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Corporations are not people. Businesses are not people. Corporations are not always businesses. Businesses are not always corporations. Businesses and corporations may or may not be created with the motive of making profit. They are like a mixing bowl. Things are put into them and changed to something else which is taken out. Corporations and businesses can do no wrong. People can do wrong.

Profits do not belong to corporations or businesses. Profits belong to the owners. Profits can be taken from the business by the owners. Profits can, or sometimes must, be retained in the business, or business corporation, for business growth. Or they must be retained because inflation has increased the dollar cost of their business assets. It is a great wrong that inflation creates taxable income of a business.

It is understandable that ordinary people fail to realize that the taxation of business income is counter productive to society. It increases the cost of the goods and services produced by the business. If the money is paid for taxes, it is just another amount that has to be recovered from the selling price of the goods and services produced. If there are profits not required to be retained for business use, they will be paid to owners. They will be subjected to tax at that level, either with an income tax or a standard of living tax.

There should be a tax on the wealth or redundant assets of corporations or businesses. Tax should apply to “failure to produce” rather than“production”. The tax on business decreases the ability to compete with goods and services on which no such tax is levied. The tax is particularly detrimental to small businesses whose sources for financing is restricted.

If the taxation base is Standard of Living (consumption) then a business should not be taxed because it is not living or consuming. Its owners, (proprietors, partners or shareholders) are living and consuming and should pay tax on their standard of living. There is already provision that money laid out by a business that is not necessary to earn income, but of personal benefit to a person, is included in the taxable amount of that person.

Especially for small business, the real driver of economic growth, the taxation of the income, as calculated by income taxation rules, is without any justification. Money spent on purchases and labour is not considered a business expense if has not been sold. This puts the business in the position of paying tax on revenue not yet received. The business owner is placed in the position of paying tax on money that he is not able to consume.