporate personhood is what’s called a legal fiction. It’s something we know isn’t literally true, but we treat as true under certain circumstances. But it quickly becomes absurd to extend this fiction too far. So we don’t universally apply all laws equally to a corporation just because we apply them to a human.
Further, if you own a business that’s a sole proprietorship your taxes go up if you make it a corporation because both you and the corporation owes taxes. So corporations aren’t advantageous from a tax point of view. Ultimately taxing corporations doesn’t burden the corporations, and the burden falls on some combination of the employees (in the form of decreased wages), the consumers (in the form of increased prices), and the owners (in the form of decreased profits).
Accountant here, so I won’t attempt the law explaination as I feel like others have covered it and I’m not a law professional. 🙃Corporations are taxed at a flat rate (21 %) on Earnings Before Taxes or Operating Earnings (Operating Revenues – Operating Expenses, yes this means Corporations get payroll expense, office expense etc deducted from their revenue so they are not federally taxed) but the actual taxable amount is still further deducted by tax adjustments like depreciation methods, carryovers, credits, or non-deductible expenses vs individuals are taxed at a progressive rate. For example if you make 50k, you deduct standard deduction or itemized deductions from the 50k, find your tax bracket( married filing jointly, single etc) then you are taxed up to the maximum amount of that portion of income:
Individuals do not get many tax deductions. In 2017, Trumps first tax plan Tax Cuts and Jobs Act, individuals lost the Personal Exemption Deduction. The Cap on SALT hurt Middle Class Americans since large property or income taxes now had those deductions capped.