And, more specifically, why are corporations and people taxed differently? Both have money coming in and going out for necessities
Does that make sense?
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Income is just that, any incoming flow of money. Profit is that income minus your costs, or expenses that were needed to generate the income.
Corporations are taxed differently because they provide a service, they employ people.
Consider this… The US government suddenly decides to tax Amazon at the same rate they would tax a normal person. Amazon then begins thinking of places they could move their headquarters to, or production facilities, warehouses… Etc that would give them the tax benefits they want in exchange for them bringing jobs and massive boosts to the economy to that country. They’d move and everyone in the US who worked for them are now unemployed and not contributing to the economy.
There are other reasons as well. Let’s take a big pharmaceutical company for an example. They create medicines that keep people alive, or at least, maintain them as long as possible. If all of a sudden they were threatened by massive tax hikes, or say, price fixing so they can’t choose their own prices anymore, what do you think they’d do? They’d threaten to cut off the supply or leave the country altogether for “friendlier waters”.
One last reason is that companies and corporations can write off so many expenses, charitable donations… Etc to counter their taxable values to the point where they almost seem to equal put and suddenly they owe nothing.
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