Why are business expenses deductible from income, but someone’s basic living expenses aren’t deductible from personal income?
In: Economics
What people seem to be beating around the bush is that the government has given corporations favorable treatment. This isn’t some conspiracy or even necessarily a bad thing. Business deductions encourage businesses to spend money now rather than save the money for later (or not spend at all).
This same incentive doesn’t really exist for most individuals. Tax deductions are about encouraging a specific activity. For businesses, it’s to encourage spending. And in actuality, there are many tax incentives for individuals—FSA accounts, medical premiums paid by your employer, retirement contributions, child care expenses, student loan interest etc.
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