Fast food joint pays workers $12 an hour, and lives to tell the tale

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49. expense is a loss

Last edited Thu Aug 15, 2013, 02:49 PM - Edit history (1)

It's not so sketchy an understanding. An expense is treated as a loss for tax purposes insofar as the expense/loss is a deduction and lowers the purported taxable income of the company and therefore lowers amount of tax a company must pay, which could lead to more money in owner's pocket than if his expenses were not treated as losses and therefore not tax deductible. So the argument is cogent even if terms may not correspond to proper accounting terms. The point of the earlier message is well taken. Further, a corporation that that views wages as an expense and therefore a loss is missing the point and has little reason to complain on this point. Because wages paid and benefits paid for is an expense, it is given a tax deduction which results in more money in pocket of owner who has had revenues adjusted against expense for a lower taxable amount. The benefit of lower taxable amount goes to corporation owners, whose company now pays fewer taxes and has more money to distribute to owners. Individual wage earners do not get the benefit of deducting their expenses from their gross revenues. So let's stop the whining and hand-wringing. It is my understanding that truly small businesses will get even more favorable tax treatment for providing health insurance to their employees.