[3pt14159]

Taxing profit is silly because you care about the "pointer management" that companies do, which requires things like costing QA done in another country. It is far easier to just tax property, sales, dividends, personal income, and capital gains than it is profit. Roughly in that order too.

[thomaskcr]

To be fair -- taxing profit does encourage companies to spend their money.

Also, taxable personal income and capital gains are taxes on profit -- I don't understand how that's easier. Any money spent on personal needs is taxable (see "The Situation" who tried to say tanning was a company expense) regardless of whether a person or company spends it. You're also able to write off business expenses whether you're a company or a person just the same too. Income tax is really a tax on profit, not total income. It just happens that people tend to have mostly profit (since they save their money or spend it on personal needs) and for most close to 100% of their income is taxable so they assume big bad corporations are getting some advantage they aren't entitled to which isn't really true at all.

[_delirium]

> Income tax is really a tax on profit, not total income.

If you run a business, that's largely true, as your sole-proprietor income tax is calculated very similarly to how business profits is calculated. But individuals who earn their income via employment (which is most of them) more often pay a tax on their income rather than profits. Some expenses are deductible, but many of the most common ones are not. For example, commute expenses are typically not deductible [1], even though they are probably the most frequent cost incurred solely as part of earning income. Work clothes are also often not deductible: they are only deductible if they are both formally required by the company, and of a kind that is dissimilar from non-work clothing. So e.g. buying a suit for interviews and/or meetings is not deductible, even if you only bought it for and only wear it for income-earning purposes (I have personally never worn my suit in a non-work context). It's also difficult to deduct the cost of a computer, even if your field is computing and you use it mainly for work and skills development (though it's possible in some cases, if the employer formally requires you to have one at home and doesn't provide it).

[1] "You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work)." http://www.irs.gov/publications/p17/ch28.html

[3pt14159]

I'm generally not a fan of income tax, since I think it creates a bunch of problems and economic inefficiencies, like the middle class cleaning their own houses while there is a sizeable unemployed section of the economy, but the huge difference between corporate profit and personal income is that a person has citizenship (generally), has to live somewhere, cannot expense the majority of his or her purchases, and cannot be financially controlled by a foreign entity with differing laws.

Yes it does create problems like "is driving to work a work expense?" but those problems are generally solved.