Somethings that always baffles me if why we have different tax accounting and financial accounting. You gonna tell your shareholder you are making tons of cash, but tell the government you are making none.
Why not just tax the IFRS17 profit?
PS not from US
You might be making lots of money but not able to distribute that money. So investors are excited that you probably will be able to distribute it eventually, but the government is effectively making you hold onto it (thinking specifically of not discounting loss reserves…)
I think one main difference between the different accounting systems is how (future) assets and (future) liabilities are evaluated . . . or even considered.
I agree that a unified system would make a lot more sense–especially from an investor-transparency perspective. But I think it’d have to take these other needs (and I think in many cases, that need is relevant when taxation is concerned) into consideration.
For example, valuation of expected future income shouldn’t be taxed until it’s realized; but it’s useful to a company’s shareholders to know what its financial strength is expected to be next {quarter | year} and whether or not that expected strength is realized (can I trust their accountants?).
lol
My view on the purpose of a unified system is less incentive to “game” the numbers, which promote more fair valuations on profit and loss for tax.
BTW, expected future income are consider as asset (contract service margin) in IFRS 17, so it wouldn’t be taxed in as P&L.
Some jurisdictions actually allows calculating P&L of financial instrument under fair value basis as in IFRS 9, which I think is more fair compare to the realization basis. And fixed the capital gain problem.
I know 17 is not inforce yet, but it is easy to use it for discussion since it is the same internationally.
In the US, the FASB went their own way and as a result, 17 does not apply here.
This makes businesses want to hire less people and drives up the cost of products and could make us less competitive internationally. If instead it is assessed on the sale of those products in the US, then the people who are benefitting from being 'Muricans can pay the tax. Again, it does make me want to buy my car in Canada and drive it down here, so there must be a way to avoid that loophole. Unless the surcharge to businesses wouldn’t be as high as it would be as a tax on individual consumption.
Import taxes, again passed on the to the consumer.
Are you talking about a VAT, where the car would hypothetically be cheaper in Canada?
If so, a car is a bad example in that you’re still going to have to register it in the US state that you live in. They’re already pretty good about ensuring that you paid the appropriate sales tax, when you register.
I bought a car in Oregon (where I lived at the time, and which has no sales tax) and then 10 years later moved to another state that does have a sales tax. They asked a lot of questions about exactly when I purchased the car and did I really live in Oregon. Apparently a lot of people try to claim Oregon residency when buying cars (and presumably Delaware and Alaska too) to avoid the sales tax and it took more than I anticipated to satisfy them that I really was an Oregon resident when I bought the car and I shouldn’t be required to pay sales tax to the new state… just the registration fee. I suspect if I’d bought the car in Washington (which has a very high sales tax) there would have been a lot fewer questions.
But yeah, there’s only so much that you can do to enforce any kind of sales tax. In the before times I’d go shopping when I visited my friends in Oregon and um… might have forgotten to declare the taxes on the goods I bought when I returned home. You can’t totally avoid that, but it’s fairly inconvenient. I mean, yeah I avoided taxes on a pair of shoes and a couple of shirts but I’m still paying it on the vast majority of (taxable) stuff I buy.
Since cars have to be registered, and that takes a title, taxing that is straightforward. But, cars are kind of unique in that respect. I could drive from Detroit to Windsor, buy a laptop and bring it home. If I’m worried about border inspections (rare), I can leave the box in Windsor.
Then, there are the yachts. They can be purchased, registered, and docked in a foreign country. And, jewelry and expensive clothes are easy to bring home on your private plane.
But, of course, the big revenue loss with a VAT is people with so much income that much of it doesn’t get spent on the consumer goods that are subject to VAT.
Let’s be really truthful about war. If the winners want their gains it pays to be ruthless post war. Many of the US problems today stem from the fact that the Union tried to be as gentle as possible with the Confederacy.
That is an interesting story. Care to expound?
They capitulated too much on rights for slaves and let the south continue on in their racist ways which eventually took 100 more years to work out legally and we still have not made right mentally.
Isn’t it generally accepted that being too harsh on Germany after WW1 contributed to WW2 happening? Perhaps a balance needs to be struck.
Yeah, that was after 1876.
Are you talking about prior to the Civil War or after?
Lots of missing words in Nick’s posts. In this case, I think there is supposed to be a “former” before “slaves.”