And, more specifically, why are corporations and people taxed differently? Both have money coming in and going out for necessities
Does that make sense?
In: 0
In this case, Income might be used like “Revenue”. Revenue is all the money a company received, that’s it. Profit is how much is left of the revenue after you remove things like taxes, loan payments and expenses like salaries, rent, and materials purchased.
In the case of a business, the tax codes are written in such a way as to allow them to deduct expenses before they have to pay taxes. In a similar way a person is usually to deduct things like mortgage interest, real estate taxes, and investment losses before they pay income tax.
In both cases, the taxes bill isn’t applied on every single dollar earned; it’s applied after certain allowed deductions are made.
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